National Insurance Service Companies (clauses 70-71)

This measure to prevent the use of an intermediary (e.g. a service company or partnership) as a form of National Insurance contribution avoidance is expected to lead to additional revenue from National Insurance contributions of £197 million in 2000/01 rising to £216 million in the long run. Operational expenditure on these measures is expected to be £0.5 million in 2000/01 falling to £55,000 in the long run. It is expected that this will result in 22 additional posts in 2000/01 and 2 additional post in the long run.

Measures to reduce under-occupation by Housing Benefit claimants (clause 74)

The pilots are expected to have a net benefit expenditure increase of around £200,000 per year over a three year period. There is operational expenditure in the form of Local Authority expenditure of £45,000 per year. Operational expenditure within the DSS on evaluation of the pilots will be between £50,000 and £75,000 over the three years.

Measures with no significant financial effects

The following measures in the Bill are not expected to have any significant financial effect. Minor increases in operational expenditure, for example, as a result of changes required to forms and process will be managed within existing allocations.

Attendance Allowance (clause 61)

Sharing of functions as regards claims and information and supply of information for certain purposes (clauses 66-67)

Supply of information for child support purposes (clause 75)

Contributions and pensions administration (clause 76)

Authorisation of certain expenditure (clause 77)

Public Service Staffing Effects

It is not possible to provide an estimate of the overall public-service staffing effects of the Bill, since it is intended that a key measure, the introduction of work-focused interviews, should be piloted first and its full staffing implications will only be settled once the pilots have been evaluated. Where individual measures have an effect which is identifiable at this stage this is noted in the estimate of financial effects.

SUMMARY OF REGULATORY IMPACT ASSESSMENT

Six areas of the Bill are expected to have significant-or potentially significant-effects for businesses, charities or voluntary bodies: the three main changes to pensions law; the provision to take account of pension income when assessing Incapacity Benefit; the raised starting point for paying National Insurance contributions; and the power to counter National Insurance avoidance where services are provided through an intermediary. A full Regulatory Impact Assessment for the Bill is available in the library of each House of Parliament, and on the DSS web site (http://www.dss.gov.uk), but the following paragraphs summarise the main points.

Stakeholder pension schemes (Part I)

Stakeholder pension schemes are intended to provide good value private pensions for those who do not presently have access to them, or whose existing pensions are poor value for money. There are 4 million employees in the target group for these schemes (of whom 3 million are currently in SERPS and 1 million are self-employed).

If employers do not have an occupational scheme for all employees they will have to provide access to at least one stakeholder scheme. Where all employees have earnings below the Lower Earnings Limit and the employer does not deduct National Insurance contributions the access requirement will not apply. So the main impact will be on employers already making deductions from employees' pay.

Main recurring employer costs should be for providing information about stakeholder pension schemes, making deductions of contributions from pay, and for passing them to a stakeholder scheme or a central clearing house. Estimates of these costs range from £10 to £25 a year per contributing employee.

Initial costs for employers include setting up arrangements for payroll deductions and sending them to the scheme or clearing house. It is likely that some stakeholder providers will offer employers a payroll deduction service in order to attract business. The cost of changing an existing payroll system would depend on how sophisticated the employer's current system is - many small employers may require only minor changes to simple clerical systems, whilst others may need changes to payroll software. It is likely that most computer payroll systems will be able to cope with such changes without substantial cost. Estimated costs for an employer could be from £20 to £1,000, depending on the size of the employer and how much work is required to change their systems.

Employers will be required to nominate a scheme and pass information about it to employees. They will have to consult their workforce about the choice but selection costs should be almost entirely within the employer's control - he could simply accept an approach from a provider or scheme, or he could be more active, possibly with research into a number of schemes. Employer costs could vary from £25 to £2,000 depending on employee numbers and how active the selection process is. For most employers, costs will be at the lower end of this range. It is likely that most providers will produce leaflets and other materials to publicise and promote their stakeholder pension schemes, and that they will offer these packages as a means of 'recruiting' employers. The impact on employers themselves of publicising stakeholder schemes should therefore be small, the only costs being for leaflet distribution and handling general queries.

Other pensions changes (Part II)

There are expected to be total extra compliance costs of around £1.6m a year for employers, and there will be one-off set up costs of about £1.9m for insurance companies. Clause 17: Compensating occupational pension schemes

It is estimated that the changes to the compensation scheme could increase the maximum costs of the levy by about 25 pence per scheme member or a total of £2.5 million a year. However, it should be borne in mind that no claims for compensation have been made since the provisions came into force in April 1997 and there is therefore no compensation levy on schemes this year.

Pension sharing on divorce (Parts III-IV)

Pension sharing has financial implications for business, for Government and for individuals. It is very difficult to quantify these for a number of reasons. Pension sharing will not be compulsory, so it is not possible to predict precisely the number of divorces in which it will be used. Even if it were compulsory the overall assets, the precise financial settlement, and therefore the size of the pension transfer, will be particular to the individual divorce case.

Therefore a range of assumptions has been used to make estimates of the overall cost implications of pension sharing. They are set out in full Regulatory Impact Assessment.

