Pensions (Special Rules for End of Life) Bill

Philip Davies Excerpts

2nd reading
Friday 2nd February 2024 Commons Chamber

[Philip Davies (Shipley) (Con)]

It is a pleasure to follow my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon), who gave an excellent speech about why this Bill is so important and will make a material difference to many people. To that end, I thank my hon. Friend the Member for Tewkesbury (Mr Robertson) for bringing forward the Bill, because this is a very important issue for a number of people and the Bill sets out some important principles. I want to come on to the important point made by my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) about when the Bill will come into operation, because it deserves more explanation from the Government.

For a person to find out that their illness cannot be cured must be a terrifying experience not just for the sick individual themselves, but for their friends, family and loved ones. As a Parliament, we should be committed to alleviating the pressures facing those nearing the end of their lives. Since the 1990s, the Department for Work and Pensions has provided access to key benefits through what are referred to as the special rules for end of life. These are benefit rules that allow people who are nearing the end of their lives to get fast-track access to certain benefits.

The special rules were first introduced in attendance allowance in 1990, following a recommendation by the Social Security Advisory Committee. Attendance allowance claims are subject to a six-month waiting period, and the Committee was concerned that some terminally ill people were dying before that period had lapsed. Eligibility for the special rules was therefore limited to people diagnosed with a condition that meant they were unlikely to live for more than six months, as established in the Social Security Act 1990. Since then, the use of special rules has been extended to disability living allowance, employment and support allowance, personal independence payments and universal credit, all with the same eligibility criteria.

The current pension legislation contains provisions that allow a patient who is deemed terminally ill to claim under special rules and get the highest rate of financial help, and faster. Paragraph 25B(3) of schedule 7 to the Pensions Act 2004 and paragraph 12(3) of schedule 5 to the Pensions Act 2008 both define the eligibility criteria for a terminal illness lump sum, which allows the patient to apply to exchange all their ill health benefits for a one-off lump sum payment if they are diagnosed with a terminal illness and do not expect to live longer than 12 months. The then Work and Pensions Minister said that this would be

“using the same rules to define ‘terminally ill’ as those that are used in the financial assistance scheme and in DWP benefits.”—[Official Report, House of Lords, 14 July 2008; Vol. 703, c. 1060.]

Historically, people eligible under the special rules have not had to wait as long as others to start getting benefit payments, as no waiting period is applied. They are not required to go through medical assessments or face-to-face appointments, and in most cases they have qualified for higher rates of financial help. The form supporting a special rules claim is completed by a clinician and is called an SR1. To access the fast-track route, people have to have been assessed by their healthcare professional as having six months or less to live. This has become known as the six-month rule. My hon. Friend the Member for Tewkesbury made the point about it being a healthcare professional who makes the assessment.

The Pensions Act 2004 established the Pension Protection Fund, which provides compensation to members of eligible defined-benefit pension schemes in cases where the sponsoring employer becomes insolvent on or after 6 April 2005 and the scheme lacks sufficient assets to fulfil its pension liabilities up to the level of compensation offered by the Pension Protection Fund. The financial assistance scheme initially covered schemes that wound up between 1 January 1997 and 5 April 2005. Since its inception, it has undergone reviews and expansions in both coverage and the level of assistance provided. The scheme offers payments to members of qualifying schemes who are unable to fully secure their pension liabilities.

Currently, the Pension Protection Fund has the authority to issue a one-time lump sum payment to individuals who are terminally ill and have not yet received their protection fund compensation. Similarly, the financial assistance scheme allows for the early disbursement of financial assistance in cases of terminal illness.

Both the PPF legislation and the FAS regulations employ the same definition of terminal illness. It is currently defined in pensions legislation as if

“the person’s death in consequence of that disease can reasonably be expected within 6 months”.

That means that both the PPF and the FAS currently make payments when medical evidence shows that a member has a life expectancy of up to six months. This eligibility criterion was set in line with the social security special rules for end of life provisions for certain benefits, originally introduced in 1990. The eligibility rules were extended to 12 months by the Social Security (Special Rules for End of Life) Act 2022, which we all supported.

The Bill seeks simply to restore the original policy intent that there should be an alignment between the Pension Protection Fund and the financial assistance scheme. For more than 30 years, the special rules have ensured that at this most difficult time people have had the financial support to which they are entitled, and that they get it quickly and easily.

