Welfare Reform Bill

House of Commons

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Welfare Reform Bill

Welfare Reform Bill
Part 1 — Employment and support allowance
1

A
Bill
To
Make provision about social security; to amend the Vaccine Damage
Payments Act 1979; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Part 1
Employment and support allowance
Entitlement
1
Employment and support allowance
(1)
An allowance, to be known as an employment and support allowance, shall be
5
payable in accordance with the provisions of this Part.
(2)
Subject to the provisions of this Part, a claimant is entitled to an employment
and support allowance if he satisfies the basic conditions and either—
(a)
the first and the second conditions set out in Part 1 of Schedule 1
(conditions relating to national insurance) or the third condition set out
10
in that Part of that Schedule (condition relating to youth), or
(b)
the conditions set out in Part 2 of that Schedule (conditions relating to
financial position).
(3)
The basic conditions are that the claimant—
(a)
has limited capability for work,
15
(b)
is at least 16 years old,
(c)
has not reached pensionable age,
(d)
is in Great Britain,
(e)
is not entitled to income support, and
(f)
is not entitled to a jobseeker’s allowance (and is not a member of a
20
couple who are entitled to a joint-claim jobseeker’s allowance).

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Welfare Reform Bill
Part 1 — Employment and support allowance
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(4)
For the purposes of this Part, a person has limited capability for work if—
(a)
his capability for work is limited by his physical or mental condition,
and
(b)
the limitation is such that it is not reasonable to require him to work.
(5)
An employment and support allowance is payable in respect of a week.
5
(6)
In subsection (3)—
“joint-claim jobseeker’s allowance” means a jobseeker’s allowance
entitlement to which arises by virtue of section 1(2B) of the Jobseekers
Act 1995 (c. 18);
“pensionable age” has the meaning given by the rules in paragraph 1 of
10
Schedule 4 to the Pensions Act 1995 (c. 26).
(7)
In this Part—
“contributory allowance” means an employment and support allowance
entitlement to which is based on subsection (2)(a);
“income-related allowance” means an employment and support
15
allowance entitlement to which is based on subsection (2)(b).
2
Amount of contributory allowance
(1)
In the case of a contributory allowance, the amount payable in respect of a
claimant shall be calculated by—
(a)
taking such amount as may be prescribed,
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(b)
if in his case the conditions of entitlement to the support component or
the work-related activity component are satisfied, adding the amount
of that component, and
(c)
making prescribed deductions in respect of any payments to which
section 3 applies.
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(2)
The conditions of entitlement to the support component are—
(a)
that the assessment phase has ended,
(b)
that the claimant has limited capability for work-related activity, and
(c)
that such other conditions as may be prescribed are satisfied.
(3)
The conditions of entitlement to the work-related activity component are—
30
(a)
that the assessment phase has ended,
(b)
that the claimant does not have limited capability for work-related
activity, and
(c)
that such other conditions as may be prescribed are satisfied.
(4)
Regulations may—
35
(a)
prescribe circumstances in which paragraph (a) of subsection (2) or (3)
is not to apply;
(b)
prescribe circumstances in which entitlement under subsection (2) or
(3) is to be backdated;
(c)
make provision about the amount of the component under subsection
40
(2) or (3).
(5)
For the purposes of this Part, a person has limited capability for work-related
activity if—
(a)
his capability for work-related activity is limited by his physical or
mental condition, and
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Welfare Reform Bill
Part 1 — Employment and support allowance
3

(b)
the limitation is such that it is not reasonable to require him to
undertake such activity.
3
Deductions from contributory allowance: supplementary
(1)
This section applies to payments of the following kinds which are payable to
the claimant—
5
(a)
pension payments,
(b)
PPF periodic payments, and
(c)
payments of a prescribed description made to a person who is a
member of, or has been appointed to, a prescribed body carrying out
public or local functions.
10
(2)
Regulations may—
(a)
disapply section 2(1)(c), so far as relating to pension payments or PPF
periodic payments, in relation to persons of a prescribed description;
(b)
provide for pension payments or PPF periodic payments of a
prescribed description to be treated for the purposes of that provision
15
as not being payments to which this section applies;
(c)
provide for sums of a prescribed description to be treated for the
purposes of this section as payable to persons as pension payments or
PPF periodic payments (including, in particular, sums in relation to
which there is a deferred right of receipt);
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(d)
make provision for the method of determining how payments to which
this section applies are, for the purposes of section 2, to be related to
periods for which a person is entitled to a contributory allowance.
(3)
In this section—
“pension payment” means—
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(a)
a periodical payment made in relation to a person under a
personal pension scheme or, in connection with the coming to
an end of an employment of his, under an occupational pension
scheme or a public service pension scheme,
(b)
a payment of a prescribed description made under an insurance
30
policy providing benefits in connection with physical or mental
illness or disability, and
(c)
such other payments as may be prescribed;
“PPF periodic payment” means—
(a)
any periodic compensation payment made in relation to a
35
person, payable under the pension compensation provisions as
specified in section 162(2) of the Pensions Act 2004 (c. 35) or
Article 146(2) of the Pensions (Northern Ireland) Order 2005
(S.I. 2005/255 (N.I. 1)) (the pension compensation provisions),
and
40
(b)
any periodic payment made in relation to a person, payable
under section 166 of the Pensions Act 2004 or Article 150 of the
Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1))
(duty to pay scheme benefits unpaid at assessment date etc.).
(4)
For the purposes of subsection (3), “occupational pension scheme”, “personal
45
pension scheme” and “public service pension scheme” each have the meaning
given by section 1 of the Pension Schemes Act 1993 (c. 48), except that
“personal pension scheme” includes—

