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(7) Section 30(5) to (7) of the 2008 Act (as amended by this section) applies in
relation to the jobholder with the following modifications—

(a) references in section 30(5) and (6) of that Act to the closure date are to
be read as references to the commencement date, and

(b) 5references in section 30(5) and (6) of that Act to the automatic
enrolment date are to be read as references to—

(i) 19 December 2012, or

(ii) if later, the employer’s first enrolment date;

and section 30(3) and (4) of that Act does not apply.

(8) 10Expressions used in this section and in section 30 of the 2008 Act have the same
meaning in this section as in that section.

37 Penalty notices under sections 40 and 41 of the Pensions Act 2008 etc

(1) In sections 40(1)(d) and 41(1)(d) of the Pensions Act 2008 (fixed and escalating
penalty notices), at the end insert “, so far as relevant to the exercise of any of
15its functions under or by virtue of this Part”.

(2) In section 72 of the Pensions Act 2004 (powers to require information), in
subsection (1A), for “Chapter 2 of Part 1 of the Pensions Act 2008 or section 51
of that Act” substitute “or by virtue of Part 1 of the Pensions Act 2008”.

38 Unpaid scheme contributions

(1) 20The Pension Schemes Act 1993 is amended as follows.

(2) In section 123 (payment by Secretary of State of unpaid scheme contributions
on employer insolvency: interpretation)—

(a) in subsection (3), for the definition of “contract of employment” and
related expressions substitute—

(b) in subsection (3), in paragraph (b) of the definition of “holiday pay”, for
30“the employee’s contract of employment” substitute “the worker’s
contract”;

(c) after subsection (3) insert—

(3A) Section 89 of the Pensions Act 2008 (agency workers) applies for
the purposes of this Chapter as it applies for the purposes of
35Part 1 of that Act.

(3B) References in this Chapter to a worker include references to an
individual to whom Part 1 of the Pensions Act 2008 applies as if
the individual were a worker because of regulations made
under section 98 of that Act; and related expressions are to be
40read accordingly.

(3) In section 124 (Secretary of State’s duty to pay unpaid contributions)—

(a) for “an employee”, in each place, substitute “a worker”;

(b) for “the employee”, in each place, substitute “the worker”;

(c) for “the employee’s” substitute “the worker’s”;

(d) 45for “employees”, in each place, substitute “workers”.

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(4) In section 161, for “contract of employment” substitute “worker’s contract”.

(5) In section 165(7)—

(a) in paragraph (a), for “contract of employment the employee” substitute
“worker’s contract the worker”;

(b) 5in paragraph (b), for “employee” substitute “worker”.

Other

39 Power to require pension levies to be paid in respect of past periods

(1) The Secretary of State may by regulations provide for the Pensions Act 2004,
and regulations made under it, to have effect, so far as relating to the
10requirement to pay pension levy, as if the amendments made by the 2010
regulations had always had effect.

(2) Regulations under this section may in particular—

(a) modify the application of the Pensions Act 2004, or regulations made
under it, in relation to amounts of pension levy required to be paid
15because of regulations under this section;

(b) provide for interest to be charged at a specified rate on such amounts
(including in respect of periods before the coming into force of
regulations under this section).

(3) In this section—

40 Prohibition and suspension orders: directors of corporate trustees

(1) The Pensions Act 1995 is amended as follows.

(2) After section 3 insert—

3A 35Prohibition orders: directors of corporate trustees etc

(1) A company or Scottish partnership is prohibited from being a trustee of
a trust scheme at any time when an individual who is a director of the
company or a partner in the partnership is prohibited from being a
trustee of the scheme by an order under section 3.

(2) 40Where a company or partnership which is a trustee of a trust scheme
becomes prohibited under subsection (1) in relation to the scheme, that
subsection has the effect of removing the company or partnership as a
trustee.

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(3) The Authority may, on the application of a company or Scottish
partnership, give notice in writing to the applicant waiving the
prohibition under subsection (1)

(a) in relation to an individual against whom an order under
5section 3 has been made, and

(b) either generally or in relation to a particular scheme or
particular description of schemes.

(4) A notice may be given under subsection (3) only if the Authority is
satisfied that the applicant would be a fit and proper person to be a
10trustee of the scheme or schemes to which the notice relates despite the
individual being, or even if the individual were to become, a director of
or partner in the applicant.

