House of Commons

Session 2003 - 04 Publications on the internet Other Bills before Parliament Arrangement of Clauses (Contents)

Age-Related Payments Bill

These notes refer to the Age-Related Payments Bill as introduced in the House of Commons on 22 April 2004 [Bill 92] AGE-RELATED PAYMENTS BILL EXPLANATORY NOTES INTRODUCTION 1.     These explanatory notes relate to the Age-Related Payments Bill. They have been prepared by the Department for Work and Pensions to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament. 2.     The notes should be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. Where a Clause or part of a Clause does not seem to require explanation or comment none is given. SUMMARY 3.     This Bill makes provision for the payment of a one-off lump sum of £100 or £50 to households with occupants who have attained the age of 70 no later than the end of the prescribed relevant week and who are ordinarily resident in Great Britain on any day in that week. The Bill also includes a regulation-making power to enable regulations to be made to cater for any future payments to people aged 60 or over, or a subset of that group. BACKGROUND TO THE BILL 4.     The Chancellor of the Exchequer announced the new payment in his 2004 Budget Statement on 17 March. 5.     The payment is a tax-free lump sum payment of £50 or £100 paid to households. It is not linked to the payment of any other social security payments or tax credits and is not to be regarded as income or capital for social security and tax credit purposes. It is anticipated that the payment is to be made with winter fuel payments, as both payments are to households and the bulk of the payments will be made automatically before the end of the calendar year. [Bill 92—EN]     53/3 OVERVIEW OF THE LEGISLATION 6.      Clauses 1-3 set out the entitlement conditions for the one-off payment for 2004. 7.     Clause 4 sets out the conditions under which an individual would be disqualified from receiving a payment. 8.     Clause 5 describes the procedure that will be applied for making the payment both where the Secretary of State holds sufficient data to determine entitlement to a payment without the need for a claim, and where he does not. 9.     Clause 6 provides for the payment to be disregarded for social security, tax credits and tax purposes. 10.     Clause 7 provides the Secretary of State with a regulation-making power by the affirmative procedure to make other future payments to people aged 60 and over. COMMENTARY ON CLAUSES Payments for 2004 Clause 1 - "Qualifying individual" and "relevant week" 11.     Clause 1 subsection (1) defines a qualifying individual as being anyone ordinarily resident in Great Britain and aged 70 or over during the relevant week. Subsection (2) defines the relevant week for which qualification applies for the purposes of the Act as the week beginning with Monday 20th September and ending with Sunday 26th September 2004. Clause 2 - Entitlement: basic cases 12.     Clause 2, subsections (1) and (2) set out the conditions under which a single person is eligible for (1) a £100, or (2) a £50 payment. Subsection (1) makes provision for £100 payments to a single person, who is the only qualifying person in the household or, regardless of who else is in the household, is in receipt of state pension credit. Subsection (2) makes provision for a £50 payment to a single person, who is not receiving state pension credit, and who is living with another qualifying person. 13.     Subsections (3) and (4) set out the conditions under which a member of a couple is eligible for (3) a £100, or (4) a £50 payment. Subsection (3) makes provision for £100 payments to a member of a couple when (a) the other member of the couple does not qualify for a payment or (b) either member of the couple is in receipt of an income-related benefit. Subsection (4) provides for £50 payments to each member of a couple who both qualify for a payment, when neither of them is in receipt of state pension credit. Subsection (5) makes the whole of Clause 2 subject to the conditions set out in Clause 3. Clause 3 - Entitlement: special cases 14.     Clause 3, subsection (1) prescribes that where two (or more) couples live in the same household and one member of each couple would qualify for a payment, if neither couple is in receipt of an income-related benefit, then each qualifying member of those couples will be entitled to a £50 payment. 15.     Subsection (2) makes provision for (a) the payment for a couple who would both qualify for a payment, and are in receipt of an income-related benefit, to be made to the partner who receives the Social Fund Winter Fuel Payment and (b) removes entitlement to a payment for the other member of the couple. 16.     Subsection (3) transfers entitlement to a payment from one member of a couple to the other where that is necessary in order to ensure that the payment is made to the member of the couple who is to receive the winter fuel payment. 