Pensions Bill (HL Bill 55)

(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
amount equal to the appropriate percentage of the excess.

(4) In sub-paragraph (3)—

• 5“the appropriate percentage” means the percentage specified in the
  order, and

• “the excess” means the amount by which the transitional rate exceeded
  the full rate immediately before the order came into force.

Section 7

SCHEDULE 3 10Survivor’s pension under section 7: inherited amount

Introduction

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) 15determines that amount.

Dead 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
20April 2016,

(b) the 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
25entitled to a Category B retirement pension under section 48B(4)
or (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
30pensioner reached pensionable age if any element of the rate attributable to
the 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
35April 2016,

(b) the 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) 40the pensioner would, on reaching pensionable age, have been
entitled 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 29 of this Act.

(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
5pensioner reached pensionable age if section 48BB(8) and (9) of the
Contributions and Benefits Act were ignored.

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
10April 2016,

(b) the 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) 15the pensioner would, when the spouse or civil partner died, have
been 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
20retirement pension would have been payable on the day on which the
spouse 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
25amount under this paragraph if—

(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) 30the spouse or civil partner was, immediately before his or her death,
entitled 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
35state pension immediately before the death.

6 (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) 40the pensioner was under pensionable age when the spouse or civil
partner 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) 45the pensioner did not marry or form a civil partnership after the
death 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) 5A 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 over pensionable age when the spouse or civil
10partner died,

(c) the 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) 15that transitional rate would have 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 would have exceeded the full
rate of the state pension if he or she had reached pensionable age on the day
20of the death.

8 (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) 25the pensioner was under pensionable age when the spouse or civil
partner 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) 30the spouse or civil partner would have been entitled to a state
pension 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) 35the pensioner did not marry or form a civil partnership after the
death 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
40day as the pensioner.

Supplementary

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) 45any 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.

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—

• “the appropriate percentage”—

  (a)

  40in sub-paragraph (2), means the percentage by which the full
  rate is increased;

  (b)

  in sub-paragraph (3), means the percentage specified in the
  order;

Pensions BillPage 34

• “the excess” means the amount by which 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;

• “the shortfall” means the amount by which the amount of any state
  5pension that has priority is less than the full rate.

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 29 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”.

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 29 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.

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.

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

(a) 30the rate determined for her under section 5, or

(b) if higher, a weekly rate equal to the modified amount for her pre-
commencement 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-
35commencement qualifying years alone if the basic pension in any
Category A retirement pension calculated for her for the purposes of
paragraph 3 of that Schedule were equal to the full amount of the basic
pension.

(4) “The full amount of the basic pension” is the amount of the basic pension
40specified in section 44(4) of the Contributions and Benefits Act on 6 April
2016.

Recalculation of transitional rate where circumstances change

4 If the woman is married or in a civil partnership on reaching pensionable age
but the marriage or civil partnership comes to an end (because of the death
of her spouse or civil partner or otherwise)—

(a) 5her transitional rate is to be recalculated applying paragraph 3(2),
and

(b) Schedule 2 (up-rating) applies as if the recalculated rate had been the
woman’s transitional rate on the day on which she reached
pensionable age.

5 (1) 10If neither of paragraphs 2 and 3 apply to the woman but she subsequently
comes within paragraph (a) or (b) of paragraph 2(1)—

(a) her transitional rate is to be recalculated applying paragraph 2(2),
and

(b) Schedule 2 (up-rating) applies as if the recalculated rate had been the
15woman’s transitional rate on the day on which she reached
pensionable age.

(2) But the woman’s rate is not to be recalculated under sub-paragraph (1) if it
has already been recalculated under paragraph 4.

6 Nothing in paragraph 4 or 5 affects—

(a) 20the amount of state pension to which a woman is entitled for periods
before that paragraph applies to her, or

(b) the amount of any increase under section 17 in a case where the
period for which the woman’s state pension is deferred has ended
before that paragraph applies to her.

Section 12

25SCHEDULE 7 Reduced rate elections: basic amount of state pension under section 12

1 This Schedule—

(a) sets out the circumstances in which a woman is entitled to a basic
amount for the purpose of section 12, and

(b) 30determines that basic amount.

