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Pensions Bill


Pensions Bill
Schedule 2 — Additional pension: simplified accrual rates
Part 1 — New Schedule 4B to the SSCBA

33

 

(a)   

in sub-paragraph (5) in paragraph (b) of the definition of “reckonable

earnings”, for “the current upper earnings limit” substitute “the

applicable limit”; and

(b)   

after that sub-paragraph insert—

    “(6)  

“The applicable limit” means—

5

(a)   

in relation to a payment made in a tax week falling

in a tax year before the flat rate introduction year,

the upper earnings limit for the week in question;

(b)   

in relation to a payment made in a tax week falling

in the flat rate introduction year or any subsequent

10

tax year, the upper accrual point divided by 52.”

Part 8

Increase in pensionable age for men and women

Social Security Contributions and Benefits Act 1992 (c. 4)

40         

In section 38 of the SSCBA (widow’s pension) in subsection (2) (entitlement

15

to continue until age of 65) for “the age of 65” substitute “pensionable age”.

41         

In section 64 of the SSCBA (entitlement to attendance allowance) in

subsection (1) (conditions to be satisfied for entitlement to the allowance) for

“is aged 65 or over” substitute “has attained pensionable age”.

42    (1)  

Section 75 of the SSCBA (disability living allowance: persons aged 65 or

20

over) is amended as follows.

      (2)  

In subsection (1) (no entitlement to the allowance for persons aged 65 or

over) for “the age of 65” substitute “pensionable age”.

      (3)  

For the sidenote substitute “Persons who have attained pensionable age”.

43         

In section 149 of the SSCBA (supplementary provisions relating to

25

Christmas bonus) in subsection (4) (for purposes of section 148 persons not

to be taken to be entitled to payment of war disablement pension unless they

have attained the age of 65) for “the age of 65” substitute “pensionable age”.

State Pension Credit Act 2002 (c. 16)

44         

In section 3 of the State Pension Credit Act 2002 (savings credit) in

30

subsection (1) (first condition for savings credit) in paragraph (a) for “the age

of 65” substitute “pensionable age”.

Schedule 2

Section 11

 

Additional pension: simplified accrual rates

Part 1

35

New Schedule 4B to the SSCBA

1          

After Schedule 4A to the SSCBA (additional pension) insert the following

 

 

Pensions Bill
Schedule 2 — Additional pension: simplified accrual rates
Part 1 — New Schedule 4B to the SSCBA

34

 

Schedule.

“Schedule 4B

Section 45

 

Additional pension: accrual rates for purposes of section 45(2)(d)

Part 1

Amount for purposes of section 45(2)(d)

5

1     (1)  

The amount referred to in section 45(2)(d) is to be calculated as

follows—

(a)   

calculate the appropriate amount for each of the relevant

years within section 45(2)(d) to which Part 2 of this

Schedule applies;

10

(b)   

calculate the appropriate amount for each of the relevant

years within section 45(2)(d) to which Part 3 of this

Schedule applies; and

(c)   

add those amounts together.

      (2)  

But if the resulting amount is a negative one, the amount referred

15

to in section 45(2)(d) is nil.

Part 2

Normal rules: employment not contracted-out

Application

2          

This Part applies to a relevant year if the contracted-out condition

20

is not satisfied in respect of any tax week in the year.

Appropriate amount for year

3          

The appropriate amount for the year for the purposes of

paragraph 1 is either—

(a)   

the flat rate amount for the year (if there is a surplus in the

25

pensioner’s earnings factor for the year which does not

exceed the LET), or

(b)   

the sum of the flat rate amount and the earnings-related

amount for the year (if there is such a surplus which

exceeds the LET).

30

4          

The flat rate amount for the year is calculated by multiplying the

FRAA in accordance with the last order under section 148AA of

the Administration Act to come into force before the end of the

final relevant year.

5          

The earnings-related amount for the year is calculated as

35

follows—

(a)   

take the part of the surplus for the year which exceeds the

LET but which does not exceed the UAP;

(b)   

multiply that amount in accordance with the last order

under section 148 of the Administration Act to come into

40

force before the end of the final relevant year;

 

 

Pensions Bill
Schedule 2 — Additional pension: simplified accrual rates
Part 1 — New Schedule 4B to the SSCBA

35

 

(c)   

multiply the amount found under paragraph (b) by 10%;

(d)   

divide the amount found under paragraph (c) by 44.

Part 3

contracted-out employment

Application

5

6          

This Part applies to a relevant year if the contracted-out condition

is satisfied in respect of each tax week in the year.

Appropriate amount for year

7          

The appropriate amount for the year for the purposes of

paragraph 1 is calculated as follows—

10

(a)   

calculate amounts A and B in accordance with paragraphs

8 to 10;

(b)   

subtract amount B from amount A.

