 House of Commons |
Session 1997-98 Internet Publications Other Bills before Parliament Arrangement of Clauses (Contents) |
| Social Security Bill
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| EXPLANATORY AND FINANCIAL MEMORANDUM | |
| The Bill makes provision for simplification of decision-making and appeals in social security, child support and vaccine damage payments; changes National Insurance provision to improve compliance, reduce avoidance and increase revenue; simplifies the award and review of Social Fund budgeting loans; permits the removal of the lone parent element of child benefit; and restricts entitlement in repect of the period before a claim. It also makes various related provision. | |
| PART I | |
| DECISIONS AND APPEALS | |
| CHAPTER I: GENERAL
Decisions
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| Clause 1 provides that decisions about benefit claims, child support assessments and the discretionary social fund currently made by adjudication officers, social fund officers and child support officers, will in future be undertaken by the Secretary of State. It defines the legislation under which these functions are currently exercised. | |
| Clause 2 provides that decisions, determinations or assessments falling to be made by the Secretary of State under certain relevant enactments may be made not only by officers acting under her authority (ie civil servants) but also by computers for which they are responsible. It also provides that decisions, determinations or assessments that may be made by persons providing services to the Secretary of State may be made by computers for whose operation such persons are responsible. | |
| The relevant enactments cover social security, child support and jobseeker's allowance. The clause also applies to war pensions. | |
| Clause 3 provides that information relating to social security, child support or war pensions which is held by the Secretary of State, Northern Ireland Department or by persons providing services to either of them, may be used and shared between them for any of those purposes. This will enable such information to be transmitted automatically across the Department's main business areas (including the Department for Education and Employment in respect of its functions relating to jobseeker's allowance). | |
| The clause also provides that the information which may be shared by the Department and local authorities administering housing benefit and council tax benefit includes information about child support and war pensions, although the passing of such information to local authorities will be limited to use in relation to their housing benefit and council tax benefit functions.
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| Clause 4 transfers to unified appeal tribunals the functions of social security appeal tribunals, medical appeal tribunals, disability appeal tribunals, child support appeal tribunals and vaccine damage tribunals. This means that appeals on decisions to which there is a right of appeal under Clause 13 of this Bill or under section 20 (as substituted by Clause 42) of the Child Support Act 1991 or under section 4 (as substituted by Clause 46) of the Vaccine Damage Payments Act 1979 will be decided by the unified appeal tribunals. | |
| Clause 5 provides for the appointment by the Lord Chancellor, after consultation with the Lord Advocate, of a President of appeal tribunals and specifies the qualification requirements of the office. It replaces sections 51(1) and (2) of the Social Security Administration Act 1992 which deals with manner of appointment and qualifications. | |
| Clause 6 requires the Lord Chancellor to constitute a panel, of such persons as he thinks fit, to act as members of appeal tribunals. The Lord Chancellor must consult the Chief Medical Officer before appointing medical practitioners to the panel. The panel must include persons with qualifications prescribed in regulations made by the Secretary of State, with the concurrence of the Lord Chancellor. The persons on the panel replace the legally- qualified chairman, appointed by the Lord Chancellor, and the members, appointed by the President, of the existing appeal tribunals. This clause applies to England and Wales. | |
| Clause 7 defines how appeal tribunals should be established in Scotland. It requires the Lord Advocate to constitute a panel of persons for Scotland and replicates the provisions of Clause 6 for Scotland. | |
| Clause 8 details how appeal tribunals should be constituted. It replaces the existing requirement in the Social Security Administration Act (sections 41, 43 and 50) and the Child Support Act 1991 (Schedule 3) whereby three-person tribunals hear all appeals, with an arrangement whereby an appeal tribunal may consist of one, two or three members of a panel. The clause sets out arrangements for majority voting and for the appointment of experts to assist the panel in appropriate cases. It also gives effect to Schedule 1 of the Bill which contains supplementary provisions relating to members of tribunals and experts. | |
