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Pensions Bill


Pensions Bill
Part 1 — State pension

1

 

A

Bill

To

Make provision about pensions and other benefits payable to persons in

connection with bereavement or by reference to pensionable age; to make

provision about the establishment and functions of the Personal Accounts

Delivery Authority; 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

State pension

Entitlement to Category A and B retirement pensions

1       

Category A and B retirement pensions: single contribution condition

(1)   

Schedule 3 to the SSCBA (contribution conditions) is amended as follows.

5

(2)   

In paragraph 5 (contribution conditions for, among other things, Category A or

B retirement pension) in sub-paragraph (1) after “retirement pension” insert

“(other than one in relation to which paragraph 5A applies)”.

(3)   

After paragraph 5 insert—

“5A   (1)  

This paragraph applies to—

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(a)   

a Category A retirement pension in a case where the

contributor concerned attains pensionable age on or after 6th

April 2010,

(b)   

a Category B retirement pension payable by virtue of section

48A above in a case where the contributor concerned attains

15

pensionable age on or after that date,

(c)   

a Category B retirement pension payable by virtue of section

48B above in a case where the contributor concerned dies on

or after that date without having attained pensionable age

before that date.

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Bill 1254/2
 
 

Pensions Bill
Part 1 — State pension

2

 

      (2)  

The contribution condition for a Category A or Category B

retirement pension in relation to which this paragraph applies is

that—

(a)   

the contributor concerned must, in respect of each of not less

than 30 years of his working life, have paid or been credited

5

with contributions of a relevant class or been credited (in the

case of 1987-88 or any subsequent year) with earnings; and

(b)   

in the case of each of those years, the earnings factor derived

as mentioned in sub-paragraph (3) below must be not less

than the qualifying earnings factor for that year.

10

      (3)  

For the purposes of paragraph (b) of sub-paragraph (2) above, the

earnings factor—

(a)   

in the case of 1987-88 or any subsequent year, is that which is

derived from—

(i)   

so much of the contributor’s earnings as did not

15

exceed the upper earnings limit and upon which such

of the contributions mentioned in paragraph (a) of

that sub-paragraph as are primary Class 1

contributions were paid or treated as paid or earnings

credited; and

20

(ii)   

any Class 2 or Class 3 contributions for the year; or

(b)   

in the case of any earlier year, is that which is derived from

the contributions mentioned in paragraph (a) of that sub-

paragraph.

      (4)  

Regulations may modify sub-paragraphs (2) and (3) above for the

25

purposes of their application in a case where—

(a)   

the contributor concerned has paid, or been credited with,

contributions, or

(b)   

contributions have been deemed to be, or treated as, paid by

or credited to him,

30

           

under the National Insurance Act 1946 or the National Insurance Act

1965.”

(4)   

Part 1 of Schedule 1 contains consequential amendments.

2       

Category B retirement pension: removal of restriction on entitlement

(1)   

Section 48A of the SSCBA (Category B retirement pension for married person

35

or civil partner) is amended as follows.

(2)   

In each of subsections (2)(a) and (2B)(a) (whose effect is to require the other

spouse or other civil partner to have claimed a Category A retirement pension)

omit “and become entitled to a Category A retirement pension”.

(3)   

Omit subsection (5) (restriction on when Category B retirement pension for

40

married person or civil partner is payable).

(4)   

Part 2 of Schedule 1 contains consequential amendments.

(5)   

The amendments made by this section and that Part of that Schedule have

effect as from 6th April 2010.

 
 

Pensions Bill
Part 1 — State pension

3

 

(6)   

Section 48A(2) and (2B), as amended by this section, applies whether the

person mentioned in section 48A(1) or (2A) attained pensionable age before 6th

April 2010 or on or after that date.

Credits for basic state pension

3       

Contributions credits for relevant parents and carers

5

(1)   

After section 23 of the SSCBA insert—

“23A    

Contributions credits for relevant parents and carers

(1)   

This section applies to the following benefits—

(a)   

a Category A retirement pension in a case where the contributor

concerned attains pensionable age on or after 6th April 2010,

10

(b)   

a Category B retirement pension payable by virtue of section

48A below in a case where the contributor concerned attains

pensionable age on or after that date,

(c)   

a Category B retirement pension payable by virtue of section

48B below in a case where the contributor concerned dies on or

15

after that date without having attained pensionable age before

that date,

(d)   

a widowed parent’s allowance payable in a case where the

contributor concerned dies on or after that date,

(e)   

a bereavement allowance payable in a case where the

20

contributor concerned dies on or after that date.

(2)   

The contributor concerned in the case of a benefit to which this section

applies shall be credited with a Class 3 contribution for each week

falling after 6th April 2010 in respect of which the contributor was a

relevant carer.

25

(3)   

A person is a relevant carer in respect of a week if the person—

(a)   

is awarded child benefit for any part of that week in respect of

a child under the age of 12,

(b)   

is a foster parent for any part of that week,

(c)   

is engaged in caring, within the meaning given by regulations,

30

in that week.