Compliance costs for business

Pension sharing will mainly affect:

employers offering occupational pension schemes and their scheme providers. Around 10.5 million employees are members of occupational pension schemes (including public service schemes);

providers of personal pensions. Around 10 million employed and self-employed earners have personal pensions, from over 100 providers;

family lawyers. As family lawyers already consider pensions in divorce settlements there will be no ongoing impact on family lawyers over and above any initial work to familiarise themselves with pension sharing.

The policy has been designed so far as possible to fit alongside existing pensions and family law to minimise the additional costs to employers, the pensions industry and family lawyers.

The potential impact on small businesses and charities has been considered. The costs of pension sharing do not fall disproportionately on these groups. Indeed, as small employers are less likely to provide pension schemes for their employees, it is anticipated that the majority of costs of pension sharing will fall on larger employers.

It is expected that there will be initial set-up costs for pension providers of £20 million (1996/7 prices), followed by annual administrative costs of around £15 million in the long term. However, as the legislation allows pension schemes to recover from the divorcing couple the reasonable costs of implementing pension sharing orders and agreements, the net additional ongoing administration costs to private pension providers are assumed to be nil.

Incapacity Benefit: reduction for pension payments (clause 58)

Some costs would arise for employers if the proposal to take account of permanent health insurance (PHI) payments resulted in an increase in insurance premiums.

It is estimated that there are about 2.4 million people covered by PHI policies: 1.2million people are individual policy holders and the rest are in group schemes. The Government made it clear in the consultation document "A New Contract for Welfare: SUPPORT FOR DISABLED PEOPLE" that payments from individual PHI policies would not be deducted from Incapacity Benefit.

Responses to the consultation document have made it clear that group PHI policies are largely used to fund occupational sick pay schemes where a contract of employment continues. It is not intended to take into account such payments when assessing entitlement to Incapacity Benefit. Under the proposals, payments under group PHI contracts will only be deducted from Incapacity Benefit if they are made after the contract of employment has ceased: i.e. if they are analogous to occupational pensions. Limiting the change to this very special form of PHI should mean that any costs to employers who fund group PHI schemes are likely to be negligible.

National Insurance contributions: new primary threshold (clauses 68 & 69)

These changes will reduce the National Insurance contributions of some 16 million employees by up to £1.80 a week over 2 years, while securing their contributory benefit entitlement. The changes are not expected to introduce any significant additional administrative or revenue costs for employers. They will lead to small transitional administration costs for employers in adapting to the new arrangements, but should ease administration in the longer term by taking 960,000 employees out of paying contributions and aligning the NICs rules more closely with those for tax.

Earnings of workers supplied by service companies etc. (clauses 70-71)

The Regulatory Impact Assessment estimates that the overall compliance cost for business could at the upper limit increase by £5.4 million (this covers the cost of complying both with the National Insurance measure provided for in this Bill and with the parallel tax changes due to be introduced next year). In addition, an estimated extra £220 million will be paid in National Insurance by businesses that fall under the new rules.

The estimates are based on the assumption that between 33,000 and 66,000 companies will end their service company arrangements and migrate to the client's payroll. The costs include a mixture of recurring and non-recurring costs, such as seeking professional advice, closing down the service company, setting up an employment contract and putting workers on the payroll. The figure also includes an estimate of the cost to those businesses who will not be caught by this measure but who will nevertheless seek advice.

COMMENCEMENT

Clause 83(3) and (4) set out which provisions of the Bill will come fully into force on Royal Assent, or come into force then for the purposes of making regulations only. All the other provisions are to be brought into force by commencement orders.

EUROPEAN CONVENTION ON HUMAN RIGHTS

Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). Baroness Hollis of Heigham, Parliamentary Under Secretary of State (Lords) for Social Security, has made the following statement:

In my view the provisions of the Welfare Reform and Pensions Bill are compatible with the Convention rights.

GLOSSARY

The Social Security Administration Act 1992: the Act that contains most of the rules and regulation-making powers to specify how social security benefits should be claimed, paid and administered. It consolidated the existing legislation in 1992, and has been amended subsequently. See also the Contributions and Benefits Act.

All Work Test

The test of incapacity used for the purposes of assessing entitlement to Incapacity Benefit and Severe Disablement Allowance (and the premiums for disability with Income Support and Council Tax Benefit). It is a functional test which assesses the claimant's ability to carry out a wide range of activities.

Clause 56 replaces the All Work Test with the "Personal Capability Assessment".

Annuity

An arrangement by which a life insurance company pays someone a regular income, usually for life, in return for a lump-sum premium.

Attendance Allowance (AA)

A non-contributory, tax-free, non-means-tested benefit paid to meet the extra costs arising from the care needs of elderly and disabled people. Paid at two rates: higher rate (needing care day and night) and lower rate (needing care day or night).

Clauses 60 and 61 make changes to the rules for AA and Disability Living Allowance.

Contributions and Benefits Act

The Social Security Contributions and Benefits Act 1992: contains most of the provisions for setting out the rules for National Insurance contributions and entitlement to social security benefits (with the main exception of Jobseeker's Allowance). It consolidated the existing legislation when it was introduced in 1992, and has been amended since then. Several clauses of this Bill have their effect by amending it. See also the Administration Act.

