CIVIL SERVICE PENSIONERS' ALLIANCE

CSPA
First Floor,
102-104, Park Lane,
Croydon,
Surrey, CR0 1JB
Tel: 020 8688 8418
E-mail: enquiries@cspa.co.uk

OVERPAYMENT OF PUBLIC SERVICE PENSIONS

Cabinet Office tell us that about 16,000 out of 570,000 Civil Service Pensioners have been receiving pension overpayments, due to errors in calculating GMP increases. Those who have been overpaid will receive letters at the end of January 2009 telling them the extent of their overpayment and the effect on their continuing pension. If you do not receive such a letter during the first week of February, you may assume that you are not affected.
 
The Government has said that it will not try to recover the overpayments, some of which date back for as long as 30 years. However, in accordance with legal requirements, pension administrators will adjust pensions to the correct level from 06 April 2009. In many cases the reduction will be outweighed by the 5% pension increase due on 06 April 2009. But some pensioners will suffer an actual reduction in their pensions. We have asked whether overpaid pensions might be retained on a mark time basis but we have been told that Ministers have firmly rejected that proposal. Therefore, those pensioners who have been overpaid will also receive a leaflet saying what additional help might be available to them.
 
The letters will state the amount of the revised pension from 06 April 2009 and will be accompanied by an explanation of how the overpayment has occurred and a worked example, but not an individual breakdown of their own calculations. We are satisfied with the methodology being used but those pensioners who wish to do so can ask for a breakdown of their own calculations. They can ask for that and refer any other questions they might have to Capita, who have set-up a dedicated helpline 0800 141 2858 or e-mail gmp.enquiries@capita.co.uk
 
If, having considered the explanation provided by Civil Service Pensions and Capita, a member still believes that s/he has been unfairly or incorrectly treated under the rules, they should send all the relevant paperwork, together with their reasons for appeal to either John Jarvis, CSPA Secretary [Administration] 5 St Anns Crescent, Gosport, Hants PO12 3JJ [email administration@cspa.co.uk] or to Mike Duggan at Alliance HQ [email mike.duggan@cspa.co.uk ] However, members should be aware that appeals against the principle of the correction will have very little prospects of success.

PENSIONERS WELCOME EARLY CHRISTMAS PRESENT

Pensioner organisations today welcomed the Chancellor's announcement that he will give every pensioner a one off payment of £60, on top of their £10 Christmas bonus.
 
The Civil Service Pensioners' Alliance (CSPA) and UNITE (The National Federation of Royal Mail and BT Pensioners) have been calling on the Government for a major increase in the Christmas Bonus this winter, to tide pensioners over during this difficult period.
 
The £10 Christmas Bonus was introduced in 1972 and represented a 'double pension', as the Basic State Pension was £6.52 a week. The weekly Basic State Pension today is now £90.70 per week, but until today the Christmas Bonus remained at £10.
 
CSPA and UNITE are delighted that the Christmas Bonus has been increased to provide a 'stop-gap' until the Government increases the Basic State Pension by 5% in April 2009.
 
Mike Duggan, General Secretary of the CSPA, said:

"CSPA members will be very pleased that Government has listened to their concerns and has provided pensioners with some much needed relief this Christmas."

Roger Turner, General Secretary of UNITE, added:

"Christmas is always an expensive time of year. This year, the current economic climate meant that many feared that they would not be able to cope. The increase in the Christmas Bonus will allow many pensioners to celebrate this Christmas."
 

ABOLITION OF THE 10% INCOME TAX RATE

The Government abolished the 10% tax rate for earned income and pensions from 07 April 2008. Those aged 65 or over will be compensated by increased age-related personal allowances and by a drop in the standard rate of tax from 22% to 20%. However, those under age 65 and on low incomes stood to lose up to about £200 a year in increased tax. Following our protests to Ministers and MPs and a considerable rebellion by Labour back benchers, the Government announced on 13 May that it will arrange compensation for those who are adversely affected. The tax-free personal allowance has been raised by £600 to £6,035 (and, so that higher rate tax-payers do not gain from this, the starting point for the 40% tax band has been lowered by £1,200 to £34,800). These new arrangements will be implemented in the Autumn and will be back-dated to 07 April 2008. Even after this measure, some 1.1million families would still be worse off, albeit to a lesser extent. Following further pressure on Ministers, Jane Kennedy said on 1 July that further proposals would be made in this year's Pre-Budget Report to provide further compensation for those still out of pocket. She said "Yes, there will be concrete proposals, yes, they will address the point, yes they will be targeted, yes, they will be implemented as soon as soon as possible." So, we are now hopeful that everyone affected will be fully compensated but we won't know how until the Pre Budget Report is published in November or December. In the meantime, we will keep up the pressure on Ministers.

