Pensions Bill

House of Commons

Session 2006 - 07
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Pensions Bill

26
Pensions Bill
Schedule 1 — State pension: consequential and related amendments
Part 1 — Category A and B retirement pensions: single contribution condition

Schedules
Schedule 1
Sections 1 to 5, 9, 12, and 13

State pension: consequential and related amendments
Part 1
Category A and B retirement pensions: single contribution condition
5
1     (1)
Section 44 of the SSCBA (Category A retirement pension) is amended as
follows.
      (2)
In subsection (1) for paragraph (b) substitute—
“(b)
he satisfies the relevant conditions or condition;”.
      (3)
After subsection (1) insert—
10
“(1A)
In subsection (1)(b) above “the relevant conditions or condition”
means—
(a)
in a case where the person attains pensionable age before 6th
April 2010, the conditions specified in Schedule 3, Part I,
paragraph 5;
15
(b)
in a case where the person attains pensionable age on or after
that date, the condition specified in Schedule 3, Part I,
paragraph 5A.”
2     (1)
Section 48A of the SSCBA (Category B retirement pension for married
person or civil partner) is amended as follows.
20
      (2)
In subsection (2) for paragraph (b) substitute—
“(b)
satisfies the relevant conditions or condition.”
      (3)
After subsection (2) insert—
“(2ZA)
In subsection (2)(b) above “the relevant conditions or condition”
means—
25
(a)
in a case where the spouse is a married man who attains
pensionable age before 6th April 2010, the conditions
specified in Schedule 3, Part I, paragraph 5;
(b)
in a case where the spouse attains pensionable age on or after
that date, the condition specified in Schedule 3, Part I,
30
paragraph 5A.”
      (4)
In subsection (2B) for paragraph (b) substitute—
“(b)
satisfies the condition specified in Schedule 3, Part I,
paragraph 5A.”

Pensions Bill
Schedule 1 — State pension: consequential and related amendments
Part 1 — Category A and B retirement pensions: single contribution condition
27

3     (1)
Section 48B of the SSCBA (Category B retirement pension for surviving
spouse or civil partner) is amended as follows.
      (2)
In subsection (1) for “the conditions specified in Schedule 3, Part I,
paragraph 5” substitute “the relevant conditions or condition”.
      (3)
After subsection (1) insert—
5
“(1ZA)
In subsection (1) above “the relevant conditions or condition”
means—
(a)
in a case where the spouse—
(i)
died before 6th April 2010, or
(ii)
died on or after that date having attained pensionable
10
age before that date,

the conditions specified in Schedule 3, Part I, paragraph 5;
(b)
in a case where the spouse died on or after that date without
having attained pensionable age before that date, the
condition specified in Schedule 3, Part I, paragraph 5A.”
15
      (4)
In subsection (1A) for “the conditions specified in Schedule 3, Part I,
paragraph 5” substitute “the condition specified in Schedule 3, Part I,
paragraph 5A”.
4
In section 60 of the SSCBA (complete or partial failure to satisfy contribution
conditions) after subsection (8) insert—
20
“(9)
References in this section to a Category A or Category B retirement
pension do not include one to which Schedule 3, Part I, paragraph 5A
applies.”
5
After section 60 of the SSCBA insert—
“60A
Failure to satisfy contribution condition in paragraph 5A of Schedule 3
25
(1)
Subsection (2) below applies if the contribution condition in
Schedule 3, Part I, paragraph 5A is not satisfied in relation to a
benefit to which that paragraph applies.
(2)
A person who would have been entitled to the benefit had the
condition been satisfied shall nevertheless be entitled to a prescribed
30
proportion of that benefit in respect of each of the years of the
contributor’s working life that falls within subsection (3) below.
(3)
A year of the contributor’s working life falls within this subsection if
it is a year in relation to which the requirements in paragraph
5A(2)(a) and (b) of Part I of Schedule 3 are satisfied.
35
(4)
“The contributor” means the person by whom the condition is to be
satisfied.
(5)
In any case where—
(a)
an employed earner who is married or a civil partner dies on
or after 6th April 2010 as a result of—
40
(i)
a personal injury of a kind mentioned in section 94(1)
below, or
(ii)
a disease or injury such as is mentioned in section
108(1) below, and