[Richard Fuller]

I am listening to my hon. Friend’s speech with great interest. He is providing a lot of detail, so I hope he will not mind my asking some specific questions. He will be aware that the Pension Protection Fund does not necessarily pay up 100% of what people would have got had their pension fund not become insolvent—and often, insolvency occurs through no action of the employees themselves, but is about how the directors of the companies made contributions. He will also be aware that shortfalls in the Pension Protection Fund are covered by a levy that is charged on other pension funds. I am almost certain that the effect of the changes—which, as my hon. Friend has rightly said, are supported generally throughout the House—will be significant, but has he made an assessment of the cost changes? Has he had any thoughts about what the implications might be for how the Pension Protection Fund might have to change its rules and/or what it might mean for the levy charged on other pension funds?

[Philip Davies]

My hon. Friend raises typically astute points that need to be considered. The short answer is yes, I have. If he will bear with me, I will come to that, because I have sought professional advice on the implications for those funds. I promise my hon. Friend that I will come to that; if he feels that I have not done so sufficiently, he can feel free to have another bash, so to speak.

Since the special rules were introduced, there have been significant advances in how the NHS treats and cares for people nearing the end of their lives, meaning that many terminally ill people now live for longer with their illness. Given the advances, the then Secretary of State for Work and Pensions announced in July 2019 that the DWP would undertake an in-depth evaluation of how the UK benefit system supports those nearing the end of their lives.

As part of that consultation, the Department sought feedback from the terminally ill, those who support them and clinicians. Much of the reasoning and findings from that report are directly applicable to the Bill.

The purpose of the evaluation was to consider the policy and implementation of the special rules relating to people defined as “terminally ill”. It aimed to take a holistic view of the support provided, and took into account direct contributions from people nearing the end of their life, who shared their first-hand experiences of accessing support via the special rules, as well as from charities and organisations supporting them. As well as receiving written evidence, the evaluation team held engagement sessions, including an event for people living with or affected by motor neurone disease; conducted telephone interviews with people nearing the end of their life; and met charities that provide support for people nearing the end of their life.

The study also took into account the views of healthcare professionals who work with and support people approaching the end of their life, through national expert palliative and end-of-life care clinical groups; and nearly 1,000 clinicians from a range of professions, in England, Scotland, Wales and Northern Ireland, also had a chance to respond through a survey. Their views should not be underestimated, as they play a large part in respect of access to financial benefits under the special rules, which is the bit I want to look at in a little more detail.

The Department’s findings agreed with the purpose of the Bill, showing that there was a consensus across all groups that the Government should extend the current six-month rule and support for the Department for Work and Pensions to adopt a 12-month end of life approach that would allow people in the final year of their life to claim under the special rules. An added benefit of the 12-month approach was that it would also bring greater consistency with the definition of “end of life” used by the NHS and right across Government.

The overwhelming evidence of medical advances in the past 30 years, since the special rules were first implemented in 1990, demonstrates that the law in its current state is no longer fit for purpose. In general, public health has changed dramatically, both with the pandemic, and with the advances in pain relief and other trial drugs that now make living with a terminal illness for longer more likely. The leaps and bounds made in both the care for terminal patients, and the identification and diagnosis of these patients, have progressed extensively. All forms of palliative care have progressed, from how people nearing the end of their life are treated and cared for, and how their conditions are managed, to how clinicians define people nearing the end of their life. That is why the questions from my hon. Friend the Member for North East Bedfordshire (Richard Fuller) are so important: it is because of these huge changes that have taken place.

New approaches in care have been developed using the Gold Standards Framework and the Daffodil standards. The “Ambitions for Palliative and End of Life care: a national framework for local action 2021-2026” NHS guidance has also led the way in reforming caring for people nearing the end of their life. The Gold Standards Framework is a registered charity and has been the UK’s leading training provider for generalist frontline staff in caring for people in the last years of life for more than 25 years. Its aim is to enable a gold standard of care for everyone with any condition, in any setting, given by any care provider, at any time in a person’s last years of life. That is focusing on the medical side of things, and this Bill hopes to provide the equivalent standard in terms of pensions. Both frameworks have been integral to the improvement in palliative care and the greater life expectancy of terminally ill patients, because with better care and treatments, the longer people will live, and hence the need for the amendment proposed by the Bill.