INFLATION

In May 2009 the RPI was minus 1.1%, the RPIX (RPI excluding mortgage interest payments) was 1.6% and the CPI was 2.2%.
 
In April 2009 average earnings (excluding bonuses) rose by 2.7% and average earnings (including bonuses) rose by 0.8%.
 

PENSION INCREASE FOR 2009

The September RPI determines the pension increase for the following April. Therefore, from 06 April 2009 both the state retirement pension and Civil Service pensions will increase by 5.0%.
 

DEFLATION

Members have asked us "what will happen if inflation falls to zero or less in September 2009?" The Government is publicly committed to up-rating the basic state pension by RPI or 2.5%, whichever is the higher. There is no such commitment for public service occupational pensions. However, there is no provision in pension increase legislation to reduce public service pensions. Therefore, if inflation in September 2009 is zero or less, there will be no increase and no decrease in Civil Service pensions in April 2010. The increase from 6 April 2009 is already secured by virtue of the September 2008 RPI figure.
 

THE NATIONAL INSURANCE FUND

A recent report by the Government Actuary Department showed that at the end of 2007-2008 the National Insurance Fund was in surplus to the tune of £46 billion. By the end of 2012-2013 the surplus is expected to rise to £114 billion. In January 2008 the Secretary of State for Work and Pensions said, in a reply to a Parliamentary Question, that the cost of increasing the basic state pension to the pension credit guarantee level would be £21 billion in 2008-2009.
 

OUTSTANDING CS PENSION ISSUES

The five long-outstanding Civil Service pension issues are:

• Widow's/widower's pensions for life, irrespective of re-marriage or co-habitation;
  
• Pensions for widows/ widowers of post retirement marriages;
  
• Pre-1948 service to count in full;
  
• The National Insurance Modification to be scrapped; and
  
• Pay-pause victims to be recompensed.

We have been campaigning on these issues for many years but have not yet persuaded the politicians. We will continue to make representations on all these issues whenever the opportunity presents itself.

NPC's PENSIONERS' CHARTER

We are affiliated to the National Pensioners' Convention and we support their Pensioners' Charter in the following terms:-
 
" Every man and woman on reaching state pensionable age will have the right to:

• a basic state pension set above the official poverty level and linked to average male earnings,
• a warm and comfortable home,
• free health care treatment based on clinical need and an annual comprehensive health check,
• free community care and services to assist living at home,
• free long-term care,
• free nationwide travel on all public and local transport,
• free education, access to and participation in leisure and cultural activities,
• goods, services and benefits without age discrimination,
• active engagement and consultation on national and local issues affecting older citizens,
• advocacy, dignity, respect and fair treatment in all aspects of their lives,

As a first step towards establishing these rights we call on the government to implement the Pensioners' Manifesto."

THE STATE PENSION

One hundred years ago the first 'pensioners' collected their state pension at the post office. It was set at 5 shillings a week and paid to men and women on reaching 70 years of age. Even though the pension was means-tested, it was a tremendous advance in social policy and the first time that the state had recognised that it had a responsibility to look after those in old age. But today, figures show that after a century of the state pension, pensioner poverty remains:

• In 2007/8 2.5 million pensioners were living below the official poverty line and 600,000 pensioners were living in severe poverty;
• About two thirds of those pensioners living in poverty are women. Up to as many as 5m do not qualify for a full state pension because they were unable to pay the full national insurance contributions because of caring for their families or being in low paid employment;
• 62% of pensioner couples have an annual income of £15,000 or less, and 45% of all single pensioners have an annual income of £10,000 or less;
• In a recent EU survey, only pensioners in Latvia, Spain and Cyprus were more likely to fall into poverty than those in the UK. The Institute for Fiscal Studies concludes that the proportion of pensioners below the poverty threshold will remain at its current level for at least the next decade, despite government reforms;
• A recent survey by Scottish Widows found that 1 in 3 future pensioners will not have sufficient income to avoid poverty when they retire. Up to 9m workers currently have no other pension provision than that which will be provided by the state when they retire;
• Means-tested benefits fail to reach 1.8 million pensioners and about £2.8 billion a year remains unclaimed.

Therefore, we support the National Pensioners' Convention in their claim for the basic state pension to be set above the official poverty level of £165 a week, to be paid to all men and women and increased each year in line with earning or the retail price index, whichever is greater.