Welfare Reform Bill

House of Commons

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Welfare Reform Bill

Welfare Reform Bill
Part 5 — General
48

66
Transition
(1)
The Secretary of State may by order made by statutory instrument make in
connection with the coming into force of any provision of this Act such
transitional provision or savings as he considers necessary or expedient.
(2)
The power under subsection (1) includes power to make—
5
(a)
different provision for different cases or areas;
(b)
incidental, supplementary and consequential provision.
(3)
The power under subsection (1) is not exercisable in respect of any matter for
which provision may be made under Schedule 4.
67
Extent
10
(1)
Subject to the following provisions, this Act extends to England and Wales and
Scotland only.
(2)
The following provisions extend to England and Wales only—
(a)
sections 41(1) to (10) and 42, and
(b)
paragraphs 6, 11(2) and 15 of Schedule 3.
15
(3)
Paragraphs 1, 2, 4, 11(3), 13 and 21 of Schedule 3 extend to Scotland only.
(4)
The following provisions also extend to Northern Ireland—
(a)
sections 32(7), 48, 55, 56, 60, 62, 63, 66, this section and sections 68 and
69,
(b)
paragraph 15 of Schedule 2, and sections 21 and 23 to 25 so far as
20
relating thereto,
(c)
paragraphs 5, 10(28), 16(1) and (2), 18 and 23 of Schedule 3, and section
27 so far as relating thereto,
(d)
paragraph 1 of Schedule 7, and section 61 so far as relating thereto, and
(e)
Schedule 8, so far as relating to the Vaccine Damage Payments Act 1979
25
(c. 17), the Income and Corporation Taxes Act 1988 (c. 1), the Disability
(Grants) Act 1993 (c. 14), section 2 of the Social Security Act 1998 (c. 14)
and the Income Tax (Earnings and Pensions) Act 2003 (c. 1), and section
65 so far as relating thereto.
(5)
The following provisions extend to Northern Ireland only—
30
(a)
section 44, and
(b)
Schedule 8, so far as relating to the Social Security Administration
(Northern Ireland) Act 1992 (c. 8), and section 65 so far as relating
thereto.
(6)
The following provisions also extend to the Isle of Man—
35
(a)
sections 55 and 56, section 66, this section and sections 68 and 69,
(b)
paragraph 1 of Schedule 7, and section 61 so far as relating thereto, and
(c)
Schedule 8, so far as relating to the Vaccine Damage Payments Act 1979,
and section 65 so far as relating thereto.
68
Commencement
40
(1)
The following provisions shall come into force at the end of the period of 2
months beginning with the day on which this Act is passed—
(a)
sections 40(2) and (3), 43, 44, 53, 54, 58 and 60(1)(b) and (2) to (6),

Welfare Reform Bill
Part 5 — General
49

(b)
paragraphs 1 to 4, 10, 11 and 14 of Schedule 5, and section 39 so far as
relating thereto,
(c)
paragraphs 2(1) and (3), 3 and 4 of Schedule 7, and section 61 so far as
relating thereto, and
(d)
Schedule 8, so far as relating to—
5
(i)
section 3(5) of the Pneumoconiosis etc. (Workers’
Compensation) Act 1979 (c. 41),
(ii)
section 140(1A) of the Contributions and Benefits Act,
(iii)
sections 71(5), 71ZA, 134(8)(a) and 168(3)(d) of the
Administration Act,
10
(iv)
section 69(5) of the Social Security Administration (Northern
Ireland) Act 1992 (c. 8),
(v)
Schedule 13 to the Local Government etc. (Scotland) Act 1994
(c. 39),
(vi)
section 38(7)(a) of, and paragraph 81(2) of Schedule 7 to, the
15
Social Security Act 1998 (c. 14), and
(vii)
paragraph 65 of Schedule 24 to the Civil Partnership Act 2004
(c. 33),

and section 65 so far as relating thereto.
(2)
The remaining provisions of this Act, except—
20
(a)
this section,
(b)
sections 62, 63, 64, 66, 67 and 69, and
(c)
paragraph 8 of Schedule 5, and section 39 so far as relating thereto,

shall come into force on such day as the Secretary of State may by order made
by statutory instrument appoint, and different days may be so appointed for
25
different purposes.
69
Short title
This Act may be cited as the Welfare Reform Act 2007.