| CHAPTER II: SOCIAL SECURITY DECISIONS AND APPEALS
Decisions | |
| Clause 9 provides that decisions on benefit claims and on social fund and contribution issues will be made by the Secretary of State. It defines relevant benefits and relevant enactments to which these arrangements will apply. | |
| Clause 10 gives the Secretary of State the power to revise a decision of hers made under Clause 9 either upon application or at her own instigation. It allows regulations to specify the cases, circumstances and period within which decision can be revised and to provide for procedural matters. The clause specifies that unheard appeals against decisions which are revised shall lapse unless regulations otherwise provide. It also sets out arrangements for the date from which the decision takes effect. The Secretary of State need only consider the particular issue which gave rise to the need to revise an earlier decision. | |
| Clause 11 gives the Secretary of State power to make a decision which supersedes one made under Clauses 9 and 10 of this Bill, other than discretionary Social Fund decisions, or one made by an appeal tribunal or Commissioner. A new decision may be made in response to an application or at the Secretary of State's own initiative. | |
| The clause permits the superseding decision to take effect on the day it is made, or the date the application is made. There is also a power to prescribe cases or circumstances where another date may be used. The Secretary of State need only consider the particular issue which gave rise to the need to supersede an earlier decision. | |
| Clause 12 provides for regulations to be made in relation to decisions; and a power to allow the Secretary of State to obtain advice from appropriate sources. This will permit advice to be obtained from, for example, experts such as accountants, solicitors, and medical practitioners.
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| Clause 13 sets out what may be appealed, by whom, when and how. It requires that a person who has a right of appeal shall be notified of that fact and provides relevant regulation-making powers. | |
| Clause 14 enables cases to be re-heard by appeal tribunals (without the need for an appeal to the Commissioner) where they have made an error of law or where the parties to an appeal agree the tribunal have made an error in law. | |
| Clause 15 sets out the powers of the Commissioner and who may appeal to the Commissioner, on what, when and how. There is a new provision to allow cases to be sent back to a tribunal (without a hearing) where the parties to the appeal agree that the tribunal decision was wrong. | |
| Clause 16 sets out the rights of appeal from the Commissioner - what may be appealed, by whom and how. Appeals may be made to the appropriate court in England and Wales, Scotland or Northern Ireland.
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| Clause 17 provides for regulations to set out the procedures to be followed as specified in Schedule 5 to the Act. It also provides for Commissioners to have the assistance of specialists in cases of special difficulty of fact; for tribunals of three Commissioners where there is a question of law of special difficulty; and for the application, in proceedings to determine whether a person is liable to pay Class 1A national insurance contributions, of the privilege against self-incrimination (and incrimination of the spouse) to all witnesses other than that person. | |
| Clause 18 re-enacts existing legislation (subsection (1) of section 60 of the Social Security Administration Act 1992) on the finality of decisions, so that once a decision is made, it can only be altered where a case is appealed, revised or superseded. It also reverses section 60(2) of that Act, so that findings of fact or other determinations may be conclusive for further decisions. | |
| Clause 19 re-enacts (with appropriate changes to reflect changes made by this Bill) section 61 of the Administration Act 1992, with respect to matters arising whilst a decision is pending and to those matters arising out of a revision of or appeal from a decision. Subsections 61(2) and 61(4) of the Act are not included, since they are covered respectively in Clauses 9,10 and 11 of this Bill.
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| Clause 20 re-enacts current provisions in section 54 of the Social Security Administration Act 1992 with the necessary changes to reflect the transfer of the functions of the Adjudication Officer to the Secretary of State. This provides for claimants to be referred for medical examination; it also sets out arrangements for the obtaining of information and permits an adverse decision to be made where a person fails without good cause to submit to a medical examination. | |
| Clause 21 enables the appeal tribunal to refer cases to a medical practitioner for examination. It also prevents the tribunal itself from physically examining or testing the claimant other than in prescribed circumstances.
