The Department for Work and Pensions (DWP) has rejected calls to give people diagnosed with a terminal illness early access to their State Pension. Pensions Minister Laura Trott MP said access to the contributory social benefit “would not be appropriate”, but highlighted how people with a terminal diagnosis are given fast-tracked access to other benefits.
Her comments came after hearing strong arguments in favour of the move, led by SNP MP Dave Doogan, who has previously pressed the UK Government to allow people with less than one year to live, early access to their State Pension. People who reach the current retirement age of 66, who have made at least 10 years’ worth of National Insurance contributions are entitled to State Pension payments - to receive the full award, a person needs around 35 years.
Mr Doogan argued that the purpose of the State Pension is to “support all of us towards the end of life” but pointed out that people with a terminal illness are not entitled to draw on their State Pension, “regardless of their contributions, financial difficulties or personal or family situation”.
He added that more than a quarter of people who die before retirement age spend their final days in poverty. He said: “In my Angus constituency, that figure is 24%. It is awful to think that for so many people with terminal illness, their last days are filled with worry and fears that go beyond the illness with which they have been diagnosed.”
Marie Curie reports that many terminally ill people feel stress about keeping a roof over their head, paying for their children’s school uniform or the energy use of their specialist medical equipment.
Mr Doogan also highlighted that people with terminal illnesses have often “paid enormous amounts of National Insurance”.
He said: “On average, people aged 20 to 64 who are in their last year of life have accrued 24 years of National Insurance contributions, and will never see the benefit of that investment, yet the path to improving the situation is straightforward and affordable.
“France, Germany, Italy and Spain all provide for early access to the State Pension in the event of disability, and for those found to have a terminal illness.”
He also shared research conducted by Loughborough University, which found that giving working-age terminally ill people access to their State Pension could almost halve the rate of poverty in that cohort, lifting more than 8,600 people a year out of poverty at the end of their life.
He explained: “That change would be not only effective but extremely affordable. It is estimated to cost £144 million per year - just 0.1% of the annual State Pension bill - and would make an immeasurable improvement to the dignity and life of some of the most vulnerable people in our communities, and their families. It is also fair.
“People pay into a State Pension their whole life to ensure a comfortable end of life, but when they reach end of life, the UK Government tells them that they will keep the money. How can that be? To put it another way, the UK Government are saving £144 million per year by withholding access to state pensions from terminally ill people. That is unconscionable.”
The Angus MP also said that members from across the House have asked the UK Government to consider permitting terminally ill people to access their State Pension, regardless of age. Support for the proposal during the debate came from Margaret Ferrier MP (Independent), Drew Hendry MP (SNP) and Matt Rodda MP (Labour).
Ms Ferrier said that terminal illness puts an “emotional, mental and financial strain” on the individual and their family. Highlighting that more than four in five families living with advanced cancer face income losses as a result of their diagnosis.
Drew Hendry added that “nobody is asking for things that people have not earned”. He said: “These pensions are something that people have earned throughout their lives.
“The Government can look at it this way: when someone gets that devastating note that says they are terminally ill, the Government knows they will save money from the fact that that person is not going to be around for years collecting their state pension. Therefore, the Government can at least make this gesture towards making people’s lives easier.”
Responding to the arguments, DWP Minister Laura Trott MP explained that the State Pension is a contributory social benefit, financed through the National Insurance contributions. She said: “The National Insurance system operates on a pay-as-you-go basis, meaning that today’s contributors are paying for today’s social security entitlements and pensions, while those who paid contributions in the past were paying for the pensions of that time.
“In other words, the contributors to the National Insurance system do not accumulate an individual pot of money that is personal to them.”
Ms Trott pointed out that National Insurance contributions don’t just pay for the State Pension, they also entitle people to benefits and support the NHS.
She explained: “It is a question not so much of a person paying for their own benefits, but of a general pooling of resources to meet current benefit claims for all those covered by the National Insurance system.”
The Minister added: “Therefore, early access to a State Pension would not be appropriate in the case of terminally ill people, but there are a variety of other benefits available to them.
“For those nearing the end of their life, significant support is already available through the welfare system. Hearing that an illness cannot be cured must be a frightening and devastating experience.
“Our priority within the DWP is providing people with financial support quickly and compassionately. The main way we do that is through the special benefit rules, which have been mentioned today and which are sometimes referred to as the special rules.
"They give people nearing the end of their life faster and easier access to certain benefits, without their needing to attend a medical assessment or serve waiting periods. In most cases, people will receive the highest rate of benefit.”
You can watch the full debate on Parliament TV here.
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