Contracting out

An arrangement under which members of a pension scheme which meets certain requirements, obtain rights in that scheme in place of their SERPS entitlement. National Insurance contributions for these employees are reduced or, in the case of an Appropriate Personal Pension (see Personal Pension), partly repaid to the scheme.

Disability Living Allowance (DLA)

A non-contributory, tax-free, non-means-tested benefit paid to meet the extra costs of care and mobility needs for people who become disabled before the age of 65. There are two components: a care component (paid at a higher, middle or lower rate) and a mobility component (paid at a higher or lower rate).

Clauses 60 and 61 make changes to the rules for DLA and Attendance Allowance.

Housing Benefit (HB)

An income-related (means-tested) benefit to provide help with the housing costs of private and public sector tenants.

Clause 74 introduces measures for a scheme to reduce the under-occupation of social housing by HB claimants.

Incapacity Benefit (IB)

A weekly benefit paid to people who are unable to work because of illness or disability, and have paid a specified amount of National Insurance contributions. Paid at 3 rates:

a short-term lower rate: payable to those who do not qualify for Statutory Sick Pay, for the first 28 weeks of incapacity;
a short-term higher rate: payable from 28 weeks to 52 weeks of incapacity;
a long-term rate: payable after 52 of incapacity.

during the first 28 weeks (in the case of people with a recent work record) by the "Own Occupation Test", which assesses people's ability to do their usual job;

after 28 weeks (or from the start of the claim for people without a recent work record), through the "All Work Test": a functional test which assesses the claimant's ability to perform a wide range of activities.

Clauses 57 and 58 amend the rules for IB; clause 56 introduces a modified qualifying test.

Income Support (IS)

An income-related (means-tested) benefit for people who are not in work (or working less than 16 hours a week) and whose income is less than a specified level. It is calculated on the basis of age, family membership and other prescribed circumstances.

Jobseekers Act

The Jobseekers Act 1995: established Jobseeker's Allowance. Amended by clause 55, and Schedules 7 and 8.

Jobseeker's Allowance (JSA)

Jobseeker's Allowance is the social security benefit for people who are unemployed or who are working for less than 16 hours per week. To qualify for JSA a jobseeker must be capable of work, available for work, actively seeking work, and must enter into a "Jobseeker's Agreement" which sets out the steps he will take in order to find work. Jobseekers who have paid sufficient National Insurance contributions can receive contribution-based JSA at a personal rate for up to six months. Those who do not qualify for contribution-based JSA, or whose needs are not met by the contribution-based allowance, can claim income-based JSA for themselves and their dependants subject to a means test. Income-based JSA is paid for as long as needed, provided that the qualifying conditions continue to be met.

Schedules 7 and 8 Part IV make particular changes to the rules for JSA.

Lower Earnings Limit (LEL)

The weekly level of earnings below which there is not a liability to pay National Insurance contributions. It is also the level at which people secure entitlement to basic contributory benefits. Weekly earnings above this point (and up to the Upper Earnings Limit) accrue entitlement to SERPS or to contracted-out rebates.

Clauses 68 and 69 (and Schedules 9 and 10) increase the starting point for paying contributions from the LEL to a new "primary threshold". Benefit entitlement will continue to build up on earnings at or above the LEL.

Maternity Allowance

Weekly benefit paid by the Benefits Agency to mothers-to-be who do not qualify for Statutory Maternity Pay, or who are self-employed. Clause 48 extends entitlement to women earning below the Lower Earnings Limit but at least £30 a week.

National Insurance contributions

Contributions payable by those in work and their employer into the National Insurance fund, which are used to pay contributory social security benefits to qualifying individuals. Self-employed people pay a lower rate but have more limited rights to benefits. Contributions are divided into four main classes which bring access to different benefit entitlements:

Class 1: Payable by employed earners on all earnings between the Lower Earnings Limit and Upper Earnings Limit, and by employers on all earnings above the Lower Earnings Limit. Class 1 contributions give access to all National Insurance benefits, both at a flat rate and with earnings-related increases where relevant (provided that the individual meets the specific conditions of entitlement for each benefit). Clauses 68-71 make changes to the rules for Class 1 contributions.

Class 1A : contributions paid by employers in respect of employees' car and fuel benefits. The charge is based on the cash equivalent of the car benefit and the car fuel benefit provided for private use of the employee.

Class 1B : contributions paid on settlements (PAYE Settlement Agreements) made with the Inland Revenue by an employer. This class of contributions is being introduced in April 1999.

Class 2: Flat-rate contribution paid by self-employed earners. Benefits are payable at the basic rate only, and there is no entitlement to certain benefits.

Class 3: Flat-rate voluntary contributions payable for any period when people were not liable to pay Class 1 or 2 contributions because they were not employed or were outside the country.

Class 4: Profit-related additional contributions payable by self-employed earners with profits above an annual threshold, up to an upper threshold equivalent to the Upper Earnings Limit for Class 1 contributors. These contributions do not give entitlement to any additional benefits (they are intended to ensure that those who can, contribute an amount which more accurately reflects the levels paid by employed earners and their employers).