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| Clause 22 allows regulations to be made which will permit the Secretary of State to suspend payment of benefit where entitlement is in doubt, pending resolution of a query or appeal. | |
| Clause 23 allows regulations to be made to permit temporary non-payment of benefit, where claimants have not provided information required for a determination whether a decision on an award for benefit should be revised or superseded. In circumstances to be prescribed benefit may be suspended or terminated where the person has failed to provide the information asked for. | |
| Clause 24 allows for regulations to be made to enable the Secretary of State to require persons to submit for medical examination in prescribed circumstances and to suspend benefit if such a person fails to do so.
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| Clause 25 allows the Secretary of State to hold back cases or make partial decisions where a case turns on an issue to be determined by the Courts in another case. | |
| Clause 26 allows the Secretary of State to stay appeal cases where a case turns on an issue to be determined by the Courts in another case. An appeal tribunal or Commissioner may, as an alternative to staying an appeal, determine it as though the issue had been determined in the way which is most unfavourable to the person whose appeal would otherwise be stayed.
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| Clause 27 provides that, where the outcome of an appeal is that decisions in other cases are wrong, restrictions may be imposed on arrears which would otherwise fall to be paid. It defines certain key terms. | |
| Clause 28 permits regulations to be made defining circumstances in which accidental errors in decisions may be corrected, and setting aside decisions in specified cases of procedural irregularity. | |
| Clause 29 re-enacts current provisions in section 44 of the Social Security Administration Act 1992 with appropriate changes to reflect changes made by this Bill. This clause provides for the declaration that a person has suffered an industrial accident, whether or not there has been a claim to benefit and whether or not a claim would have any prospects of success on other grounds. It also permits a declaration to be refused, if it is unlikely to be necessary to decide if there has been an industrial accident for the purposes of any claim for benefit; and provides that a declaration is conclusive for the purposes of later claims to industrial injuries benefit. | |
| Clause 30 re-enacts current provisions in section 60(3) of the Social Security Administration Act 1992 with amendments to take account of the abolition of the adjudicating medical practitioner and the medical appeal tribunal by this Bill. It provides that a decision that an accident was an industrial accident does not require the Secretary of State to find that the claimant suffered personal injury as a result of that accident. It also permits the Secretary of State to refuse to decide that there has been an industrial accident where she does not think that a claim to benefit is likely to arise. | |
| Clause 31 replaces the powers in section 61A of the Social Security Administration Act 1992. Regulations may provide for a decision on incapacity for work to be effective for such purposes as may be prescribed in the regulations. | |
| Clause 32 replaces section 62 of the Social Security Administration Act 1992. It provides for the provisions in Clauses 9 to 39 (modified or added to, as appropriate, by regulations) to apply to decisions made under sections 108 to 110 of the Social Security Contributions and Benefits Act 1992 which concern the award of benefit for prescribed diseases. It also allows for regulations to govern the medical examination fee system. | |
| Clause 33 replaces section 67 of the Social Security Administration Act 1992 which lays down the procedure for entitlement to a Christmas bonus.
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| Clause 34 re-enacts section 63 of the Social Security Administration Act 1992. In respect of housing benefit and council tax benefit regulations shall require local authorities to notify determinations (in such form as may be prescribed) and shall provide for reviews of such determinations. Regulations may provide that priority be given to claims for those benefits from people who are entitled to jobseeker's allowance or income support. | |
| Clause 35 allows regulations to be made which will permit the authority to suspend payment of housing benefit and council tax benefit in prescribed circumstances, particularly where entitlement is in doubt, pending resolution of a query or appeal.