One of the largest issues relating to the Bill is how clinicians define who should be eligible for the special rules. The DWP survey showed a consensus across all groups that the current definition is not fit for purpose, for several reasons. Some patients who have fluctuating conditions or uncertain life expectancy found it difficult to access the special rules, as their life expectancy was indeterminable. Many conditions progress rapidly and then plateau, and some conditions do that regularly. Two groups of patients who struggle with that are motor neurone disease sufferers and cancer patients. In preparing for today’s debate, I contacted the Motor Neurone Disease Association to ask how it feels about the change and how it will affect people diagnosed with MND. I am sure everyone in the House is familiar with the “Scrap 6 Months” campaign, led jointly by the MNDA and Marie Curie, which my hon. Friend the Member for Tewkesbury (Mr Robertson) mentioned and which is supported by thousands of campaigners across the country. They told me:

“This Bill will ensure that a greater proportion of people living with MND will be”—

able to receive—

“terminal illness payments from the Pension Protection Fund and Financial Assistance Scheme...

This is important given the context of the financial impact of living with MND, especially as symptoms of the condition increase”.

So, on that basis, they very much support the Bill.

Macmillan Cancer Support plays a large part in end-of-life care and has its national call centre based in my constituency in Shipley. It told me that it was supportive of the decision to widen the criteria from six months to 12 months, ensuring that those with a terminal diagnosis have timely access to financial support when they need it most.

In some cases, the six-month rule forced clinicians and patients to have very distressing conversations about life expectancy either too early or at the wrong time for them. There are two ways in which this issue can be tackled. The first is the 12-month rule, which is where we are with the Bill, mirroring the end-of-life approach used by NHS England. The second is taking out the timescale and instead using a clinical recommendation supported by guidance, which does not have an explicit timeframe attached to it—in effect, looking at the nature of somebody’s condition.

The first option is an increase in the term of life expectancy to 12 months, which is what the Bill would do. Obviously, this approach aligns the welfare state with the work of the NHS, and so would make it easier for organisations across the UK that support people nearing the end of their lives to understand the application of the special rules, because it makes them all consistent. Clinicians have many difficult conversations when discussing end-of-life care, and this could be added into those conversations instead of being had separately, also saving the NHS time.

However, I just want to point out that any time-bound rule could be subject to the same problems, as life expectancy can fluctuate and nothing is certain—even within a year. There is therefore an argument for basing it on a clinical diagnosis, rather than a fixed term, which by definition is always going to be slightly arbitrary.

[Sir Greg Knight]

Will my hon. Friend just clarify the position? Is he saying that he would prefer the Bill to be amended, or is he happy with it as it stands?

[Philip Davies]

I am grateful to my right hon. Friend for his question. I support the Bill, because it is far better than the status quo, and it sensibly evens up those situations, which is what my hon. Friend the Member for Tewkesbury intends with the Bill—in effect, to ensure that the rules for benefits and pensions are the same and that one does not diverge from the other. My point is that this should not be the last word on the matter, because it may not necessarily be the best outcome. It is a sensible measure to take, but there is a bigger issue here about whether—across benefits and pensions—this is the right approach to take. My point is that we should not be wedded to the idea that a time limit is the right way to do it. This matter therefore warrants consideration as to whether fixed-time limits are the right way to go.

The benefits of an open-ended time period clinical recommendation is that it would allow greater access to pensions under special rules for those who have an uncertain prognosis, many of whom still have difficulty accessing benefits, whether it be six months or 12 months. The drawback of that approach is that a broader definition of terminal illness would make it difficult for clinicians to make decisions about who is eligible, which could lead to people missing out.

The aforementioned survey of clinicians’ views on this matter relating to the benefits system found that, when asked what they thought the time criteria should be under special rules, 38% of respondents preferred a 12-month model, 34% preferred a model without reference to a time limit, and only 10% supported the existing six-month model. That goes to the heart of what my right hon. Friend the Member for East Yorkshire was saying, which is that, whereas everyone agrees that the six-month rule should be changed, and that therefore my hon. Friend the Member for Tewkesbury is absolutely right to bring forward the Bill, there is not much in it between whether people think it should be 12 months, or there should not be a specific time limit. Those views should be expressed in this debate for further consideration, given the subject we are debating.

The conclusion on this point from the Department was to make a legislative move to the 12-month rule, which is a perfectly reasonable decision to make based on that survey. That is now codified in the Social Security (Additional Payments) Act 2022, and the exact same reason has been applied in my hon. Friend’s Bill. Changing the six months to 12 months is clearly the most popular option, based on that evidence, and it brings it into line with the rest of the benefits system. It would maximise the opportunity to improve awareness of the special rules and provide consistency in their application. We should be making it easier for people nearing the end of their lives to access their pension benefits and any other financial aid they are entitled to under the special rules system.