17.     Subsections (4) and (5) apply to people who are in a care home during the relevant week, and for whom the care home was their ordinary place of residence for the 12 weeks prior to the relevant week. Subsection (5) makes provision, where an individual meets the conditions in (4), for (a) a £50 entitlement where that individual is not in receipt of state pension credit in the relevant week and (b) no entitlement where the individual is in receipt of state pension credit in the relevant week. Subsection (6) provides that the member of a couple in a care home is to be treated as not qualifying for a payment when determining the entitlement or otherwise of the other member of that couple. Clause 4 - Disqualification 18.     Clause 4, subsection (1) prescribes the conditions under which individuals who would otherwise qualify for a payment will be disqualified from receiving a payment. These are (a) receiving free in-patient hospital treatment continuously for 52 weeks including the relevant week (b) being held in custody throughout the relevant week (c) being subject to immigration control throughout the relevant week. 19.     Subsection (3) provides for the disqualified member of a couple to be treated as not qualifying for a payment when determining the entitlement or otherwise of the other member of that couple. Clause 5 - Procedure 20.     Clause 5, subsection (1) makes provision for the Secretary of State to make payments before 31 December 2004 without requiring a claim, where he has sufficient information to determine entitlement. 21.     Subsection (2) allows claims to be made when a qualified person has not automatically received a payment before 31 December 2004 and subsection (3) prescribes in (a) (c) and (d) how, and in (b) by when the claim must be made and subsection (4) makes provision for payments to be made when valid claims are made. 22.      Subsection (5) applies the provisions of Chapter II of Part I of the Social Security Act 1998 (c.14) which provides, inter alia, for an individual to appeal against a decision and for the Secretary of State to revise decisions. Clause 6 - Payment to be disregarded for tax and social security Future Payments Clause 7 - Power to provide for payments 23.     Clause 7, subsection (1) enables the Secretary of State to make regulations to make payments to people aged 60 or over. Subsection (2)(a) allows for payments to be made to any subset of the specified group and (b) in specified circumstances 24.     Subsection (3)(a) provides that Regulations made under subsection (1) may make provision for future payments to be made once, or for a specified period, or at specified times, (b) make provision for exceptions, (c) make provision for any condition in social security legislation to be applied to any payment made by regulation made under this power, and (d) make provision for different treatment in defined circumstances. 25.     Subsection (4) specifies that Regulations made under this power will be by statutory instrument, subject to affirmative procedures in both Houses. 26.     Subsection (5) amends section 170(5) of the Social Security Administration Act 1992 (c. 5) (Social Security Advisory Committee) to include regulations made under this power to be within the remit of the Social Security Advisory Committee. Clause 8 - Interpretation Clause 9 - Money Clause 10 - Extent Clause 11 - Citation FINANCIAL EFFECTS OF THE BILL 27.     The cost of making the one-off payment to households with a qualifying person aged 70 and over is about £475 million. The administrative costs of making the payment are about £6.8 million. SUMMARY OF THE REGULATORY APPRAISAL 28.     A Regulatory Impact Assessment has not been carried out for this Bill. The proposals are expected to have no effect on business. EUROPEAN CONVENTION ON HUMAN RIGHTS 29.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of the Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). 30.     In most cases the payment will be made automatically and no claim will be required. Should a person not receive a payment or need to claim, or contest a decision on the payment, full Article 6 - right to a fair trial - compliant appeal rights will be available. 31.     The requirements of Article 8 - right to family life - will be met as the information-related provisions are necessarily linked and proportionate to determining eligibility and making the payment. 32.     The requirements of Article 14 - discrimination. The setting of age 70 for entitlement is justified on the grounds that members of this age group are less likely to be in work, have less money and have fixed incomes. 33.     The Secretary of State for Work and Pensions has made the following statement: "In my view the provisions of the Age-Related Payments Bill are compatible with the Convention rights." COMMENCEMENT 34.     Early commencement of the provisions for the 2004 payment is intended.