(5) A notice given at any time under subsection (3) cannot affect anything
done before that time.

(6) 15An application under subsection (3) may not be made—

(a) during the period within which the determination to exercise
the power to make the order against the individual may be
referred to the Tribunal under section 96(3) or 99(7) of the
Pensions Act 2004 (whether by a company or partnership which
20became prohibited under subsection (1) on the making of the
order or by another person), and

(b) if the determination is so referred, until the reference, and any
appeal against the Tribunal’s determination, has been finally
disposed of.

(7) 25The Authority must prepare and publish a statement of the policies
they intend to adopt in relation to the exercise of their powers under
this section.

(8) The Authority may revise any statement published under subsection
(7) and must publish any revised statement.

(9) 30References in this section to an order under section 3 are to an order
under that section made on or after the date on which section 40(2) of
the Pensions Act 2013 comes fully into force.

(3) Section 4 (Pensions Regulator’s power to suspend trustee of occupational
pension scheme) is amended as follows.

(4) 35In subsection (1)(f), after “paragraph” insert “(aa),”.

(5) In subsection (2)(a), after “or (aa)” insert “or, in a case where the Authority
would have power to suspend a director or partner under paragraph (aa), by
virtue of paragraph (f)”.

(6) Schedule 17 contains consequential amendments.

41 40Preparation of guidance for pensions illustrations

In section 16 of the Companies (Audit, Investigations and Community
Enterprise) Act 2004 (grants to bodies concerned with accounting standards
etc), in subsection (2), after paragraph (o) insert—

(oa) exercising functions under regulations made under section
45113(3A) of the Pension Schemes Act 1993 or section 109(3A) of

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the Pension Schemes (Northern Ireland) Act 1993 (preparing
guidance for pensions illustrations);.

42 Pensions Regulator’s objectives

In section 5(1) of the Pensions Act 2004, after paragraph (c) insert—

(cza) 5in relation to the exercise of its functions under Part 3 only, to
minimise any adverse impact on the sustainable growth of an
employer,.

43 Maximum period between scheme returns to be 5 years for micro schemes

(1) Section 63 of the Pensions Act 2004 is amended as follows.

(2) 10After subsection (3) insert—

(3A) But subsection (3)(a) has effect as if the reference to three years were a
reference to five years if—

(a) the trustees or managers have complied with paragraph (b) of
section 62(2),

(b) 15the information they provided under that paragraph included
the number of members of the scheme, and

(c) that number was no more than 4.

(3) After subsection (4) insert—

(4A) But subsection (4)(a) has effect as if the reference to three years were a
20reference to five years if—

(a) on the date on which the previous scheme return notice was
issued, the number of members of the scheme was recorded in
the register, and

(b) that number was no more than 4.

44 25Pension Protection Fund: increased compensation cap for long service

See Schedule 18 for amendments increasing the Pension Protection Fund
compensation cap for people with long pensionable service.

Part 5 Final provisions

45 30Power to make consequential amendments etc

(1) The Secretary of State or the Treasury may by order make consequential,
incidental or supplementary provision in connection with any provision made
by this Act.

(2) An order under this section may amend, repeal, revoke or otherwise modify
35any enactment (whenever passed or made).

(3) “Enactment” includes an enactment contained in subordinate legislation
within the meaning of the Interpretation Act 1978.

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46 Regulations and orders

(1) Regulations and orders under this Act are to be made by statutory instrument.

(2) A statutory instrument containing (whether alone or with other provisions)—

(a) regulations under section 3, 18(5) or 27,

(b) 5the first regulations under section 10 or 20,

(c) an order under section 45 that amends or repeals a provision of an Act,
or

(d) regulations under Schedule 16,

may not be made unless a draft of the instrument has been laid before and
10approved by a resolution of each House of Parliament.

(3) Any other statutory instrument containing regulations or an order under this
Act is subject to annulment in pursuance of a resolution of either House of
Parliament.

(4) Subsection (3) does not apply to a statutory instrument containing an order
15under section 48(1) or (7) only.

(5) A power to make regulations or an order under this Act may be used—

(a) to make different provision for different purposes;

(b) in relation to all or only some of the purposes for which it may be used.

(6) Regulations or orders under this Act may include incidental, supplementary,
20consequential, transitional, transitory or saving provision.

47 Extent

(1) This Act extends to England and Wales and Scotland only, subject to the
following provisions of this section.