National Insurance number

A unique number given to every individual of working age to keep track of their National Insurance contributions. Benefit claimants are expected to produce a national insurance number (or sufficient evidence for one to be allocated) as a condition of a claim. Clause 64 extends this requirement to Child Benefit.

Occupational pension scheme

A scheme organised by an employer or on behalf of a group of employers to provide pensions and/or other benefits for, or in respect of, one or more employees on leaving service or on death or retirement.
Usually there are two types of occupational pension schemes:

final salary schemes (also referred to as a salary-related scheme or defined benefit scheme). The benefits are calculated by reference to the employee's salary at or near the time of retirement or on leaving service, and the length of pensionable service.

money purchase schemes (also known as defined contribution schemes). Contributions are invested to produce a capital sum on retirement. The capital sum (less any tax-free lump sum) is used to purchase an annuity to provide a pension.

Occasionally there are hybrid schemes. Both types of occupational pension scheme commonly provide, in addition to other benefits, a lump sum life assurance benefit based on a multiple of the member's salary.

Occupational Pensions Regulatory Authority (OPRA)

A statutory body, created by the Pensions Act 1995, responsible for ensuring that occupational pension schemes comply with the requirements of the relevant legislation. It has powers of investigation and can impose penalties ranging from prohibition from acting as a trustee, imposition of fines to criminal prosecution.

Pension Schemes Act 1993 ("the 1993 Act")

Consolidates most of the rules for occupational and personal pensions. Includes provisions for protecting scheme members and for contracting out of SERPS.

Pensions Act 1995 ("the 1995 Act")

This Act provides a framework of statutory obligations on employers, trustees, scheme professionals and others connected with pension schemes in order to provide greater security for scheme members.

The pensions clauses in this Bill make several amendments to this Act.

Personal pension

An arrangement between an individual who is self-employed, in non-pensionable employment or who is not a member of an employer's scheme, and a pension provider (such as an insurance company) which enables the individual to make provision for a pension on a money purchase basis. See also occupational pension scheme.

An Appropriate Personal Pension (APP) is a personal pension scheme that has been certified as suitable for contracting out of SERPS.

Severe Disablement Allowance (SDA)

A non-contributory, non means-tested benefit, paid to people who cannot work because of illness or disability, and who have been unable to pay sufficient National Insurance contributions to qualify for Incapacity Benefit (IB). For people who become incapable of work before the age of 20, the qualifying test of "incapacity" is the same for SDA as for IB-but those aged 20 and over must additionally be assessed by a doctor as "80% disabled".

Clause 60 abolishes SDA for new claimants, while providing the power to protect the benefit for existing claimants. Clause 59 allows 16-19 year olds who would currently receive SDA to receive Incapacity Benefit instead.

State Earnings Related Pension Scheme (SERPS)

A scheme introduced in 1978 which provides an additional state pension component, calculated by reference to the employee's earnings, on top of the basic state pension (the flat-rate pension paid to people who have met the minimum National Insurance contribution requirements).

Upper Earnings Limit (UEL)

The level of weekly earnings above which there is no liability for employee National Insurance contributions. It sets the upper limit for the weekly earnings on which SERPS accrue and which qualify for contracted-out rebates. See also Lower Earnings Limit.

ANNEX A: MATRIMONIAL CAUSES ACT 1973, AS AMENDED

This extract shows the text of Part II of the Matrimonial Causes Act 1973 as amended by this Bill. It has no authoritative status. Text to be inserted by Bill appears in bold italics; text to be removed appears struck out. Refer to the commentary on Parts III and IV (pension sharing on divorce) for details.

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Part II: Financial Relief for Parties to Marriage and Children of Family

Financial provision and property adjustment orders

Financial provision and property adjustment orders.

21.-(1) For the purposes of this Act, a financial provision order is-

(a) an order that a party must make in favour of another person such periodical payments, for such term, as may be specified (a periodical payments order");

(b) an order that a party must, to the satisfaction of the court, secure in favour of another person such periodical payments, for such term, as may be specified (a "secured periodical payments order");

(c) an order that a party must make a payment in favour of another person of such lump sum or sums as may be specified (an "order for the payment of a lump sum").

(2) For the purposes of this Act, a property adjustment order is-

(a) an order that a party must transfer such of his or her property as may be specified in favour of the other party or a child of the family;

(b) an order that a settlement of such property of a party as may be specified must be made, to the satisfaction of the court, for the benefit of the other party and of the children of the family, or either or any of them;

(c) an order varying, for the benefit of the parties and of the children of the family, or either or any of them, any marriage settlement, other than one in the form of a pension arrangement (within the meaning of section 25D below);

(d) an order extinguishing or reducing the interest of either of the parties under any marriage settlement, other than one in the form of a pension arrangement (within the meaning of section 25D below).

(2A) For the purposes of this Act, a pension sharing order is an order which-

(a) provides that one party's-

(i) shareable rights under a specified pension arrangement, or

(ii) shareable state scheme rights,

be subject to pension sharing for the benefit of the other party, and

(b) specifies the percentage value to be transferred.