(4)   

Regulations may make provision for a person’s entitlement to be

credited with Class 3 contributions by virtue of falling within

subsection (3)(b) or (c) above to be conditional on the person—

(a)   

applying to be so credited in accordance with the prescribed

35

requirements, and

(b)   

complying with the prescribed requirements as to the provision

of information to the Secretary of State.

(5)   

The contributor concerned in the case of a benefit to which this section

applies shall be credited with 52 Class 3 contributions for each tax year

40

ending before 6th April 2010 in which the contributor was precluded

from regular employment by responsibilities at home.

(6)   

For the purposes of subsection (5) above a person was precluded from

regular employment by responsibilities at home in any year if,

disregarding the exclusion at the end of Schedule 3, Part I, paragraph

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Pensions Bill
Part 1 — State pension

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5(7), the person would be taken to have been so precluded for the

purposes of sub-paragraph (b) of paragraph 5(7).

(7)   

For the purpose of determining entitlement to a benefit to which this

section applies, a week that falls partly in one tax year and partly in

another is to be treated as falling in the year in which it begins and not

5

in the following year.

(8)   

In this section—

“the contributor concerned” has the meaning given in section

21(5)(a) above;

“foster parent” has the meaning given by regulations.”

10

(2)   

In paragraph 5 of Part 1 of Schedule 3 of that Act (contribution conditions for

entitlement to, among other things, widowed parent’s allowance, bereavement

allowance and Category A or B retirement pension) at the end of sub-

paragraph (7) (home responsibilities protection) insert—

           

“But nothing in this sub-paragraph applies in relation to any benefit

15

to which section 23A above applies.”

(3)   

Part 3 of Schedule 1 contains consequential amendments.

Abolition of adult dependency increases

4       

Category A and C retirement pensions: abolition of adult dependency

increases

20

(1)   

The following provisions of the SSCBA are to cease to have effect on 6th April

2010—

(a)   

section 83 (pension increase: wife),

(b)   

section 84 (pension increase: husband), and

(c)   

section 85 (pension increase: person with care of children or qualifying

25

young persons).

(2)   

Paragraph 2 of Part 2 of Schedule 4 to the Pensions Act 1995 (c. 26) (which

replaces sections 83 and 84 of the SSCBA with a new section 83A equalising

pension increases for dependent wives and husbands with effect from 6th

April 2010) is omitted.

30

(3)   

Part 4 of Schedule 1 contains consequential amendments.

(4)   

The amendments made by that Part of that Schedule have effect as from 6th

April 2010.

(5)   

Nothing in—

(a)   

the repeals in subsection (1),

35

(b)   

the amendments in Part 4 of Schedule 1, or

(c)   

the repeals in Part 2 of Schedule 7,

   

applies in relation to a qualifying person at any time falling on or after 6th April

2010 but before the appropriate date.

(6)   

In subsection (5) a “qualifying person” means a person who—

40

(a)   

has, before 6th April 2010, made a claim for a relevant increase in

accordance with section 1 of the Administration Act; and

(b)   

immediately before that date is either—

 
 

Pensions Bill
Part 1 — State pension

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(i)   

entitled to the increase claimed, or

(ii)   

a beneficiary to whom section 92 of the SSCBA (continuation of

awards where fluctuating earnings) applies in respect of that

increase.

(7)   

In subsection (5) “the appropriate date” means the earlier (or earliest) of—

5

(a)   

6th April 2020;

(b)   

the date when the qualifying person ceases to be either entitled to the

relevant increase or a beneficiary to whom section 92 of the SSCBA

applies in respect of it;

(c)   

where the relevant increase is payable to the qualifying person under

10

section 83 of that Act, the date on which his wife attains pensionable

age.

(8)   

In this section “relevant increase” means an increase in a Category A or

Category C retirement pension under section 83, 84 or 85 of the SSCBA.

Up-rating of basic state pension and other benefits

15

5       

Up-rating of basic pension etc. and standard minimum guarantee by

reference to earnings

(1)   

After section 150 of the Administration Act insert—

“150A   

Annual up-rating of basic pension etc. and standard minimum

guarantee

20

(1)   

The Secretary of State shall in each tax year review the following

amounts in order to determine whether they have retained their value

in relation to the general level of earnings obtaining in Great Britain—

(a)   

the amount of the basic pension;

(b)   

the specified amounts in the case of Category B, C or D

25

retirement pensions;

(c)   

the specified amounts in the case of industrial death benefit;

and

(d)   

the amounts of the standard minimum guarantee for the time

being prescribed under section 2(4) and (5)(a) and (b) of the

30

State Pension Credit Act 2002.

(2)   

Where it appears to the Secretary of State that the general level of

earnings is greater at the end of the period under review than it was at

the beginning of that period, he shall lay before Parliament the draft of

an order which increases each of the amounts referred to in subsection

35

(1) above by a percentage not less than the percentage by which the

general level of earnings is greater at the end of the period than it was

at the beginning.

(3)   

Subsection (2) above does not require the Secretary of State to provide

for an increase in any case if it appears to him that the amount of the

40

increase would be inconsiderable.