(2) Any amendment or repeal made by this Act has the same extent as the
25enactment to which it relates.

(3) This Part extends also to Northern Ireland.

48 Commencement

(1) This Act comes into force on such day or days as the Secretary of State may by
order appoint, subject as follows.

(2) 30An order under subsection (1) may appoint different days for different
purposes.

(3) This Part comes into force on the day on which this Act is passed.

(4) The following come into force at the end of the period of 2 months beginning
with the day on which this Act is passed—

(a) 35Part 2;

(b) sections 30 and 31;

(c) section 37;

(d) sections 41 and 42;

(e) paragraph 30(2) of Schedule 13.

(5) 40Part 1 comes into force on 6 April 2016, so far as not brought into force earlier
by an order under subsection (1).

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(6) The Secretary of State may by order—

(a) amend subsection (5) so as to replace the reference to 6 April 2016 with
a later date, and

(b) make corresponding amendments in Part 1 or any enactment amended
5by it.

(7) The Secretary of State may by order make transitional, transitory or saving
provision in connection with the coming into force of any provision of this Act.

49 Short title

This Act may be cited as the Pensions Act 2013.

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SCHEDULES

Section 5

SCHEDULE 1 Transitional rate of state pension: calculating the amount

Part 1 5Introduction

1 (1) This Schedule sets out how to calculate the amounts used to work out the
transitional rate of a person’s state pension.

(2) Part 2 of the Schedule sets out how to calculate the amount for a person’s
pre-commencement qualifying years.

(3) 10Part 3 of the Schedule sets out how to calculate the amount for a person’s
post-commencement qualifying years (if any).

Part 2 Amount for pre-commencement qualifying years

How to calculate the amount for pre-commencement qualifying years

2 15A person’s amount for pre-commencement qualifying years is calculated as
follows.

Step 1 - calculate the person’s pension under the old system

Calculate the weekly rate based on the old state pension and graduated
retirement benefit (see paragraph 3 for more about this).

20Step 2 - calculate a pension based on the new system

Calculate the weekly rate based on the new state pension (see paragraph 4
for more about this).

Step 3 - take whichever rate is higher (the foundation amount)

Take whichever of the rates found under Steps 1 and 2 is higher.

25Step 4 - revalue to date when the person reached pensionable age

Revalue the amount of that rate in accordance with paragraph 6.

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Step 1: calculation of the person’s pension under the old system

3 (1) For the purposes of Step 1 of the calculation in paragraph 2, the weekly rate
based on the old state pension and graduated retirement benefit is—

(a) the rate of any Category A retirement pension and graduated
5retirement benefit to which the person would have been entitled if
the person had reached pensionable age on 6 April 2016, or

(b) the rate of any graduated retirement benefit to which the person
would have been entitled under section 36(7) of the National
Insurance Act 1965 (persons not entitled to retirement pension) if the
10person had reached pensionable age on that date.

(2) The following rules apply for the purposes of calculating that rate.

(3) Calculate the rate that would have had effect on 6 April 2016 (but see sub-
paragraph (6)).

(4) Ignore—

(a) 15the amendments made by paragraphs 46 and 48 of Schedule 12
(which limit Category A retirement pensions and graduated
retirement benefit to people who reach pensionable age before 6
April 2016);

(b) any requirement to make a claim;

(c) 20any provision suspending payment of, or disqualifying a person
from receiving, any amount;

(d) section 45B of the Contributions and Benefits Act (reduction of
additional pension because of pension sharing);

(e) section 37 of the National Insurance Act 1965 (graduated retirement
25benefit for widows etc).

(5) Read the reference in section 45(4)(b) of the Contributions and Benefits Act
(additional pension) to a person’s working life as a reference to the period—

(a) beginning with the tax year in which the person reached 16, and

(b) ending with the tax year before the one in which the person actually
30reached pensionable age.

(6) If an order under section 150 or 150A of the Administration Act (up-rating)
is made before 6 April 2016 and it provides for an increase to come into force
after that date, it is to be treated for the purposes of calculating the rate under
this paragraph as having already come into force.

(7) 35A determination under section 48A(2) of the Pension Schemes Act 1993
(contracting-out: reinstatement in state scheme following payment of
contributions equivalent premium) made on or after 6 April 2016 is to be
treated for the purposes of calculating the rate under this paragraph as
having been made before 6 April 2016.

