A PENSION ANOMALY

Evening Post, Volume CXXVII, Issue 132, 7 June 1939, Page 10

A PENSION ANOMALY

A correspondent recently pointed out an anomaly in the Social Security Act relating to the computation of the capital value of accumulated property. Briefly, an applicant for the old age benefit may have property to the value of £500, not including furniture or personal effects or the home in - which he resides without suffering any reduction of the pension. But the Act, repeating an amendment introduced in 1936, excludes also property in land or mortgages. Income from such property is calculated to determine the allowable income, but the capital sum is not taken into account. The effect of

thissis that a pensioner who has an income of £52 a year from land or mortgages is in a much better position than one who receives a siraiilar sum from the investment of £'0300 in Government Stock or about #2,000 in the Post Office Savings IS'ank. The property in Stock would show £800 excess capital and in the Bank £1500, so that a reduction of the pension by £1 for each f£lo of the excess would leave no < pension. This would be so even though the income came within the allowable amount. The anomaly may have had its origin in the uncertainty during the depression of income from land or mortgages; but it certainly introduces a distinction which is quite unfair to many old people. This is especially so since elderly people often prefer investment in gilt-edge securities which relieve them of worry. At the root of the unfairness, however, is the means test for which there was justification when pensions were free, lout Avhich is not justifiable when many deserving persons must contribute heavily towards the cost.