(3) Subject to section 40 below, where an order of the court under this Part of this Act requires a party to make or secure a payment in favour of another person or to transfer property in favour of any person, that payment must be made or secured or that property transferred-

(a) if that other person is the other party to the marriage, to that other party; and

(b) if that other person is a child of the family, according to the terms of the order-

(i) to the child; or

(ii) to such other person as may be specified, for the benefit of that child.

(4) References in this section to the property of a party are references to any property to which that party is entitled either in possession or in reversion.

(5) Any power of the court under this Part of this Act to make such an order as is mentioned in subsection (2)(b) to (d) above is exercisable even though there are no children of the family.

(5A) In subsection (2A)-

(a) the reference to shareable rights under a pension arrangement is to rights in relation to which pension sharing is available under Chapter I of Part IV of the Welfare Reform and Pensions Act 1999, or under corresponding Northern Ireland legislation, and (b) the reference to shareable state scheme rights is to rights in relation to which pension sharing is available under Chapter II of Part IV of the Welfare Reform and Pensions Act 1999, or under corresponding Northern Ireland legislation.

(6) In this section-

"marriage settlement" means an ante-nuptial or post-nuptial settlement made on the parties (including one made by will or codicil); "party" means a party to a marriage; and

"specified" means specified in the order in question.

Ancillary relief in connection with divorce proceedings, etc.

Financial provision orders: divorce and separation

22A. [This section is not amended by the Bill.]

Restrictions affecting section 22A

22B. [This section is not amended by the Bill.]

Financial provision orders: nullity

23. [This section is not amended by the Bill.]

Property adjustment orders: divorce and separation

23A. [This section is not amended by the Bill.]

Restrictions affecting 23A

23B. [This section is not amended by the Bill.]

Property adjustment orders: nullity of marriage

24. [This section is not amended by the Bill.]

Orders for sale of property

24A. [This section is not amended by the Bill.]

Pension sharing orders: divorce.

24B.-(1) On an application made under this section, the court may at the appropriate time make one or more pension sharing orders. (2) The "appropriate time" is any time-

(a) after a statement of marital breakdown has been received by the court and before any application for a divorce order or for a separation order is made to the court by reference to that statement;

(b) when an application for a divorce order has been made under section 3 of the 1996 Act and has not been withdrawn;

(c) when an application for a divorce order has been made under section 4 of the 1996 Act and has not been withdrawn;

(d) after a divorce order has been made.

(3) The court shall exercise its powers under this section, so far as is practicable, by making on one occasion all such provision as can be made by way of one or more pension sharing orders in relation to the marriage as it thinks fit.

(4) This section is to be read subject to any restrictions imposed by this Act and to section 19 of the 1996 Act.

Restrictions affecting section 24B.

24C.-(1) No pension sharing order may be made under section 24B above so as to take effect before the making of a divorce order in relation to the marriage.

(2) The court may not make a pension sharing order under section 24B above at any time while the period for reflection and consideration is interrupted under section 7(8) of the 1996 Act.

(3) No pension sharing order may be made under section 24B above by virtue of a statement of marital breakdown if, by virtue of section 5(3) or 7(9) of the 1996 Act (lapse of divorce process), it has ceased to be possible-

(a) for an application to be made by reference to that statement; or

(b) for an order to be made on such an application.

(4) No pension sharing order may be made under section 24B above after a divorce order has been made, except- (a) in response to an application made before the divorce order was made; or

(b) on a subsequent application made with the leave of the court.

(5) A pension sharing order under section 24B above may not be made in relation to a pension arrangement which-

(a) is the subject of a pension sharing order in relation to the marriage, or

(b) has been the subject of pension sharing between the parties to the marriage.

(6) A pension sharing order under section 24B above may not be made in relation to shareable state scheme rights if- (a) such rights are the subject of a pension sharing order in relation to the marriage, or

(b) such rights have been the subject of pension sharing between the parties to the marriage.

(7) A pension sharing order under section 24B above may not be made in relation to the rights of a person under a pension arrangement if there is in force a requirement imposed by virtue of section 25B or 25C below which relates to benefits or future benefits to which he is entitled under the pension arrangement.

(8) In this section, "period for reflection and consideration" means the period fixed by section 7 of the 1996 Act. Pension sharing orders: nullity of marriage.

24D.-(1) On or after granting a decree of nullity of marriage (whether before or after the decree is made absolute), the court may, on

an application made under this section, make one or more pension sharing orders in relation to the marriage.

(2) The court shall exercise its powers under this section, so far as is practicable, by making on one occasion all such provision as can be made by way of one or more pension sharing orders in relation to the marriage as it thinks fit.

(3) Where a pension sharing order is made under this section on or after the granting of a decree of nullity of marriage, the order is not to take effect unless the decree has been made absolute.

(4) This section is to be read subject to any restrictions imposed by this Act.

Restrictions affecting section 24D.