40Step 2: calculation of a pension based on the new system

4 (1) For the purposes of Step 2 of the calculation in paragraph 2, the weekly rate
based on the new state pension is as follows.

(2) If the person has 35 or more pre-commencement qualifying years, the rate is
equal to—

(a) 45the full rate of the state pension on 6 April 2016, less

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(b) any amount to reflect contracting out under the old system (see
paragraph 5).

(3) If the person has fewer than 35 pre-commencement qualifying years, the rate
is equal to—

(a) 5the appropriate proportion of the full rate of the state pension on 6
April 2016, less

(b) any amount to reflect contracting out under the old system (see
paragraph 5).

(4) The “appropriate proportion”, in relation to a person, is—


10

5 In paragraph 4(2) and (3) references to an “amount to reflect contracting out
under the old system” are to an amount equal to any difference between—

(a) the amount of any additional pension included in the Category A
retirement pension calculated for the purposes of Step 1 of the
15calculation in paragraph 2, and

(b) the amount of any additional pension that would have been included
if the following were omitted—

(i) in section 45(2)(b) of the Contributions and Benefits Act, the
words “but before the first appointed year”,

(ii) 20section 45(2)(c) and (d) of that Act, and

(iii) sections 46 and 48A of the Pension Schemes Act 1993.

Step 4: revaluation

6 (1) This paragraph determines how the amount mentioned in Step 4 of the
calculation in paragraph 2 is to be revalued for the purposes of that Step.

(2) 25If the amount is equal to or less than the full rate of the state pension on 6
April 2016, the amount is to be revalued in accordance with increases in the
full rate of the state pension (see sub-paragraph (4)).

(3) If the amount is greater than the full rate of the state pension on 6 April
2016—

(a) 30so much of the amount as is equal to the full rate of the state pension
on 6 April 2016 is to be revalued in accordance with increases in the
full rate of the state pension (see sub-paragraph (4)), and

(b) so much of the amount as exceeds the full rate of the state pension on
that date is to be revalued in accordance with increases in the general
35level of prices (see sub-paragraph (5)).

(4) For the purposes of sub-paragraphs (2) and (3)(a), an amount is revalued in
accordance with increases in the full rate of the state pension by increasing
it by the same percentage as any increase in the full rate of the state pension
in the period—

(a) 40beginning with 6 April 2016, and

(b) ending with the day on which the person reached pensionable age.

(5) For the purposes of sub-paragraph (3)(b), an amount is revalued in
accordance with increases in the general level of prices by adding—

(a) the amount, and

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(b) the amount multiplied by the revaluing percentage specified in the
last order under section 148AC(3) of the Administration Act to come
into force before the person reached pensionable age.

Part 3 5Amount for post-commencement qualifying years

7 (1) A person’s amount for post-commencement qualifying years (if any) is
calculated as follows.

(2) If the person has 35 or more post-commencement qualifying years, the
amount is equal to the full rate of the state pension on the day on which the
10person reached pensionable age.

(3) If the person has fewer than 35 post-commencement qualifying years, the
amount is equal to the following proportion of the full rate of the state
pension on the day on which the person reached pensionable age—


Section 5

15SCHEDULE 2 Transitional rate of state pension: up-rating

1 This Schedule sets out how to up-rate the transitional rate of a person’s state
pension.

2 In this Schedule a reference to the transitional rate of a person’s state pension
20is to the rate—

(a) taking into account any reduction under section 14, but

(b) ignoring any increase under section 17.

3 (1) The transitional rate of a person’s state pension is to be increased under this
paragraph if it is equal to or less than the full rate.

(2) 25If at any time the full rate of the state pension is increased, the person’s
transitional rate is increased (at that time) by the same percentage as the
increase in the full rate.

4 (1) The transitional rate of a person’s state pension is to be increased under this
paragraph if it exceeds the full rate.

(2) 30If at any time the full rate of the state pension is increased, the person’s
transitional rate is increased (at that time) by the same amount as the amount
by which the full rate is increased.

(3) If at any time an order under section 151A of the Administration Act comes
into force, the person’s transitional rate is increased (at that time) by an
35amount equal to the appropriate percentage of the excess.

(4) In sub-paragraph (3)—

Section 7

SCHEDULE 3 Survivor’s pension under section 7: inherited amount

5Introduction

1 This Schedule—

(a) sets out the circumstances in which a person (the “pensioner”) is
entitled to an inherited amount for the purpose of section 7, and

(b) determines that amount.