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| Clause 36 provides for discretionary Social Fund decisions to be made by appropriate officers of the Secretary of State and also allows the Secretary of State to nominate appropriate officers who may issue guidance to other officers on behalf of the Secretary of State. | |
| Clause 37 re-enacts the provisions in section 65 of the Social Security Act 1992 relating to the appointment of the social fund Commissioner and Social Fund inspectors. | |
| Clause 38 provides the system whereby discretionary social fund decisions may be reviewed. It re-enacts section 66 of the Social Security Administration Act 1992 with a modification relating to the review of budgeting loan decisions. | |
| Clause 39 defines certain terms used in Chapter II and repeals Part II of the Social Security Administration Act 1992. | |
| CHAPTER III: OTHER DECISION AND APPEALS
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| Clause 40 mirrors Clause 10 for child support decisions, by setting out the circumstances in which decisions made by the Secretary of State under sections 11,12, or 17 of the Child Support Act can be revised. It replaces section 16 of the Child Support Act. | |
| Clause 41 mirrors Clause 11 by setting out the circumstances in which decisions made by the Secretary of State under sections 11 or 12 of the Child Support Act, whether or not revised under Clause 16 of this Bill, may be superseded. Decisions made by a Child Support Commissioner or appeal tribunal may also be superseded by a decision of the Secretary of State. | |
| Clause 42 provides for child support decisions to be appealed to an appeal tribunal. This was previously covered by section 20 of the Child Support Act 1991. | |
| Clause 43 inserts into the Child Support Act 1991 new sections 28ZA and 28ZB allowing cases to be held back pending resolution of a lead case. It replicates the provisions in Clauses 25 and 26 for child support purposes. | |
| Clause 44 inserts into the Child Support Act 1991 new sections 28ZC and 28ZD relating to limitation of the effects and correction of decisions in certain cases of error. It replicates the provisions in Clauses 27 and 28.
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| Clause 45 inserts into the Vaccine Damage Payments Act 1979 a section (reflecting Clause 11 of this Bill) allowing for decisions of the Secretary of State and the appeal tribunal to be superseded in prescribed circumstances. It includes powers for regulations to govern the procedures for superseding decisions, governs recovery of payments, and defines "appeal tribunal" as a tribunal constituted under this Bill. | |
| Clause 46 replaces section 4 of the Vaccine Damage Payments Act 1979 to make provision for appeals to appeal tribunals against decisions of the Secretary of State made under Section 3 or 3A of that Act. The clause also permits regulations to be made to provide for the manner in which and time within which appeals are to be brought. | |
| Clause 47 inserts a new section 7A into the Vaccine Damage Payments Act 1979 to make provision for correcting errors and setting aside decisions. It replicates the provisions in Clause 28. | |
| PART II | |
| CONTRIBUTIONS | |
| Clause 48 allows regulations to be made enabling directors (including former directors) and companies payment of contributions on account. Regulations may also require for certain purposes for such payments to be treated as contributions. Nothing in Clause 48 removes a director's annual national insurance liability. | |
| Clause 49 provides for the payment in a non-cash form for a restrictive undertaking to be treated as earnings for National Insurance contributions. This measure will apply to undertakings given or paid for on or after 10th July 1997. | |
| Clause 50 provides that whoever would normally be liable for secondary Class 1 contributions is liable for payment of Class 1A secondary contributions in circumstances where there is no remuneration and a car is the only benefit made available to an employee. | |
| Clause 51 provides for a new class of contribution, Class 1B. Liability for this Class of contribution arises where a person is accountable to the Inland Revenue for payment of income tax on emoluments of employees, in accordance with a PAYE settlement agreement. The contribution is payable on, and calculated from, the amount of any emoluments included in the settlement agreement for the purpose of charging tax, and the amount of tax for which the person is accountable in respect of the settlement agreement. Class 1 contributions due in respect of emoluments paid before a settlement is agreed are not to be included in the settlement agreement and regulations may prescribe circumstances where persons are to be excepted from Class 1B. | |
| Clause 52 provides for contributions which are paid by or for an earner in error because earner is not in fact an employed earner. Where such contributions are paid in a period falling in the 1998-99 tax year or any subsequent tax year, after the end of the tax year following the one in which they were paid, they may be treated, except in prescribed circumstances, as if there were no error. | |