Pensions Bill
Schedule 1 — State pension: consequential and related amendments
Part 3 — Contributions credits for relevant parents and carers
28

(b)
the contribution condition specified in Schedule 3, Part I,
paragraph 5A is not satisfied in respect of the employed
earner,

that condition shall be taken to be satisfied for the purposes of the
entitlement of the employed earner’s widow, widower, or surviving
5
civil partner to a Category B retirement pension payable by virtue of
section 48B.
(6)
In subsections (1) to (3) any reference—
(a)
to the contribution condition in Schedule 3, Part I, paragraph
5A, or
10
(b)
to the requirements of paragraph 5A(2)(a) and (b),

includes a reference to that condition or those requirements as
modified by virtue of paragraph 5A(4).”
Part 2
Category B retirement pension: removal of restriction on entitlement
15
6
In section 54 of the SSCBA (Category A and B retirement pensions:
supplemental provisions) omit subsection (3) (election to defer pension
entitlement requires consent of other party to marriage etc.).
7
In section 55 of the SSCBA (pension increase or lump sum where pensions
entitlement deferred) in subsection (3) for paragraph (a) substitute—
20
“(a)
does not become entitled to that pension by reason only of
not satisfying the conditions of section 1 of the
Administration Act (entitlement to benefit dependent on
claim), or”.
8
In Schedule 5 to the SSCBA (pension increase or lump sum where pensions
25
entitlement deferred) in paragraph 8, omit sub-paragraph (3) (construction
of references where person’s pension linked to contributions of other party
to marriage or civil partnership).
Part 3
Contributions credits for relevant parents and carers
30
Social Security Contributions and Benefits Act 1992 (c. 4)
9
In section 22 of the SSCBA (earnings factors) after subsection (5) (regulations
may provide for crediting of contributions) insert—
“(5A)
Section 23A makes provision for the crediting of Class 3
contributions for the purpose of determining entitlement to the
35
benefits to which that section applies.”
10
In section 176 of the SSCBA (parliamentary control) in subsection (1)
(regulations and orders subject to affirmative procedure) after paragraph (a)
insert—
“(aa)
the first regulations made by virtue of section 23A(3)(c);”.
40
Welfare Reform Act 2007
11
In Part 1 of Schedule 1 to the Welfare Reform Act 2007 (employment and

Pensions Bill
Schedule 1 — State pension: consequential and related amendments
Part 5 — Up-rating of basic pension etc. and standard minimum guarantee by reference to earnings
29

support allowance: additional conditions) in paragraph 1 (conditions
relating to national insurance) in sub-paragraph (5) (meaning of “benefit”)
after paragraph (c) insert—
“(ca)
credits under section 23A of that Act,”.
Part 4
5
Category A and Category C retirement pensions: abolition of adult
dependency increases
12
In section 30B of the SSCBA (incapacity benefit: rate) in subsection (3) omit
paragraph (b) (increase under section 83 or 85 to be disregarded in
determining rate of incapacity benefit).
10
13
In section 78 of the SSCBA (Categories C and D retirement pensions and
other benefits for aged) in subsection (4) omit paragraph (d) (increase under
section 83 or 85 to be disregarded in determining appropriate weekly rate of
Category D retirement pension).
14
In section 88 of the SSCBA (increases to be in respect of only one adult
15
dependant) for “under or by virtue of sections 83 to 86A” substitute “by
virtue of section 86A”.
15
In section 89 of the SSCBA (meaning of earnings for purposes of provisions
relating to increases in benefits) in each of subsections (1) and (1A), for
“sections 82 to 86A” substitute “sections 82 and 86A”.
20
16
In section 114 of the SSCBA (persons maintaining dependants etc.) in
subsection (4) (amounts paid by way of maintenance etc. to be treated as
contributions for the purposes of specified provisions) omit “to 84”.
17
In section 149 of the SSCBA (pensioners’ entitlement to Christmas bonus:
supplementary) in subsection (3) (circumstances in which persons to be
25
treated as entitled to increase in payment of a qualifying benefit) in
paragraph (b) omit “section 83(2) or (3) above or”.
18
In Part 4 of Schedule 4 to the SSCBA (rates of increases for dependants)—
(a)
in paragraph 5 (Category A or B retirement pension) column (3), for
“50.50” substitute “—”;
30
(b)
in paragraph 6 (Category C retirement pension) column (3), for
“30.20” substitute “—”.
Part 5
Up-rating of basic pension etc. and standard minimum guarantee by reference
to earnings
35
Social Security Contributions and Benefits Act 1992 (c. 4)
19
In Schedule 5 to the SSCBA (pension increase or lump sum where
entitlement to retirement pension is deferred) in paragraph 2 (pension
increase where entitlement deferred) in sub-paragraph (7) (increase to take
account of up-rating of pensions) after “section 150” insert “or 150A”.
40