10Dead spouse or civil partner in old state pension system etc

2 (1) A pensioner whose spouse or civil partner has died is entitled to an inherited
amount under this paragraph if—

(a) the marriage took place or the civil partnership was formed before 6
April 2016,

(b) 15the spouse or civil partner died before 6 April 2016,

(c) the pensioner was under pensionable age when the spouse or civil
partner died, and

(d) the pensioner would, on reaching pensionable age, have been
entitled to a Category B retirement pension under section 48B(4)
20or (4A) or 48BB of the Contributions and Benefits Act if the words
“before 6 April 2016” were omitted.

(2) The inherited amount is equal to the weekly rate at which that Category B
retirement pension would have been payable on the day on which the
pensioner reached pensionable age if any element of the rate attributable to
25the basic pension were ignored.

3 (1) A pensioner whose spouse or civil partner has died is entitled to an inherited
amount under this paragraph if—

(a) the marriage took place or the civil partnership was formed before 6
April 2016,

(b) 30the spouse or civil partner reached pensionable age before 6 April
2016 but died on or after that date,

(c) the pensioner was under pensionable age when the spouse or civil
partner died, and

(d) the pensioner would, on reaching pensionable age, have been
35entitled to a Category B retirement pension under section 48BB of the
Contributions and Benefits Act if in subsection (3) of that section: (i)
the words “before 6 April 2016” were omitted, and (ii) the reference
to a bereavement allowance were a reference to bereavement
support payment under section 27 of this Act.

(2) 40The inherited amount is equal to the weekly rate at which that Category B
retirement pension would have been payable on the day on which the
pensioner reached pensionable age if section 48BB(8) and (9) of the
Contributions and Benefits Act were ignored.

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4 (1) A pensioner whose spouse or civil partner has died is entitled to an inherited
amount under this paragraph if—

(a) the marriage took place or the civil partnership was formed before 6
April 2016,

(b) 5the spouse or civil partner reached pensionable age before 6 April
2016 but died on or after that date,

(c) the pensioner was over pensionable age when the spouse or civil
partner died, and

(d) the pensioner would, when the spouse or civil partner died, have
10been entitled to a Category B retirement pension under section
48B(1) or (1A) of the Contributions and Benefits Act if the words
“before 6 April 2016” were omitted.

(2) The inherited amount is equal to the weekly rate at which that Category B
retirement pension would have been payable on the day on which the
15spouse or civil partner died if any element of the rate attributable to the basic
pension were ignored.

Dead spouse or civil partner in new state pension system

5 (1) A pensioner whose spouse or civil partner has died is entitled to an inherited
amount under this paragraph if—

(a) 20the marriage took place or the civil partnership was formed before 6
April 2016,

(b) the pensioner was over pensionable age when the spouse or civil
partner died,

(c) the spouse or civil partner was, immediately before his or her death,
25entitled to a state pension payable at the transitional rate, and

(d) that transitional rate exceeded the full rate of the state pension.

(2) The inherited amount is half of the amount by which the transitional rate of
the state pension for the spouse or civil partner exceeded the full rate of the
state pension immediately before the death.

6 (1) 30A pensioner whose spouse or civil partner has died is entitled to an inherited
amount under this paragraph if—

(a) the marriage took place or the civil partnership was formed before 6
April 2016,

(b) the pensioner was under pensionable age when the spouse or civil
35partner died,

(c) the spouse or civil partner was, immediately before his or her death,
entitled to a state pension payable at the transitional rate,

(d) that transitional rate exceeded the full rate of the state pension, and

(e) the pensioner did not marry or form a civil partnership after the
40death and before reaching pensionable age.

(2) The inherited amount is half of the amount by which the transitional rate of
the state pension for the spouse or civil partner would have exceeded the full
rate of the state pension if he or she had been alive on the day on which the
pensioner reached pensionable age.

7 (1) 45A pensioner whose spouse or civil partner has died is entitled to an inherited
amount under this paragraph if—

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(a) the marriage took place or the civil partnership was formed before 6
April 2016,

(b) the pensioner was over pensionable age when the spouse or civil
partner died,

(c) 5the spouse or civil partner was under pensionable age when he or
she died but would have been entitled to a state pension payable at
the transitional rate if he or she had reached pensionable age on the
day of the death, and

(d) that transitional rate would have exceeded the full rate of the state
10pension.