(4)   

The Secretary of State may, in providing for an increase in pursuance of

subsection (2) above, adjust the amount of the increase so as to round

the sum in question up or down to such extent as he thinks appropriate.

 
 

Pensions Bill
Part 1 — State pension

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(5)   

The Secretary of State shall lay with a draft order under this section a

copy of a report by the Government Actuary or the Deputy

Government Actuary giving that Actuary’s opinion on the likely effect

on the National Insurance Fund of any parts of the order relating to

sums payable out of that Fund.

5

(6)   

If a draft order laid before Parliament under this section is approved by

a resolution of each House, the Secretary of State shall make the order

in the form of the draft.

(7)   

An order under this section shall be framed so as to bring the increase

in question into force in the week beginning with the first Monday in

10

the tax year following that in which the order is made.

(8)   

For the purposes of any review under subsection (1) above the

Secretary of State shall estimate the general level of earnings in such

manner as he thinks fit.

(9)   

If a draft order under this section is combined with a draft up-rating

15

order under section 150 above, the report required by virtue of

subsection (5) above may be combined with that required by virtue of

section 150(8) above.

(10)   

In this section—

“the amount of the basic pension” means the first amount

20

specified in section 44(4) of the Contributions and Benefits Act

(weekly rate of Category A retirement pension);

“the specified amounts in the case of Category B, C or D retirement

pensions” means—

(a)   

the amount specified in paragraph 5 of Part 1 of

25

Schedule 4 to the Contributions and Benefits Act, and

(b)   

the amounts specified in paragraphs 6 and 7 of Part 3 of

that Schedule;

“the specified amounts in the case of industrial death benefit”

means—

30

(a)   

the amounts specified in paragraph 10 of Part 5 of that

Schedule (apart from the amount of the initial rate), and

(b)   

the amount specified in paragraph 11 of that Part of that

Schedule.”

(2)   

Part 5 of Schedule 1 contains consequential and related amendments.

35

(3)   

The section 150A inserted by subsection (1) and the amendments made by Part

5 of Schedule 1, so far as relating to the amounts referred to in section

150A(1)(a) to (c), have effect in relation to the designated tax year and

subsequent tax years (with the result that the first review to be carried out

under section 150A(1) in relation to those amounts is to be carried out in the

40

designated tax year).

(4)   

“The designated tax year” means such tax year as the Secretary of State may

designate by an order made before 1st April 2011.

(5)   

The Secretary of State must exercise his power under subsection (4) in such a

way as to secure that the tax year immediately following the designated tax

45

year is one that begins before the relevant dissolution date.

 
 

Pensions Bill
Part 1 — State pension

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(6)   

“The relevant dissolution date” means the latest date on which, having regard

to the maximum period for which a Parliament may exist, the Parliament in

existence at the time of exercise of the power could be dissolved.

(7)   

The new section 150A inserted by subsection (1) and the amendments made by

Part 5 of Schedule 1, so far as relating to the amounts mentioned in section

5

150A(1)(d), have effect in relation to the tax year in which this Act is passed and

subsequent tax years.

6       

Preservation of link with prices in case of other benefits

(1)   

Section 150 of the Administration Act (up-rating by reference to prices) is

amended as follows.

10

(2)   

In subsection (1) (annual reviews)—

(a)   

in paragraph (a), for sub-paragraphs (i) and (ii) substitute—

“(i)   

Schedule 4 (excluding the provisions of Parts

1, 3 and 5 of the Schedule that specify amounts

mentioned in section 150A(1) below); and

15

(ii)   

section 44(4) so far as relating to the lower rate

of short-term incapacity benefit;”;

(b)   

before paragraph (b) insert—

“(ab)   

specified in regulations under section 39(2A) or section

39C(1A) of that Act;”; and

20

(c)   

in paragraph (l), at the end insert “(other than those prescribing the

amounts mentioned in section 150A(1)(d) below)”.

(3)   

In subsection (3) (sums to which requirement to up-rate applies)—

(a)   

in paragraph (a), for “1 to 6” substitute “1 to 5” and at the end insert

“(excluding the provisions of Parts 1 and 5 of the Schedule that specify

25

amounts mentioned in section 150A(1) below)”; and

(b)   

in paragraph (b), before “(b), (c),” insert “(ab),”.

(4)   

In subsection (7) (sums that may be up-rated) at the end insert—

   

“The reference to regulations under the State Pension Credit Act 2002

does not include those prescribing the amounts mentioned in section

30

150A(1)(d) below.”

(5)   

In section 39 of the SSCBA (rate of widowed mother’s allowance and widow’s

pension) after subsection (2) insert—

“(2A)   

In its application by virtue of subsection (1) above, section 44(4) below

is to be read as if for the first amount specified in that provision there

35

were substituted a reference to the amount prescribed for the purposes

of this subsection.”

(6)   

In section 39C of the SSCBA (rate of widowed parent’s allowance and

bereavement allowance)—

(a)   

for subsection (2) substitute—

40

“(1A)   

In its application by virtue of subsection (1) above, section 44(4)

below is to be read as if for the first amount specified in that

provision there were substituted a reference to the amount

prescribed for the purposes of this subsection.

 
 

 
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