24E.-(1) A pension sharing order under section 24D above may not be made in relation to a pension arrangement which-

(a) is the subject of a pension sharing order in relation to the marriage, or

(b) has been the subject of pension sharing between the parties to the marriage.

(2) A pension sharing order under section 24D above may not be made in relation to shareable state scheme rights if-

(a) such rights are the subject of a pension sharing order in relation to the marriage, or

(b) such rights have been the subject of pension sharing between the parties to the marriage.

(3) A pension sharing order under section 24D above may not be made in relation to the rights of a person under a pension arrangement if there is in force a requirement imposed by virtue of section 25B or 25C below which relates to benefits or future benefits to which he is entitled under the pension arrangement.

Pension sharing orders: duty to stay.

24F.-(1) No pension sharing order may be made so as to take effect before the end of such period after the making of the order as may be prescribed by regulations made by the Lord Chancellor.

(2) The power to make regulations under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Pension sharing orders: apportionment of charges.

24G. If a pension sharing order relates to rights under a pension arrangement, the court may include in the order provision about the apportionment between the parties of any charge under section 30(1) of the Welfare Reform and Pensions Act 1999 (charges in respect of pension sharing costs), or under corresponding Northern Ireland legislation.

Matters to which court is to have regard in deciding how to exercise its powers under ss 23, 24 and 24A

25.-(1) It shall be the duty of the court in deciding whether to exercise its powers under any of sections 22A to 24AD above and, if so, in what manner, to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.

(2) As regards the exercise of the powers of the court under section 22A or 23 above to make a financial provision order in favour of a party to a marriage or the exercise of its powers under section 23A, 24, or 24A, 24B or 24D above in relation to a party to the marriage, the court shall in particular have regard to the following matters-

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;

(g) the conduct of each of the parties, whatever the nature of the conduct and whether it occurred during the marriage or after the separation of the parties or (as the case may be) dissolution or annulment of the marriage, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;

(h) the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

(3) As regards the exercise of the powers of the court under section 22A or 23 above to make a financial provision order in favour of a child of the family or the exercise of its powers under section 23A, 24 or 24A above in relation to a child of the family, the court shall in particular have regard to the following matters-

(a) the financial needs of the child;

(b) the income, earning capacity (if any), property and other financial resources of the child;

(c) any physical or mental disability of the child;

(d) the manner in which he was being and in which the parties to the marriage expected him to be educated or trained;

(e) the considerations mentioned in relation to the parties to the marriage in paragraphs (a), (b), (c) and (e) of subsection (2) above. (4) As regards the exercise of the powers of the court under any of sections 22A to 24A above against a party to a marriage in favour of a child of the family who is not the child of that party, the court shall also have regard-

(a) to whether that party assumed any responsibility for the child's maintenance, and, if so, to the extent to which, and the basis upon which, that party assumed such responsibility and to the length of time for which that party discharged such responsibility;

(b) to whether in assuming and discharging such responsibility that party did so knowing that the child was not his or her own;

(c) to the liability of any other person to maintain the child.

(5) In relation to any power of the court to make an interim periodical payments order or an interim order for the payment of a lump sum, the preceding provisions of this section, in imposing any obligation on the court with respect to the matters to which it is to have regard, shall not require the court to do anything which would cause such a delay as would, in the opinion of the court, be inappropriate having regard-

(a) to any immediate need for an interim order;

(b) to the matters in relation to which it is practicable for the court to inquire before making an interim order; and

(c) to the ability of the court to have regard to any matter and to make appropriate adjustments when subsequently making a financial provision order which is not interim.

Exercise of court's powers in favour of party to marriage on decree of divorce or nullity of marriage

25A.-(1) If the court decides to exercise any of its powers under any of sections 22A to 24AD above in favour of a party to a marriage (other than its power to make an interim periodical payments order or an interim order for the payment of a lump sum), it shall be the duty of the court to consider whether it would be appropriate so to exercise those powers that the financial obligations of each party towards the other will be terminated as soon after the grant of a divorce order or decree of nullity as the court considers just and reasonable.

(2) Where the court decides in such a case to make a periodical payments or secured periodical payments order in favour of a party to the marriage, the court shall in particular consider whether it would be appropriate to require those payments to be made or secured only for such term as would in the opinion of the court be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party.

(3) If the court-

(a) would have power under section 22A or 23 above to make a financial provision order in favour of a party to a marriage ("the first party"), but

(b) considers that no continuing obligation should be imposed on the other party to the marriage ("the second party") to make or secure periodical payments in favour of the first party,

it may direct that the first party may not at any time after the direction takes effect, apply to the court for the making against the second party of any periodical payments order or secured periodical payments order and, if the first party has already applied to the court for the making of such an order, it may dismiss the application.

(3A) If the court-

(a) exercises, or has exercised, its power under section 22A at any time before making a divorce order, and

(b) gives a direction under subsection (3) above in respect of a periodical payments order or a secured periodical payments order, it shall provide for the direction not to take effect until a divorce order is made.