The second argument taken into consideration for access to special rules was awareness and communication. The DWP evaluation showed that much more could be done to improve awareness, and respondents felt that the information and guidance regarding access to special rules could be improved. Again, we might want the Bill to say something about making people aware of the change in the rules, because it is no good having those changes if nobody is aware of them. That is something else that needs to be considered.

Of course, charities are vital in helping people to make a special rules claim, as people are often unaware that there is financial assistance and support available from the Department for Work and Pensions for people nearing the end of their lives. However, clinicians can also play their part. Apparently, as written in a DWP report, some are not aware of special rules or have limited knowledge of them. When the Department aligned benefits with the 12-month end of life approach, it expected to be able to improve awareness among clinicians by taking advantage of training and educational resources and that, through those resources, the language should also be simplified. That was the Department’s conclusion and I assume the same will be valid in this case too.

On the point about the report, I should also mention that the clinicians raised concerns over the term “terminally ill”, which is used in the Bill. They say that the term is being used less and less these days, and patients are now more commonly referred to using terms such as “end of life.” That is a change within the field of palliative care, and one that maybe could be taken into account with the language in the Bill and in the rules that the Government use.

What actually happens when someone tries to submit a special rules claim? Is that something the Bill could make easier too? People nearing the end of their lives, or those who support them, provide the DWP with medical evidence that provides details of their clinical condition, treatment and response to treatment. That is most commonly done by a clinician completing an SR1 form. That form can be completed by GPs, by hospital doctors, or by registered nurses working in roles such as advanced nurse practitioner, Macmillan nurse, clinical specialist nurse, or practice nurse with expertise in long-term conditions management. That form can be submitted in either paper or electronic copy, and, in England, by NHS staff using an online tool.

As I said, some clinicians are not aware of the special rules or have limited knowledge of them. Therefore, the clinicians who provide SR1s do not always fully understand the special rules and what needs to be included in them. That means some patients find getting an SR1 or other medical evidence more challenging than it should be. In the DWP’s survey of the clinicians who had completed an SR1 form, the majority believed it was of value; 73% of respondents agreed or strongly agreed with the statement that the form is

“an effective way of providing evidence to support a patient’s benefit claim under the Special Rules criteria”,

but 12% disagreed or strongly disagreed. When asked to explain their reasons for their views, the majority said the form was perceived as easy and clear to use, but some considered that it failed to capture certain information that they felt was important, particularly where the patient meets the definition but is receiving active treatment, or where it is necessary to explain the details of a condition other than cancer.

If the Bill succeeds, as I hope it will, and the change is made from six months to 12 months, that will offer an even bigger chance to develop a more cohesive approach between the Department of Work and Pensions and clinicians, to ensure that the right people are claiming special rules. In order to get benefits, there must be requirements for claims and ways to claim. The Department found that more support around making a claim would improve the experience. It also received feedback on what happens once a special rules claim is made. There was a consensus from those who fed back into the evaluation that having access to an online portal or some information on the progress of their claim would be helpful.

I promised my hon. Friend the Member for North East Bedfordshire that we would talk about the fiscal side of the Bill. I contacted Tim Middleton, the director of policy and external affairs at the Pensions Management Institute, about that—I thank him for giving up his time. Two questions must be considered about the financial repercussions of the policy. First, how many applications for full commutation on the grounds of serious ill health are received by the Pension Protection Fund scheme each year? I was told that the number is in double figures—it is really not many. I should say that Tim Middleton has been working in the pensions industry since 1987, and he has only ever encountered three cases of a special rule being applied to a Pension Protection Fund scheme, so we can safely say that it is not a big number.

The second question, which my hon. Friend the Member for North East Bedfordshire rightly asked, is were the application period extended from six months to 12 months, as the Bill anticipates, what additional costs would the Pension Protection Fund incur? A member being able to apply within the extended 12 months of a diagnosis, rather than six months, would be a change. Tim Middleton, who is an expert in the field—of course, if the Government have any different figures, we would all be delighted to hear them— has said:

“Whilst there is likely to be an increase in cost, it does not seem likely that this would be significant, and, in any event, for a scheme as large as the PPF, it is expected that these costs could be easily absorbed.”

That should give my hon. Friend some comfort that the scheme will not be burdened beyond its means, but it certainly needs to be considered. It would be helpful if the Minister let us know whether her assessment is the same as the one I have been given. By way of context, in the European Court of Justice judgment in the Hampshire case in 2018, it was estimated that the additional annual cost to the Pension Protection Fund would be £215 million, and that it would affect approximately 1,200 members. The Bill changes would see nothing like that figure.