2 (1) A woman is entitled to a basic amount under this paragraph if she has
reached pensionable age and—

(a) she 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) 35The basic amount is the amount specified in paragraph 5 of Part 1 of
Schedule 4 to the Contributions and Benefits Act on the day on which the
woman became entitled under this paragraph.

3 (1) A woman is entitled to a basic amount under this paragraph if—

(a) on reaching pensionable age she is not married or in a civil
40partnership but she has been married or in a civil partnership before,
or

(b) on reaching pensionable age she was married or in a civil
partnership and the marriage or civil partnership has come to an end
(because of the death of her spouse or civil partner or otherwise).

(2) The basic amount is the amount of the basic pension specified in
5section 44(4) of the Contributions and Benefits Act on the day on which the
woman became entitled under this paragraph.

4 A woman who is entitled to a basic amount under paragraph 3 is not entitled
to a basic amount under paragraph 2.

Section 13

SCHEDULE 8 10Pension sharing: appropriate weekly rate under section 13

Introduction

1 This Schedule sets out the appropriate weekly rate of a person’s state
pension under section 13.

Appropriate weekly rate for pensioner with old state scheme pension credit

2 (1) 15This paragraph sets out the appropriate weekly rate if the person is entitled
to a state pension under section 13 because of an old state scheme pension
credit.

(2) If the person became entitled to the old state scheme pension credit in or
after the final relevant year, the appropriate weekly rate is a weekly rate
20equal to the person’s notional rate.

(3) If the person became entitled to the old state scheme pension credit before
the final relevant year, the appropriate weekly rate is a weekly rate equal to
the person’s notional rate multiplied by the appropriate revaluation
percentage.

(4) 25For the purposes of sub-paragraphs (2) and (3), a person’s “notional rate” is
the weekly rate of a notional pension under section 13 the cash equivalent of
which would, on the valuation day, have been equal to the amount of the old
state scheme pension credit.

(5) For the purposes of sub-paragraph (4) assume that the notional pension
30becomes payable on the later of—

(a) the day on which the person reaches pensionable age, and

(b) the valuation day.

(6) The “appropriate revaluation percentage” is the percentage specified, in
relation to earnings factors for the tax year in which the person became
35entitled to the old state scheme pension credit, by the last order under
section 148 of the Administration Act to come into force before the end of the
final relevant year.

(7) In this paragraph—

• “final relevant year” means the tax year immediately before that in
  40which the person reaches pensionable age;

Pensions BillPage 39

• “valuation day” means the day on which the person became entitled to
  the old state scheme pension credit.

Appropriate weekly rate for pensioner with new state scheme pension credit

3 (1) This paragraph sets out the appropriate weekly rate if the person is entitled
5to a state pension under section 13 because of a new state scheme pension
credit.

(2) If the person was over pensionable age when he or she became entitled to the
new state scheme pension credit, the appropriate weekly rate is a weekly
rate equal to the amount of the credit.

(3) 10If the person was under pensionable age when he or she became entitled to
the new state scheme pension credit, the appropriate weekly rate is a weekly
rate equal to the amount of the credit multiplied by the appropriate
revaluation percentage.

(4) The “appropriate revaluation percentage” is the percentage specified, in
15relation to the tax year in which the person became entitled to the new state
scheme pension credit, by the last order under section 148AD of the
Administration Act to come into force before the person reached
pensionable age.

Supplementary

4 (1) 20Regulations may make provision about the calculation and verification of
notional rates under paragraph 2.

(2) The regulations may, in particular, provide—

(a) for calculation or verification in such manner as may be approved by
or on behalf of the Government Actuary, or

(b) 25for things done under the regulations to be required to be done in
accordance with guidance from time to time prepared by a person
specified in the regulations.

Section 13

SCHEDULE 9 Pension sharing: up-rating state pension under section 13

30Introduction

1 This Schedule sets out how to up-rate the rate of a person’s state pension
under section 13.

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

(a) 35ignoring any reduction under section 7(4) (in the case of a state
pension under section 7),

(b) taking 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.