It was always a source of confusion that people on benefits who went into hospital had their benefits “downrated” (reduced) after four, six, 12 weeks and so on. The logic of this was that if a person was getting free hospital care, including food, heating and so on, then they shouldn’t be getting the full benefits due to them.
However, downrating caused hardship in many cases. The patient might be reduced to a “pocket money” rate of hospital allowance but still have high expenses outside the hospital.
Gordon Brown announced in his 9 April budget that with immediate effect, pensioners would no longer have their pensions reduced after six weeks in hospital. And the government has confirmed that the abolition of downrating will apply to all benefits, except disability living allowance and attendance allowance.
All the following benefits are not downrated until the patient has been in hospital for 52 weeks: retirement pension, pension credit (from October 2003), bereavement allowance, widowed parent’s allowance, widowed mother’s allowance, widow’s pension, incapacity benefit, severe disablement allowance, income support, minimum income guarantee, housing benefit and council tax benefit. In addition, new claims, at the full rate, can be made for people who have been admitted to hospital.
People on jobseeker’s allowance won’t be able to sign on while in hospital, so their claim for that benefit will stop. But they should claim income support or incapacity benefit, or both, at the full rate.
The change comes into effect from 21 May. Anyone who entered hospital on or after 9 April will not have their benefit downrated unless they receive more than 52 weeks’ hospital in-patient treatment.
Those currently in hospital and whose benefit has already been downrated but who have spent less than 52 weeks in hospital will have their benefits restored from 21 May. No arrears of benefit will be paid for time spent in hospital before 21 May. Time already spent in hospital will count towards the 52 weeks.
Patients will only have to tell the social security office or the housing benefit office that they are in hospital in certain circumstances. This mainly applies to people getting attendance allowance or disability living allowance. They will have to inform the Disability Benefits Unit in Blackpool that they have been in hospital for four weeks, so that their allowances can be suspended.
They should also inform the local social security office and the local authority, if they are receiving the severe disability premium or enhanced disability premium as part of their income support or housing and council tax benefit. This includes the extra amount for being severely disabled that will be within pension credit from October 2003. These premiums will be lost when the attendance allowance or disability living allowance is lost.
Child benefit is not on the list of benefits immune from downrating, nor is guardian’s allowance. So if a child is in hospital, the claimant still needs to be spending something on the child to remain entitled after the 12th week. Rules concerning carers will also remain the same. Carers allowance is payable for up to 12 weeks, if it is the carer who is in hospital. Carers allowance will stop when the disabled person’s allowances stop, if it is the disabled person who goes into hospital.
Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered please write to him c/o Community Care.