Pensions

25B.-(1) The matters to which the court is to have regard under section 25(2) above include-

(a) in the case of paragraph (a), any benefits under a pension scheme arrangement which a party to the marriage has or is likely to have, and

(b) in the case of paragraph (h), any benefits under a pension scheme arrangement which, by reason of the dissolution or annulment of the marriage, a party to the marriage will lose the chance of acquiring,

and, accordingly, in relation to benefits under a pension scheme arrangement, section 25(2)(a) above shall have effect as if "in the foreseeable future" were omitted.

(2) In any proceedings for a financial provision order under section 22A or 23 above in a case where a party to the marriage has, or is likely to have, any benefit under a pension scheme, the court shall, in addition to considering any other matter which it is required to consider apart from this subsection, consider-

(a) whether, having regard to any matter to which it is required to have regard in the proceedings by virtue of subsection (1) above, such an order (whether deferred or not) should be made, and

(b) where the court determines to make such an order, how the terms of the order should be affected, having regard to any such matter;

(c) in particular, where the court determines to make such an order, whether the order should provide for the accrued rights of the party with pension rights ("the pension rights") to be divided between that party and the other party in such a way as to reduce the pension rights of the party with those rights and to create pension rights for the other party.

(3) The following provisions apply where, having regard to any benefits under a pension scheme

arrangement, the court determines to make an order under section 22A or 23 above.

(4) To the extent to which the order is made having regard to any benefits under a pension scheme arrangement, the order may require the trustees or managers of person responsible for the pension scheme arrangement in question, if at any time any payment in respect of any benefits under the scheme arrangement becomes due to the party with pension rights, to make a payment for the benefit of the other party.

(5) The amount of any payment which, by virtue of subsection (4) above, the trustees or managers are required to make under the order at any time shall not exceed the amount of the payment which is due at that time to the party with pension rights.

(5) The order must express the amount of any payment required to be made by virtue of subsection (4) above as a percentage of the payment which becomes due to the party with pension rights.

(6) Any such payment by the trustees or managers person responsible for the arrangement-

(a) shall discharge so much of the trustees or managers his liability to the party with pension rights as corresponds to the amount of the payment, and

(b) shall be treated for all purposes as a payment made by the party with pension rights in or towards the discharge of his liability under the order.

(7) Where the party with pension rights may require any benefits which he has or is likely to have under the scheme to be commuted, the order may require him to commute the whole or part of those benefits has a right of commutation under the arrangement, the order may require him to exercise it to any extent; and this section applies to the payment of any amount commuted any payment due in consequence of commutation in pursuance of the order as it applies to other payments in respect of benefits under the scheme arrangement.

(7A) The power conferred by subsection (7) above may not be exercised for the purpose of commuting a benefit payable to the party with pension rights to a benefit payable to the other party. (7B) The power conferred by subsection (4) or (7) above may not be exercised in relation to a pension arrangement which-

(a) is the subject of a pension sharing order in relation to the marriage, or

(b) has been the subject of pension sharing between the parties to the marriage.

(7C) In subsection (1) above, references to benefits under a pension arrangement include any benefits by way of pension, whether under a pension arrangement or not.

Pensions: lump sums

25C.-(1) The power of the court under section 22A or 23 above to order a party to a marriage to pay a lump sum to the other party includes, where the benefits which the party with pension rights has or is likely to have under a pension scheme arrangement include any lump sum payable in respect of his death, power to make any of the following provision by the order.

(2) The court may-

(a) if the trustees or managers of the pension scheme in question have person responsible for the pension arrangement in question has power to determine the person to whom the sum, or any part of it, is to be paid, require them him to pay the whole or part of that sum, when it becomes due, to the other party,

(b) if the party with pension rights has power to nominate the person to whom the sum, or any part of it, is to be paid, require the party with pension rights to nominate the other party in respect of the whole or part of that sum,

(c) in any other case, require the trustees or managers of the pension scheme person responsible for the pension arrangement in question to pay the whole or part of that sum, when it becomes due, for the benefit of the other party instead of to the person to whom, apart from the order, it would be paid.

(3) Any payment by the trustees or managers person responsible for the arrangement under an order made under section 22A or 23 above by virtue of this section shall discharge so much of the trustees, or managers, his liability in respect of the party with pension rights as corresponds to the amount of the payment.

(4) The powers conferred by this section may not be exercised in relation to a pension arrangement which-

(a) is the subject of a pension sharing order in relation to the marriage, or

(b) has been the subject of pension sharing between the parties to the marriage.

Pensions: supplementary

25D.-(1) Where-

(a) an order made under section 22A or 23 above by virtue of section 25B or 25C above imposes any requirement on the trustees or managers of a pension scheme ("the first scheme") and the party with pension rights acquires transfer credits under another pension scheme ("the new scheme") which are derived (directly or indirectly) from a transfer from the first scheme of all his accrued rights under that scheme (including transfer credits allowed by that scheme), and

(b) the trustees or managers of the new scheme have been given notice in accordance with regulations, the order shall have effect as if it has been made instead in respect of the trustees or managers of the new scheme; and in this subsection "transfer credits" has the same meaning as in the Pension Schemes Act 1993.