| Clause 53 allows regulations to provide for the Secretary of State as well as the Inland Revenue to impose penalties where a person making a return, fraudulently or negligently fails to provide any required information or provides incorrect information. Regulations will prescribe the rate of the penalty and how it is to be ascertained; time limits for imposing it; how to determine the date it is incurred; how it is to be enforced; and provide for the Secretary of State, at her discretion, to remit or mitigate penalties or stay or compound proceedings. | |
| Clause 54 enables regulations to prescribe circumstances in which contributions are to be paid to and collected directly by the Secretary of State, rather than by the Inland Revenue as her agent. It also provides for regulations to set out the requirements for making these payments and to impose interest and penalties where the requirements are not met. Regulations will also prescribe circumstances where payment is not required; the rate of the penalty and how it is to be ascertained; time limits for imposing it; how to determine the date it is incurred; how it is to be enforced; and provide for the Secretary of State, at her discretion, to remit or mitigate penalties or stay or compound proceedings. It also provides for interest or penalties to be charged for a period prior to the passing of the Act where the Inland Revenue could have done so. | |
| Clause 55 provides that the powers of the Inland Revenue and of the Secretary of State as to interest and penalties are mutually exclusive. | |
| Clause 56 amends Schedule 2 to the Contributions and Benefits Act 1992 to take account of amendments and repeals of tax legislation which apply to the assessment of Class 4 contributions; specifically section 140 of the Capital Allowance 1990 Act; section 383 of the Income and Corporation Taxes Act 1988; and section 88 of the Taxes Management Act 1970. It also amends the provision which allows a joint assessment of contributions for partnerships.
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| Clause 57 provides that regulations made under section 5 of the Social Security Administration Act may require a person to provide any information or evidence, in connection with the award of benefit to which that section applies, for the purpose of determining whether conditions of entitlement are satisfied. | |
| Clause 58 replaces the current criminal offence for a breach of regulations relating to National Insurance contributions with a new civil penalty as prescribed in regulations. | |
| Clause 59 introduces a new criminal offence of fraudulent evasion and being knowingly involved in fraudulent evasion of contributions. The new offence is triable either summarily or on indictment; when it is tried summarily the maximum fine will be level 5 on the standard scale (£5000); when it is tried on indictment the maximum penalty will be seven years imprisonment and/or an unlimited fine. It also introduces a civil penalty for those who fail to pay contributions within a prescribed time limit and removes the requirement to prove the failure to make payment of any particular contribution. Regulations will prescribe the amount of the penalty or how it is to be ascertained and time limits for imposing it. Regulations will also provide for determining the date the penalty is incurred; how it is to be enforced; and provide for the Secretary of State, at her discretion, to remit or mitigate penalties or stay or compound proceedings. The penalty will not apply where a person has a criminal conviction for the same offence or to Class 4 contributions recoverable by the Revenue. | |
| Clause 60 broadens existing evidence arrangements to provide that the certificate of an officer appointed by the Secretary of State, confirming non-payment of contributions, interest or penalty, may be provided to a court as evidence of non-payment of debt. | |
| Clause 61 provides in England and Wales for distraint action to be taken where a person served with a certificate confirming debt, fails to make payment within thirty days. A magistrate's warrant is required for forced entry onto premises and, where necessary, the assistance of a constable may also be secured. Any goods distrained will be held for a period of five days before being sold by public auction. After recovery of the debt and the costs and charges of distraint, the balance of the proceeds of sale, if any, is to be paid to the debtor. It also provides for poinding action in Scotland where a person served with a certificate confirming debt fails to make payment after 30 days. A sheriff's summary warrant is required for recovery by poinding and sale, earnings arrestment or an arrestment and action of forthcoming or sale. Applications must be accompanied by the certificate of debt and a certificate stating that the certificate of debt was served on the person in question and that the debt remains unpaid. Warrants issued must be in the form prescribed. The sheriff's fees and other necessary outlays may be included in the charges. The debtor cannot be charged for collection of sums paid in respect of the amount owing. | |