50
Welfare Reform Bill
Schedule 1 — Employment and support allowance: additional conditions
Part 1 — Contributory allowance

Schedules
Schedule 1
Section 1

Employment and support allowance: additional conditions
Part 1
Contributory allowance
5
Conditions relating to national insurance
1     (1)
The first condition is that—
(a)
the claimant has actually paid Class 1 or Class 2 contributions in
respect of one of the last three complete tax years (“the base tax
year”) before the beginning of the relevant benefit year,
10
(b)
those contributions must have been paid before the relevant benefit
week, and
(c)
the earnings factor derived as mentioned in sub-paragraph (2) must
be not less than the base tax year’s lower earnings limit multiplied by
25.
15
      (2)
The earnings factor referred to in sub-paragraph (1)(c) is the aggregate of the
claimant’s earnings factors derived—
(a)
from so much of his earnings as did not exceed the base tax year’s
upper earnings limit and upon which primary Class 1 contributions
have been paid or treated as paid, and
20
(b)
from Class 2 contributions.
      (3)
Where primary Class 1 contributions have been paid or treated as paid on
any part of a person’s earnings, sub-paragraph (2)(a) shall have effect as if
such contributions had been paid or treated as paid on so much of the
earnings as did not exceed the base tax year’s upper earnings limit.
25
      (4)
Regulations may—
(a)
provide for the condition set out in sub-paragraph (1) to be taken to
be satisfied in the case of persons who have been entitled to any
prescribed description of benefit during any prescribed period or at
any prescribed time;
30
(b)
with a view to securing any relaxation of the requirements of that
condition in relation to persons who have been so entitled, provide
for that condition to apply in relation to them subject to prescribed
modifications.
      (5)
In sub-paragraph (4), “benefit” means—
35
(a)
any benefit within the meaning of section 122(1) of the Contributions
and Benefits Act,

Welfare Reform Bill
Schedule 1 — Employment and support allowance: additional conditions
Part 1 — Contributory allowance
51

(b)
any benefit under Parts 7 to 12 of that Act,
(c)
credits under regulations under section 22(5) of that Act,
(d)
a contributory allowance, and
(e)
working tax credit.
2     (1)
The second condition is that—
5
(a)
the claimant has in respect of the last two complete tax years before
the beginning of the relevant benefit year either paid or been credited
with Class 1 or Class 2 contributions or been credited with earnings,
and
(b)
the earnings factor derived as mentioned in sub-paragraph (2) must
10
be not less in each of those years than the year’s lower earnings limit
multiplied by 50.
      (2)
The earnings factor referred to in sub-paragraph (1)(b) is the aggregate of the
claimant’s earnings factors derived—
(a)
from so much of his earnings as did not exceed the upper earnings
15
limit for the year and upon which primary Class 1 contributions have
been paid or treated as paid or from earnings credited, and
(b)
from Class 2 contributions.
      (3)
Where primary Class 1 contributions have been paid or treated as paid on
any part of a person’s earnings, sub-paragraph (2)(a) shall have effect as if
20
such contributions had been paid or treated as paid on so much of the
earnings as did not exceed the upper earnings limit for the year.
3     (1)
For the purposes of paragraphs 1 and 2—
(a)
“benefit year” means a period which is a benefit year for the
purposes of Part 2 of the Contributions and Benefits Act or such
25
other period as may be prescribed for the purposes of this Part of this
Schedule;
(b)
“Class 1 contributions”, “Class 2 contributions” and “primary Class 1
contributions” have the same meaning as in the Contributions and
Benefits Act (see section 1 of that Act);
30
(c)
“earnings” shall be construed in accordance with sections 3, 4 and
112 of that Act;
(d)
“earnings factor” shall be construed in accordance with sections 22
and 23 of that Act;
(e)
“lower earnings limit” and “upper earnings limit” shall be construed
35
in accordance with section 5 of that Act and references to the lower
or upper earnings limit of a tax year are to whatever is (or was) the
limit in force for that year under that section;
(f)
“relevant benefit year” is the benefit year which includes the
beginning of the period of limited capability for work which includes
40
the relevant benefit week;
(g)
“tax year” means the 12 months beginning with 6th April in any year.
      (2)
Regulations may provide for sub-paragraph (1)(g) to have effect in
prescribed circumstances with prescribed modifications in the case of—
(a)
a person who has previously ceased to be entitled to a contributory
45
allowance;
(b)
a person who has made a claim for an employment and support
allowance in connection with which he failed to satisfy one or both
of the conditions in paragraphs 1 and 2.