Amount A: assumed surplus not exceeding LET

8     (1)  

Amount A is calculated in accordance with this paragraph if there

15

is an assumed surplus in the pensioner’s earnings factor for the

year which does not exceed the LET.

      (2)  

In such a case, amount A is the flat rate amount for the year.

      (3)  

The flat rate amount for the year is calculated by multiplying the

FRAA in accordance with the last order under section 148AA of

20

the Administration Act to come into force before the end of the

final relevant year.

Amount A: assumed surplus exceeding LET

9     (1)  

Amount A is calculated in accordance with this paragraph if there

is an assumed surplus in the pensioner’s earnings factor for the

25

year which exceeds the LET.

      (2)  

In such a case, amount A is calculated as follows—

(a)   

take the part of the assumed surplus for the year which

exceeds the LET but which does not exceed the UAP;

(b)   

multiply that amount in accordance with the last order

30

under section 148 of the Administration Act to come into

force before the end of the final relevant year;

(c)   

multiply the amount found under paragraph (b) by 10%;

(d)   

divide the amount found under paragraph (c) by 44;

(e)   

add the amount found under paragraph (d) to the flat rate

35

amount for the year.

      (3)  

The flat rate amount for the year is calculated by multiplying the

FRAA in accordance with the last order under section 148AA of

the Administration Act to come into force before the end of the

final relevant year.

40

 

 

Pensions Bill
Schedule 2 — Additional pension: simplified accrual rates
Part 1 — New Schedule 4B to the SSCBA

36

 

Amount B

10    (1)  

Amount B is calculated as follows—

(a)   

take the part of the assumed surplus for the year which

exceeds the QEF but which does not exceed the UAP;

(b)   

multiply that amount in accordance with the last order

5

under section 148 of the Administration Act to come into

force before the end of the final relevant year;

(c)   

multiply the amount found under paragraph (b) by 20%;

(d)   

divide the amount found under paragraph (c) by the

number of relevant years in the pensioner’s working life.

10

      (2)  

Section 44B is to be ignored in applying section 44(6) for the

purposes of this paragraph.

Part 4

Other cases

11         

The Secretary of State may make regulations containing provision

15

for finding for a tax year the amount referred to in section

45(2)(d)—

(a)   

in cases where the circumstances relating to the pensioner

change in the course of the year, and

(b)   

in such other cases as the Secretary of State thinks fit.

20

Part 5

Interpretation

12         

In this Schedule—

“assumed surplus”, in relation to a pensioner’s earnings

factor for a year, means the surplus there would be in that

25

factor for the year if section 48A(1) of the Pension Schemes

Act 1993 (c. 48) (no primary Class 1 contributions deemed

to be paid) did not apply in relation to any tax week falling

in the year;

“the contracted-out condition”, in relation to a tax week,

30

means the condition that any earnings paid to or for the

benefit of the pensioner in that week in respect of

employment were in respect of employment qualifying

him for a pension provided by a salary related contracted-

out scheme (within the meaning of the Pension Schemes

35

Act 1993);

“the FRAA” has the meaning given by paragraph 13;

“the LET”, in relation to a tax year, means the low earnings

threshold for the year as specified in section 44A above;

“the QEF”, in relation to a tax year, means the qualifying

40

earnings factor for the year;

“relevant year” and “final relevant year” have the same

meanings as in section 44 above;

“the UAP” means the upper accrual point.

13    (1)  

“The FRAA” means the flat rate accrual amount.

45

 

 

Pensions Bill
Schedule 2 — Additional pension: simplified accrual rates
Part 2 — Revaluation of flat rate accrual amount

37

 

      (2)  

That amount is £72.80 for the flat rate introduction year and

subsequent tax years (but subject to section 148AA of the

Administration Act).”

Part 2

Revaluation of flat rate accrual amount

5

2          

After section 148A of the Administration Act insert—   

“148AA  

Revaluation of flat rate accrual amount

(1)   

The Secretary of State must in the tax year preceding the flat rate

introduction year and in each subsequent tax year review the general

level of earnings obtaining in Great Britain and any changes in that

10

level which have taken place during the review period.

(2)   

In this section “the review period” means—

(a)   

in the case of the first review under this section, the period

beginning with 1st October 2004 and ending with 30th

September in the tax year preceding the flat rate introduction

15

year; and

(b)   

in the case of each subsequent review under this section, the

period since—

(i)   

the end of the last period taken into account in a

review under this section, or

20

(ii)   

such other date (whether earlier or later) as the

Secretary of State may determine.