| Clause 62 provides for the Secretary of State to alter the percentage level of Class 1B contributions and limits any increase to 2 per cent. above the level for the previous tax year. | |
| Clause 63 provides that, in relation to an office holder who is paid from the Consolidated Fund, any Class 1A National Insurance contributions shall also be paid from the Consolidated Fund. | |
| PART III | |
| BENEFITS
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| Clause 64 changes the Maternity Allowance payment period. It provides for the daily rate of Maternity Allowance to be one-seventh of the weekly rate, thereby bringing it into line with other benefits. | |
| Clause 65 amends section 44(4) of the Social Security Contributions and Benefits Act 1992 to provide for the higher rate of short-term Incapacity Benefit paid to people over pension age to be increased to a rate equivalent to the standard rate of Retirement Pension. A pensioner receiving Incapacity Benefit may pay tax, and receive a rate of benefit which reflects a past reduction in lieu of taxation. Extra-statutory payments are currently made to pensioners to make up the difference between the two rates. The clause puts this arrangement on a statutory basis. | |
| Clause 66 provides for payments of prescribed amounts to be made out of the social fund for maternity and funeral expenses and for payments of community care grants, crisis and budgeting loans to be made out of the fund in respect of other specified needs. | |
| Clause 67 provides that decisions relating to the award of budgeting loans out of the social fund will be made having regard only to the applicant's personal circumstances and existing criteria other than all the circumstances of the case and the nature, extent and urgency of the need. Budgeting loans may also be awarded where other criteria are met which are specified in directions issued by the Secretary of State. | |
| Clause 68 authorises regulations to bring the rate of Child Benefit for lone parents down to the rate for other parents. The clause also removes any requirement for reference to the Social Security Advisory Committee of any such regulations made within three months of Royal Assent. | |
| Clause 69 permits women who have recently received Maternity Allowance to receive Statutory Sick Pay from their employer if they fall sick within 57 days of their return from maternity leave, rather than Incapacity Benefit which is paid at a lower rate. This change removes the difference of treatment between women who have received Statutory Maternity Pay and women who have received Maternity Allowance.
Amendments of Administration Act | |
| Clause 70 provides that, where a person is required to make a claim for benefit (or be treated as a making such a claim) in order to be entitled, entitlement for a past period shall be restricted to one month unless regulations provide otherwise. | |
| Clause 71 allows overpayments out of the discretionary Social Fund to be recovered provided that, in the case where a claimant has money to which he is not entitled as a result of a misrepresentation or failure to disclose, there has been a determination to that effect. | |
| Clause 72 allows rates of awards of Retirement Pension or Graduated Retirement Benefit to be expressed in terms of the rate which is relevant at the time the award is made or, where the Secretary of State (or someone acting on her behalf) announces that the rate will be increased in an Uprating Order with effect from a specified date, in terms of that increased rate from that date. | |
| PART IV | |
| SUPPLEMENTAL | |
| Clause 73 provides that regulations under the Bill are to be made by the Secretary of State with the exception of those (referred to in Clauses 15 and 16 of, and paragraph 5 of Schedule 4 to, the Bill) in connection with appeals to and from Commissioners (which are to be made by the Lord Chancellor); and that regulations are to be subject to annulment in pursuance of a resolution of either House of Parliament. It also makes provision as to how the regulation-making powers under the Bill may be exercised. | |
| Clause 74 makes financial provision for the purposes of the Bill. | |
| Clause 75 defines certain terms used in the Bill. | |
| Clause 76 provides that an Order in Council making provision for Northern Ireland for purposes corresponding to this Bill is to be subject annulment in pursuance of a resolution of either House of Parliament. | |
| Clause 77 gives effect to minor and consequential enactments in Schedule 6, and consequential repeals in Schedule 7. | |
| Clause 78 provides for the Act to be cited as the Social Security Act 1997; for most of the Bill to be brought into force on days appointed by order; for different parts of the Bill to be brought into force on different days and for orders to include transitional provision in relation to the commencement of the Bill. It specifies which parts of the Bill do not extend to Northern Ireland and those which do extend to the Isle of Man. | |