Welfare Reform Bill
Schedule 1 — Employment and support allowance: additional conditions
Part 2 — Income-related allowance
52

Condition relating to youth
4     (1)
The third condition is that —
(a)
the claimant was under 20 or, in prescribed cases, 25 when the
relevant period of limited capability for work began,
(b)
he is not receiving full-time education,
5
(c)
he satisfies such conditions as may be prescribed with respect to
residence or presence in Great Britain (or both), and
(d)
there has been a day in the relevant period of limited capability for
work—
(i)
which was a day on which he was aged at least 16, and
10
(ii)
which was preceded by a period of 196 consecutive days
throughout which he had limited capability for work.
      (2)
In sub-paragraph (1), “relevant period of limited capability for work” means
the period of limited capability for work which includes the relevant benefit
week.
15
      (3)
Regulations may prescribe circumstances in which sub-paragraph (1)(a)
does not apply in the case of a person who has previously ceased to be
entitled to an employment and support allowance to which he was entitled
by virtue of satisfying the condition set out in sub-paragraph (1).
      (4)
Regulations may make provision about when, for the purposes of sub-
20
paragraph (1)(b ), a person is, or is not, to be treated as receiving full-time
education.
“Relevant benefit week”
5
In this Part of this Schedule, “relevant benefit week” means the week in
relation to which the question of entitlement to an employment and support
25
allowance is being considered.
Part 2
Income-related allowance
6     (1)
The conditions are that the claimant—
(a)
has an income which does not exceed the applicable amount or has
30
no income;
(b)
does not have capital which, or a prescribed part of which, exceeds
the prescribed amount;
(c)
is not entitled to state pension credit;
(d)
is not a member of a couple the other member of which is entitled to
35
an income-related allowance, state pension credit, income support or
an income-based jobseeker’s allowance;
(e)
is not engaged in remunerative work;
(f)
is not a member of a couple the other member of which is engaged in
remunerative work;
40
(g)
is not receiving education.
      (2)
Where the claimant is a member of a couple, the income and capital of the
other member of the couple shall, except in prescribed circumstances, be

Welfare Reform Bill
Schedule 1 — Employment and support allowance: additional conditions
Part 2 — Income-related allowance
53

treated for the purpose of this paragraph as income and capital of the
claimant.
      (3)
Regulations may prescribe circumstances in which, for the purposes of sub-
paragraph (1)(e) and (f)—
(a)
a person who is not engaged in remunerative work is to be treated as
5
engaged in remunerative work, or
(b)
a person who is engaged in remunerative work is to be treated as not
engaged in remunerative work.
      (4)
Regulations may—
(a)
make provision about when, for the purposes of sub-paragraph
10
(1)(g), a person is, or is not, to be treated as receiving education;
(b)
prescribe circumstances in which sub-paragraph (1)(g) does not
apply.
      (5)
In this paragraph—
“applicable amount” means the amount which, in the claimant’s case,
15
is the applicable amount for the purposes of section 4(1);
“couple” means—
(a)
a man and woman who are married to each other and are
members of the same household;
(b)
a man and woman who are not married to each other, but are
20
living together as husband and wife otherwise than in
prescribed circumstances;
(c)
two people of the same sex who are civil partners of each
other and are members of the same household; or
(d)
two people of the same sex who are not civil partners of each
25
other, but are living together as if they were civil partners
otherwise than in prescribed circumstances;
“education” has such meaning as may be prescribed;
“income-based jobseeker’s allowance” has the same meaning as in the
Jobseekers Act 1995 (c. 18);
30
“remunerative work” has such meaning as may be prescribed.
      (6)
For the purposes of this paragraph, two people of the same sex are to be
regarded as living together as if they were civil partners if, but only if, they
would be regarded as living together as husband and wife were they instead
two people of the opposite sex.
35
      (7)
Regulations may make provision for the preceding provisions of this
paragraph to have effect with prescribed modifications in a case where—
(a)
the claimant is a husband or wife by virtue of a marriage entered into
under a law which permits polygamy,
(b)
either party to the marriage has for the time being any spouse
40
additional to the other party, and
(c)
the claimant, the other party to the marriage and the additional
spouse are members of the same household.
      (8)
Regulations may make provision for the purposes of this paragraph as to
circumstances in which people are to be treated as being or not being
45
members of the same household.