Pensions Bill
Schedule 1 — State pension: consequential and related amendments
Part 5 — Up-rating of basic pension etc. and standard minimum guarantee by reference to earnings
30

Social Security Administration Act 1992 (c. 5)
20
In section 150 of the Administration Act (annual up-rating of benefits) in
subsection (10)(a)(i) (when order is to take effect) after “the tax year” insert
“following that in which the order is made”.
21
In section 152 of that Act (rectification of mistakes in orders under section
5
150)—
(a)
after subsection (1) insert—
“(1A)
If the Secretary of State is satisfied that such a mistake has
occurred in the preparation of the previous order under
section 150A above, he may by order vary the amount of any
10
one or more of the amounts referred to in subsection (1) of
that section by increasing or reducing it to the level at which
it would have stood had the mistake not occurred.”;
(b)
in the sidenote, after “150” insert “or 150A”.
22
In section 155 of that Act (effect of alteration of rates of benefit under Parts 2
15
to 5 of the SSCBA) in subsection (1) (when section has effect) in paragraph
(b) after “150” insert “, 150A”.
23
In section 155A of that Act (power to anticipate pensions up-rating order) in
subsection (1) (power arises where statement made to Commons of amounts
of proposed increase in order under section 150) in paragraph (a), for “150
20
above” substitute “150 or 150A above (as the case may be)”.
24
In section 159 of that Act (effect of alteration in the component rates of
income support) in subsection (5), in paragraph (b) of the definition of
“alteration”—
(a)
after “150” (where it first occurs) insert “or 150A”;
25
(b)
in sub-paragraph (ii) after “150” insert “, 150A”.
25
In section 159A of that Act (effect of alteration of rates of a jobseeker’s
allowance) in subsection (5), in paragraph (b) of the definition of
“alteration”, after each occurrence of “section 150” insert “or 150A”.
26
In section 159B of that Act (effect of alterations affecting state pension
30
credit)—
(a)
in subsection (4) (power to anticipate up-rating of state pension
credit) in paragraph (a) after “section 150” insert “, 150A”;
(b)
in subsection (6), in paragraph (b) of the definition of “alteration”—
(i)
after “150” (where it first occurs) insert “or 150A”;
35
(ii)
after “150” (where it next occurs) insert “, 150A”.
27
In section 159C of that Act as inserted by the Welfare Reform Act 2007 (effect
of alteration of rates of an employment and support allowance) in subsection
(6), in paragraph (b) of the definition of “alteration”—
(a)
after “150” (where it first occurs) insert “or 150A”;
40
(b)
after “150” (where it next occurs) insert “, 150A”.
28
In section 189 of that Act (regulations and orders - general) in subsection (8)
(orders not to be made without consent of Treasury) after “150,” insert
“150A,”.