| Schedule 1 supplements provisions in Clause 5 relating to the tenure of the office of President of appeal tribunals and the remuneration, staff and functions of the President. It also supplements Clause 8 by providing for payment of tribunal members and experts and for payment of expenses to those required to attend proceedings or to attend for medical examination or treatment. | |
| Schedule 2 sets out those decisions, in relation to benefits and contributions, against which no appeal lies. | |
| Schedule 3 supplements Clause 13 by setting out certain decisions against which an appeal lies. | |
| Schedule 4 re-enacts, with minor amendment, sections 52 and 58(6) and (7) and provisions in paragraphs 1, 6 and 8 of Schedule 2 to the Social Security Administration Act 1992 relating to Social Security Commissioners (in particular their appointment, remuneration and tenure of office). | |
| Schedule 5 replaces Schedule 3 to the Social Security Administration Act 1992 and provides for regulations on procedure for appeals to an appeal tribunal or a Commissioner or a tribunal of Commissioners. | |
| Financial effects of the Bill | |
| The main financial consequence of Part I of the Bill will be administrative savings for the Department of Social Security, arising from the proposals to simplify benefit processing which support the introduction of new information technology. These administrative savings are expected to rise to a total of £50 million per annum over the longer-term. | |
| Clauses 22 and 35 are designed to protect public funds. Savings will depend on the extent of legal challenge in any particular instance. | |
| Part II, Clauses 48 to 63 will affect revenue to the National Insurance Fund and administrative expenditure. Clause 49 is estimated to produce additional revenue for the Fund of between £20-30 million per annum. Clause 51 will have no measurable effect on the administrative costs of the Department of Social Security or of the Inland Revenue, but is estimated to provide additional revenue to the Fund amounting to around £10 million per year. Clauses 53, 54 and 55 could produce additional revenue initially of up to some £5-10 million a year. Though this figure should reduce considerably as compliance improves. There will be start-up costs of around £1.3 million in the first year, with annual administrative savings thereafter of around £4.3 million. Clause 61 will have start-up costs in the first year of around £1.7 million. Administrative savings are likely to be around £2 million per annum. | |
| In Part III, changes to Social Fund administration produce a range of financial implications. Clause 66 will result in development costs of around £1.5 million in 1997/98 £1.9 million in 1998/99. The steady-state, gross administrative savings from the change could reach £13 million per annum. Clause 38 subsections (4) and (7) (a) may save administration expenditure of around £2-3 million a year. | |
| Clause 68 will permit regulations to be laid which are estimated to produce annual benefit savings, net of the effect of income related benefits, which rise over time to a maximum of £45 million per annum, though the figure is expected to reduce to nil around 2013. However, the reduction in value of the savings is dependent on yearly decisions on benefit levels. First-year administrative start-up costs are estimated at £100,000 but once new arrangements are fully operational there will be annual administrative savings of around £1.3 million. | |
| Clause 69 may produce programme savings of up to £1 million. | |
| Clause 70 is expected to generate programme savings, net of the effect of income-related benefits and administrative costs, of around £57 million annually. | |
| Clause 72 will yield administrative savings estimated at about £2 million per annum. | |
| The remaining clauses are not expected to have any significant financial effect. | |
| The financial implications of the national insurance measures, except for Clause 63, relate to the National Insurance Fund, with the implications of all the other measures, including Clause 63 relating to the Consolidated Fund. | |
| Manpower implications | |
| Changes to decision making and appeals will enable improved information technology and consequently reduced user activity. This is likely to lead to a reduction in Department of Social Security staff of about 2,500 in the longer term. | |
| The automation of the Social Fund budgeting loan process is expected to reduce Department of Social Security staff by around 700 while changes to the lone parent element of Child Benefit for new cases is estimated to lead to a further reduction of 100 staff. | |
| Compliance cost assessment | |
| The cost to business of complying with the provisions of the Bill is estimated to be between £100,000 and £1 million per annum. | |
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| © Parliamentary copyright 1997 | Prepared 10 July 1997 |