Welfare Reform Bill
Part 1 — Employment and support allowance
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(a)
an annuity contract or trust scheme approved under section 620 or 621
of the Income and Corporation Taxes Act 1988 (c. 1), and
(b)
a substituted contract within the meaning of section 622(3) of that Act,

which is treated as having become a registered pension scheme by virtue of
paragraph 1(1)(f) of Schedule 36 to the Finance Act 2004 (c. 12).
5
4
Amount of income-related allowance
(1)
In the case of an income-related allowance, the amount payable in respect of a
claimant shall be—
(a)
if he has no income, the applicable amount;
(b)
if he has an income, the amount by which the applicable amount
10
exceeds his income.
(2)
Subject to subsection (3), the applicable amount for the purposes of subsection
(1) shall be calculated by—
(a)
taking such amount, or the aggregate of such amounts, as may be
prescribed, and
15
(b)
if in the claimant’s case the conditions of entitlement to the support
component or the work-related activity component are satisfied,
adding the amount of that component.
(3)
Regulations may provide that, in prescribed cases, the applicable amount for
the purposes of subsection (1) shall be nil.
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(4)
The conditions of entitlement to the support component are—
(a)
that the assessment phase has ended,
(b)
that the claimant has limited capability for work-related activity, and
(c)
that such other conditions as may be prescribed are satisfied.
(5)
The conditions of entitlement to the work-related activity component are—
25
(a)
that the assessment phase has ended,
(b)
that the claimant does not have limited capability for work-related
activity, and
(c)
that such other conditions as may be prescribed are satisfied.
(6)
Regulations may—
30
(a)
prescribe circumstances in which paragraph (a) of subsection (4) or (5)
is not to apply;
(b)
prescribe circumstances in which entitlement under subsection (4) or
(5) is to be backdated;
(c)
make provision about the amount of the component under subsection
35
(4) or (5).
5
Advance award of income-related allowance
(1)
This section applies to claims for an employment and support allowance by a
person who—
(a)
would be entitled to an income-related allowance, but for the fact that
40
he does not satisfy the condition in paragraph 6(1)(a) of Schedule 1,
(b)
would satisfy that condition if he were entitled to the component
mentioned in section 4(4) or (5), and
(c)
is not entitled to a contributory allowance.

Welfare Reform Bill
Part 1 — Employment and support allowance
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(2)
In relation to claims to which this section applies, section 5(1) of the
Administration Act (regulations about claims for benefit) shall have effect as
if—
(a)
in paragraph (d) (power to permit an award on a claim for benefit for a
future period to be made subject to the condition that the claimant
5
satisfies the requirements for entitlement when the benefit becomes
payable under the award), there were inserted at the end “and to such
other conditions as may be prescribed”, and
(b)
in paragraph (e) (power to provide for such an award to be revised or
superseded under the Social Security Act 1998 (c. 14) if any of those
10
requirements are found not to have been satisfied), for “any of those
requirements” there were substituted “any of the conditions to which
the award is made subject”.
(3)
Regulations may, in relation to claims to which this section applies, make
provision enabling an award to be made on terms such that the time at which
15
benefit becomes payable under the award is later than the start of the period
for which the award is made.
6
Amount payable where claimant entitled to both forms of allowance
(1)
This section applies where a claimant is entitled to both a contributory
allowance and an income-related allowance.
20
(2)
If the claimant has no income, the amount payable by way of an employment
and support allowance shall be the greater of—
(a)
his personal rate, and
(b)
the applicable amount.
(3)
If the claimant has an income, the amount payable by way of an employment
25
and support allowance shall be the greater of—
(a)
his personal rate, and
(b)
the amount by which the applicable amount exceeds his income.
(4)
Where the amount payable to the claimant by way of an employment and
support allowance does not exceed his personal rate, the allowance shall be
30
treated as attributable to the claimant’s entitlement to a contributory
allowance.
(5)
Where the amount payable to the claimant by way of an employment and
support allowance exceeds his personal rate, the allowance shall be taken to
consist of two elements, namely—
35
(a)
an amount equal to his personal rate, and
(b)
an amount equal to the excess.
(6)
The element mentioned in subsection (5)(a) shall be treated as attributable to
the claimant’s entitlement to a contributory allowance.
(7)
The element mentioned in subsection (5)(b) shall be treated as attributable to
40
the claimant’s entitlement to an income-related allowance.
(8)
In this section—
“applicable amount” means the amount which, in the claimant’s case, is
the applicable amount for the purposes of section 4(1);
“personal rate” means the amount calculated in accordance with section
45
2(1).