Pensions Bill
Schedule 1 — State pension: consequential and related amendments
Part 7 — Additional pension: simplified accrual rates
31

29
In section 190 of that Act (parliamentary control of orders and regulations)
in subsection (1)(a) (orders subject to the affirmative procedure) after “150,”
insert “150A,”.
30
In Part 1 of Schedule 7 to that Act (regulations not requiring prior
submission to the Social Security Advisory Committee) in paragraph 3 (up-
5
rating etc.) after “section 150” insert “or 150A”.
31
In Part 2 of that Schedule (regulations not requiring prior submission to the
Industrial Injuries Advisory Council) in paragraph 12 for “or 150” substitute
“, 150 or 150A”.
Part 6
10
Deemed earnings factors for purposes of additional pension
32
In section 22 of the SSCBA (earnings factors) at the end of subsection (2A)
(derivation of earnings factors for purposes of calculating additional
pension) insert—

“This subsection does not affect the operation of sections 44A and
15
44B (deemed earnings factors).”
33    (1)
Section 44A of the SSCBA (deemed earnings factors) is amended as follows.
      (2)
Before subsection (1) insert—
“(A1)
Subsections (1) to (4) below apply to the first appointed year or any
subsequent tax year before 2010-11.”
20
      (3)
In subsection (1) (amount of deemed earnings factor for purposes of section
44(6)(za)) after “a relevant year” insert “to which this subsection applies”.
      (4)
After subsection (4) insert—
“(4A)
The following do not apply to a pensioner attaining pensionable age
on or after 6th April 2010—
25
(a)
the requirement referred to in subsection (2)(d) above, and
(b)
subsections (3) and (4) above.”
Part 7
Additional pension: simplified accrual rates
Social Security Contributions and Benefits Act 1992 (c. 4)
30
34
In section 176 of the SSCBA (parliamentary control)—
(a)
in subsection (1)(c) (orders subject to affirmative procedure) at the
appropriate place insert—
“section 122(8);”;
(b)
in subsection (4) (certain orders not subject to parliamentary
35
procedure) after “second appointed year” insert “or designating the
flat rate introduction year”.
Pension Schemes Act 1993 (c. 48)
35
In section 12B of the Pension Schemes Act 1993 (reference scheme)—

Pensions Bill
Schedule 1 — State pension: consequential and related amendments
Part 7 — Additional pension: simplified accrual rates
32

(a)
in subsection (5) (definition of earner’s qualifying earnings) in
paragraph (b), for “the upper earnings limit for that year multiplied
by fifty-three” substitute “the applicable limit”;
(b)
in subsection (7), before the definition of “normal pension age”
insert—
5
“the applicable limit” means—
(a)
in relation to a tax year before the flat rate
introduction year, the upper earnings limit for
the year multiplied by 53;
(b)
in relation to the flat rate introduction year or
10
any subsequent tax year, the upper accrual
point;”.
36
In section 41 of that Act (reduced rates of Class 1 contributions)—
(a)
in subsection (1) (earnings relevant for subsections (1A) and (1B)
limited by upper earnings limit) for “the current upper earnings
15
limit” substitute “the applicable limit”;
(b)
after that subsection insert—
“(1ZA)
In subsection (1)—
(a)
“the applicable limit”—
(i)
in relation to a tax week falling in a tax year
20
before the flat rate introduction year, means
the upper earnings limit for the week in
question;
(ii)
in relation to a tax week falling in the flat rate
introduction year or any subsequent tax year,
25
means the upper accrual point divided by 52;
and
(b)
“prescribed”—
(i)
in relation to the lower or upper earnings
limit, means (in accordance with section 5(4)
30
of the Social Security Contributions and
Benefits Act 1992) prescribed under that
provision;
(ii)
in relation to the amount mentioned in
paragraph (a)(ii) above, means (in accordance
35
with section 181) prescribed by regulations
under this Act.”
37    (1)
In section 181(1) of that Act (general interpretation) insert at the appropriate
places—
““the flat rate introduction year” has the meaning given by section 122
40
of the Social Security Contributions and Benefits Act 1992;”
““the upper accrual point” has the meaning given by section 122 of the
Social Security Contributions and Benefits Act 1992;”.
38
In Schedule 4 to that Act (priority in bankruptcy etc.) in paragraph 2
(employer’s contributions to occupational pension scheme)—
45
(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