For completeness, I looked at whether anything other countries did could be usefully included in the Bill, based on their practices and experiences. Comparing the terminal illness definitions of countries with comparable systems, I found that Belgium uses the phrase “palliative status”, which is defined as

“expected survival of a maximum of 2 months, due to one or more irreversible disorders and with the intention of dying at home”.

The Netherlands defines it as

“with an expectation to die within 12 months”.

Australia and New Zealand use an “average life expectancy of less than 2 years”. In Canada, a terminal medical condition is a disease that

“cannot be cured or adequately treated and is reasonably expected to result in death within 6 months”.

Spain refers to people who will

“benefit from palliative care for example, those with an incurable, advanced and progressive disease; limited life forecast; low possibility of response to specific treatments… frequent crisis of needs; intense emotional and family impact; impact on the care structure; high demand and use of resources”.

From those definitions, we can see that there is no clear international definition of what constitutes a terminal illness for the purposes of a welfare system, whether that is a benefit system or a pensions system. Some countries, as we can see, have taken a time-based approach, and others have gone for a clinical definition. This is a wider area that needs more consideration generally, but my hon. Friend the Member for Tewkesbury’s Bill is exactly right to make the point that the two systems—the benefit system and the pension system—should be exactly the same. There is absolutely no reason why they should not. Whatever system we have in future, I very much hope that we will always be able to keep a consistency of approach, because otherwise it is not fair.

On the Bill’s commencement, my right hon. Friend the Member for East Yorkshire was absolutely right—to be fair, my hon. Friend the Member for Tewkesbury set it out clearly in speaking to the Bill, so it is not as if anything was being hidden—to focus on the fact that the measures

“come into force on such day or days as the Secretary of State may by regulations appoint.”

I share his concern. We all think something is a good idea, the House of Commons passes a Bill, as does the House of Lords, but lo and behold, nothing happens. I think most of our constituents will find that to be an intolerable situation.

Can the Minister explain why we must have such a woolly starting point in the Bill? I cannot see the need for it. Why can we not have a specific starting date? Surely, at the least, a “no later than” date—based on the reasons any delay might be needed—could be inserted. It is important that the Minister explains why we cannot have a specific date, why there might be a delay, and why we cannot have a “no later than” date added to the Bill. I am pretty sure that we will all want to consider that again either in Committee or the subsequent stages.

[Sir Greg Knight]

Has my hon. Friend examined clause 2(7), which gives the Secretary of State the power to make transitional arrangements, so that a nine-month period could be introduced for a specific time. I do not understand why we are giving the Government that flexibility. If the House and the other place approve the Bill, and the monarch signs it, it should become law and be implemented.

[Philip Davies]

My right hon. Friend makes a good point. One duty of Members in scrutinising legislation and holding the Government to account is to ensure that on a day like today, when people are anxious to get through as much as possible, the Government do not sneak into the Bill a few powers to change things more easily in future—powers that perhaps the House might not otherwise want to give them. At the moment, this House passes far too many things that give the Government of the day sweeping powers to change things without coming back to the House for meaningful scrutiny. My right hon. Friend is absolutely right to be wary of those measures.

This is a fairly short Bill, but the most extensive part is clause 2, which basically gives the Government powers to vary this and that, introduce the measures when they want, and so on. We should always be nervous about legislation that is a convenience for the Executive rather than a benefit for our constituents. It is incumbent on the Minister to explain why the Government need those powers. Is there a specific reason that each of those powers has been added to the Bill, or is it a typical catch-all—“Let’s shove the lot in there just in case we might need it at some point in the future”? We should always be wary of such measures. If there is a good reason that each subsection in clause 2 is needed, let us hear it so that we can all make our own minds up about them. If they are not needed and have just been shoved in for a bit of convenience in case the powers are needed at a later date, perhaps the House might want to say, “Well, we don’t think you should have those powers. If you want to do something different, you should come back at a later date and make that case.” I look forward to hearing the Minister’s response on that.

Those are perhaps things that we could come back to in the Bill’s remaining stages, but in the meantime, I certainly support the thrust of what my hon. Friend the Member for Tewkesbury is doing. He should be commended for focusing on something that is important to many people and will make a massive difference to their lives, and he will be thanked by many in my constituency and beyond. On that basis, I support the Bill’s Second Reading.