(2) The inherited amount is half of the amount by which the transitional rate of
the state pension for the spouse or civil partner would have exceeded the full
rate of the state pension if he or she had reached pensionable age on the day
of the death.

8 (1) 15A pensioner whose spouse or civil partner has died is entitled to an inherited
amount under this paragraph if—

(a) the marriage took place or the civil partnership was formed before 6
April 2016,

(b) the pensioner was under pensionable age when the spouse or civil
20partner died,

(c) the spouse or civil partner died on or after 6 April 2016,

(d) the spouse or civil partner was under pensionable age when he or
she died,

(e) the spouse or civil partner would have been entitled to a state
25pension payable at the transitional rate if he or she had reached
pensionable age on the same day as the pensioner,

(f) that transitional rate would have exceeded the full rate of the state
pension, and

(g) the pensioner did not marry or form a civil partnership after the
30death and before reaching pensionable age.

(2) The inherited amount is half of the amount by which the transitional rate of
the state pension for the spouse or civil partner would have exceeded the full
rate of the state pension if he or she had reached pensionable age on the same
day as the pensioner.

35Supplementary

9 When determining entitlement to, or calculating, an inherited amount under
this Schedule based on entitlement to an old state pension or a state pension
under this Part of this Act ignore—

(a) any requirement to make a claim for that pension;

(b) 40any provision suspending payment of, or disqualifying a person
from receiving, any amount of that pension.

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Section 7

SCHEDULE 4 Survivor’s pension under section 7: up-rating

Introduction

1 This Schedule sets out how to up-rate the rate of a person’s state pension
5under section 7.

2 In this Schedule a reference to the rate of a person’s state pension is to the
rate—

(a) ignoring any reduction under section 7(4) (in the case of a state
pension under section 7),

(b) 10taking into account any reduction under section 14 (in the case of a
state pension under section 4), and

(c) ignoring any increase under section 17.

3 In this Schedule a reference to “the amount of any state pension that has
priority” means the rate of any state pension to which the person is entitled
15under section 2, 4 or 12.

Rate of section 7 pension, when added to any priority pension, is less than the full rate

4 (1) The rate of the person’s state pension under section 7 is to be increased
under this paragraph if, when added to the amount of any state pension that
has priority, it is equal to or less than the full rate of the state pension.

(2) 20If at any time the full rate is increased, the rate of the person’s state pension
under section 7 is increased (at that time) by the same percentage as the
increase in the full rate.

Rate of section 7 pension, when added to any priority pension, straddles the full rate

5 (1) The rate of the person’s state pension under section 7 is to be increased
25under this paragraph if—

(a) the amount of any state pension that has priority is less than the full
rate of the state pension, but

(b) the rate of the state pension under section 7, when added to the
amount of any state pension that has priority, exceeds the full rate.

(2) 30If at any time the full rate of the state pension is increased, the rate of the
person’s state pension under section 7 is increased (at that time) by an
amount equal to the appropriate percentage of the shortfall immediately
before that time.

(3) If at any time an order under section 151A of the Administration Act comes
35into force, the rate of the person’s state pension under section 7 is increased
(at that time) by an amount equal to the appropriate percentage of the excess
immediately before the order comes into force.

(4) In this paragraph—

Priority pension alone is equal to or higher than the full rate

6 (1) The rate of the person’s state pension under section 7 is to be increased
under this paragraph if the amount of any state pension that has priority is
equal to or higher than the full rate of the state pension.

(2) 10If at any time an order under section 151A of the Administration Act comes
into force, the rate of the person’s state pension under section 7 is increased
(at that time) by the percentage specified in the order.

Section 9

SCHEDULE 5 Survivor’s pension under section 9: inherited deferral amount

15Introduction

1 This Schedule—

(a) sets out the circumstances in which a person (the “pensioner”) is
entitled to an inherited deferral amount for the purpose of section 9,
and

(b) 20determines that amount.

Dead spouse or civil partner entitled to old state pension with deferral increase

2 (1) A pensioner whose spouse or civil partner has died is entitled to an inherited
deferral amount under this paragraph if—

(a) the spouse or civil partner was entitled to an old state pension with
25an increase under paragraph 1 or 2A of Schedule 5 to the
Contributions and Benefits Act, and

(b) the pensioner would, on reaching pensionable age or on the death of
the spouse or civil partner, have been entitled to an old state pension
if in the relevant provisions of the Contributions and Benefits Act: (i)
30the words “before 6 April 2016” were omitted, and (ii) any reference
to a bereavement allowance included a reference to bereavement
support payment under section 27 of this Act.