(3)   

If on such a review it appears to the Secretary of State that the general

level of earnings has increased during the review period, he must

make an order under this section.

25

(4)   

An order under this section is an order directing that for the

purposes of Schedule 4B to the Contributions and Benefits Act—

(a)   

there is to be a new FRAA for the tax years after the tax year

in which the review takes place, and

(b)   

the amount of that FRAA is to be the amount specified in

30

subsection (5) below, increased by not less than the

percentage by which the general level of earnings increased

during the review period.

(5)   

The amount referred to in subsection (4)(b) is—

(a)   

in the case of the first review under this section, £72.80, and

35

(b)   

in the case of each subsequent review, the FRAA for the year

in which the review takes place.

(6)   

The Secretary of State may, for the purposes of any provision of

subsections (4) and (5), adjust any amount by rounding it up or down

to such extent as he thinks appropriate.

40

(7)   

This section does not require the Secretary of State to direct any

increase where it appears to him that the increase would be

inconsiderable.

(8)   

If on any review under this section the Secretary of State determines

that he is not required to make an order under this section, he must

45

 

 

Pensions Bill
Schedule 3 — Increase in pensionable age for men and women

38

 

instead lay before each House of Parliament a report explaining his

reasons for arriving at that determination.

(9)   

For the purposes of any review under this section the Secretary of

State may estimate the general level of earnings in such manner as he

thinks fit.

5

(10)   

In this section—

“the flat rate introduction year” has the meaning given by

section 122 of the Contributions and Benefits Act

(interpretation of Parts 1 to 6 etc.);

“the FRAA” means the flat rate accrual amount (see paragraph

10

13 of Schedule 4B to the Contributions and Benefits Act

(additional pension: simplified accrual rates for purposes of

section 45(2)(d))).”

Schedule 3

Section 13

 

Increase in pensionable age for men and women

15

1          

In the sidenote to section 126 of the Pensions Act 1995 (c. 26), at the end insert

“and increase in pensionable age”.

2          

In section 126 of that Act (equalisation of pensionable age) in paragraph (a),

at the end insert “and to increase the pensionable age for men and women

progressively over a period of 22 years beginning with 6th April 2024”.

20

3          

For the heading for Schedule 4 to that Act substitute “Equalisation of and

increase in pensionable age for men and women”.

4     (1)  

Paragraph 1 of Part 1 of Schedule 4 to that Act (pensionable ages for men and

women) is amended as follows.

      (2)  

In sub-paragraph (1), after “man” insert “born before 6th April 1959”.

25

      (3)  

In sub-paragraph (3), for “the following table” substitute “table 1”.

      (4)  

For sub-paragraph (4) substitute—

    “(4)  

A woman born after 5th April 1955 but before 6th April 1959

attains pensionable age when she attains the age of 65.”

      (5)  

For the heading for the table substitute “TABLE 1”.

30

      (6)  

After the table insert—

    “(5)  

A person born on any day in a period mentioned in column 1 of

table 2 attains pensionable age at the commencement of the day

shown against that period in column 2.

 

 

Pensions Bill
Schedule 3 — Increase in pensionable age for men and women

39

 

TABLE 2

 

(1)

(2)

 
 

Period within which birthday falls

Day pensionable age

 
  

attained

 
 

6th April 1959 to 5th May 1959

6th May 2024

 

5

 

6th May 1959 to 5th June 1959

6th July 2024

 
 

6th June 1959 to 5th July 1959

6th September 2024

 
 

6th July 1959 to 5th August

6th November 2024

 
 

1959

  
 

6th August 1959 to 5th

6th January 2025

 

10

 

September 1959

  
 

6th September 1959 to 5th

6th March 2025

 
 

October 1959

  
 

6th October 1959 to 5th

6th May 2025

 
 

November 1959

  

15

 

6th November 1959 to 5th

6th July 2025

 
 

December 1959

  
 

6th December 1959 to 5th

6th September 2025

 
 

January 1960

  
 

6th January 1960 to 5th

6th November 2025

 

20

 

February 1960

  
 

6th February 1960 to 5th March

6th January 2026

 
 

1960

  
 

6th March 1960 to 5th April

6th March 2026

 
 

1960

  

25

      (6)  

A person born after 5th April 1960 but before 6th April 1968 attains

pensionable age when the person attains the age of 66.

      (7)  

A person born on any day in a period mentioned in column 1 of

table 3 attains pensionable age at the commencement of the day

shown against that period in column 2.

30

TABLE 3

 

(1)

(2)

 
 

Period within which birthday falls

Day pensionable age

 
  

attained

 
 

6th April 1968 to 5th May 1968

6th May 2034

 

35

 

 

 
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Revised 29 November 2006