(2) The inherited deferral amount is equal to the amount by which the weekly
rate of the old state pension for the pensioner would have been increased
35under paragraph 4 of Schedule 5 to the Contributions and Benefits Act on
the day on which the pensioner became entitled to the inherited deferral
amount.

(3) For the purposes of calculating the amount of that increase, paragraph 4(1A)
of Schedule 5 to the Contributions and Benefits Act has effect as if after the
40words “apart from” (in each place) there were inserted “this paragraph and”.

Pensions BillPage 35

Dead spouse or civil partner’s entitlement to old state pension deferred at time of death

3 (1) A pensioner whose spouse or civil partner has died is entitled to an inherited
deferral amount under this paragraph if—

(a) the spouse or civil partner’s entitlement to an old state pension was
5deferred when he or she died, and

(b) the pensioner would, on reaching pensionable age or on the death of
the spouse or civil partner, have been entitled to an old state pension
if in the relevant provisions of the Contributions and Benefits Act: (i)
the words “before 6 April 2016” were omitted, and (ii) any reference
10to a bereavement allowance included a reference to bereavement
support payment under section 27 of this Act.

(2) The inherited deferral amount is equal to the amount by which the weekly
rate of the old state pension for the pensioner would have been increased
under paragraph 4 of Schedule 5 to the Contributions and Benefits Act on
15the day on which the pensioner became entitled to the inherited deferral
amount.

(3) For the purposes of calculating the amount of that increase—

(a) a pensioner who is not entitled to a choice under section 8 is to be
treated as having met the condition in paragraph 4(1)(c) of
20Schedule 5 to the Contributions and Benefits Act,

(b) a pensioner who has chosen under section 8 to be paid a state
pension under section 9 is to be treated as having met the condition
in paragraph 4(1)(b) of Schedule 5 to the Contributions and Benefits
Act, and

(c) 25paragraph 4(1A) of Schedule 5 to the Contributions and Benefits Act
has effect as if after the words “apart from” (in each place) there were
inserted “this paragraph and”.

(4) In this paragraph “deferred” has the meaning given by section 55(3) of the
Contributions and Benefits Act.

30“The relevant provisions” of the Contributions and Benefits Act

4 For the purposes of this Schedule “the relevant provisions” of the
Contributions and Benefits Act are those mentioned in section 8(9)(b).

Supplementary

5 When determining entitlement to, or calculating, an inherited deferral
35amount under this Schedule based on entitlement to an old state pension
ignore—

(a) any requirement to make a claim for that pension;

(b) any provision suspending payment of, or disqualifying a person
from receiving, any amount of that pension.

Pensions BillPage 36

Section 11

SCHEDULE 6 Reduced rate elections: effect on rate of section 4 pension

Introduction

1 This Schedule modifies the rules about the transitional rate of the state
5pension for a woman if a reduced rate election was in force in respect of her
at the beginning of the relevant 35-year period (and expressions used in this
paragraph have the same meaning as in section 11).

Increased transitional rate for woman married to person over pensionable age etc

2 (1) This paragraph applies to the woman if on reaching pensionable age—

(a) 10she is married to a person who has reached pensionable age, or

(b) she is in a civil partnership with a person who has reached that age.

(2) The transitional rate of the state pension for the woman is—

(a) the rate determined for her under section 5, or

(b) if higher, a weekly rate equal to the modified amount for her pre-
15commencement qualifying years alone.

(3) The modified amount for the woman’s pre-commencement qualifying years
alone is the amount that would be calculated under Schedule 1 for her pre-
commencement qualifying years alone if the basic pension in any
Category A retirement pension calculated for her for the purposes of
20paragraph 3 of that Schedule were equal to the basic Category B amount.

(4) “The basic Category B amount” is the amount specified in paragraph 5 of
Part 1 of Schedule 4 to the Contributions and Benefits Act on 6 April 2016.

(5) To find out what happens if the marriage or civil partnership comes to an
end, see paragraph 4.

25Increased transitional rate for widows or divorcees etc

3 (1) This paragraph applies to the woman if on reaching pensionable age she is
not married or in a civil partnership but she has been married or in a civil
partnership before.

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