(1) Where-

(a) an order made under section 22A or 23 above by virtue of section 25B or 25C above imposes any requirement on the person responsible for a pension arrangement ("the first arrangement") and the party with pension rights acquires rights under another pension arrangement ("the new arrangement") which are derived (directly or indirectly) from the whole of his rights under the first arrangement, and

(b) the person responsible for the new arrangement has been given notice in accordance with regulations made by the Lord Chancellor,

the order shall have effect as if it had been made instead in respect of the person responsible for the new arrangement.

(2) Regulations may The Lord Chancellor may by regulations-

(a) in relation to any provision of sections 25B or 25C above which authorises the court making an order under section 22A or 23 above to require the trustees or managers of a pension scheme person responsible for a pension arrangement to make a payment for the benefit of the other party, make provision as to the person to whom, and the terms on which, the payment is to be made,

(ab) make, in relation to payment under a mistaken belief as to the continuation in force of a provision included by virtue of section 25B or 25C above in an order under section 22A or 23 above, provision about the rights or liabilities of the payer, the payee or the person to whom the payment was due,

(b) require notices to be given in respect of changes of circumstances relevant to such orders which include provision made by virtue of sections 25B and 25C above,

(ba) make provision for the person responsible for a pension arrangement to be discharged in prescribed circumstances from a requirement imposed by virtue of section 25B or 25C above,

(c) make provision for the trustees or managers of any pension scheme to provide, for the purposes of orders under section 22A or 23 above, information as to the value of any benefits under the scheme,

(d) make provision for the recovery of the administrative expenses of-

(i) complying with such orders, so far as they include provision made by virtue of sections 25B and 25C above, and

(ii) providing such information, from the party with pension rights or the other party,

(e) make provision for the value of any benefits under a pension scheme to be calculated and verified, for the purposes of orders under section 22A or 23 above, in a prescribed manner,

(e) make provision about calculation and verification in relation to the valuation of-

(i) benefits under a pension arrangement, or

(ii) shareable state scheme rights, for the purposes of the court's functions in connection with the exercise of its powers under any of sections 22A to 24D above.

and regulations made by virtue of paragraph (e) above may provide for that value to be calculated and verified in accordance with guidance which is prepared and from time to time revised by a prescribed person and approved by the Secretary of State.

(2A) Regulations under subsection (2)(e) above may include provision by reference to regulations under section 19 or 38(4) of the Welfare Reform and Pensions Act 1999.

(2B) Regulations under subsection (2) may make different provision for different cases.

(2C) The Secretary of State may by regulations-

(a) impose on the person responsible for a pension arrangement, or the Secretary of State, requirements with respect to the supply of information relevant to any of the court's powers under this part of this Act,

(b) make provision about calculation and verification in relation to the valuation of-

(i) benefits under a pension arrangement, or

(ii) shareable state scheme rights,

for the purposes of regulations under paragraph (a) above,

(c) make provision for the purpose of enabling the person responsible for a pension arrangement to recover prescribed charges in respect of-

(i) complying with an order under section 22A or 23 above, so far as it includes provision made by virtue of section 25B or 25C above, or

(ii) providing information in accordance with regulations under paragraph (a) above.

(2D) Regulations under subsection (2)(e) or (2C)(b) above may include provision for calculation or verification in accordance with guidance from time to time prepared by a person prescribed by the regulations.

(2E) Subsections (3) to (6) of section 66 of the Welfare Reform and Pensions Act 1999 (regulations) shall have effect in relation to power to make regulations under subsection (2C) above as they have effect in relation to power to make regulations under that Act.

(2F) Power to make regulations under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3) In this section and sections 25B and 25C above-

(a) references to a pension scheme include-

(i) a retirement annuity contract, or

(ii) an annuity, or insurance policy, purchased or transferred for the purpose of giving effect to rights under a pension scheme,

(b) in relation to such a contract or annuity, references to the trustees or managers shall be read as references to the provider of the annuity,

(c) in relation to such a policy, references to the trustees or managers shall be read as references to the insurer, and in section 25B(1) and (2) above, references to benefits under a pension scheme include any benefits by way of pension, whether under a pension scheme or not.

(4) In this section and sections 25B and 25C above-

"funded scheme" means a scheme under which the benefits are provided for by setting aside resources related to the value of the members' rights as they accrue (and 'unfunded scheme' shall be construed accordingly);

"the party with pension rights" means the party to the marriage who has or is likely to have benefits under a pension scheme and

"the other party" means the other party to the marriage,

"pension scheme" means an occupational pension scheme or a personal pension scheme (applying the definitions in section 1 of the Pension Schemes Act 1993, but as if the reference to employed earners in the definition of "personal pension scheme" were to any earners),

"prescribed" means prescribed by regulations, and

"regulations" means regulations made by the Lord Chancellor;

"subordinate legislation" has the same meaning as in the Interpretation Act 1978;

and the power to make regulations under this section shall be exercisable by statutory instrument, which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3) In this section and sections 25B and 25C above-

"occupational pension scheme" has the same meaning as in the Pension Schemes Act 1993;

"the party with pension rights" means the party to the marriage who has or is likely to have benefits under a pension arrangement and "the other party" means the other party to the marriage;

"pension arrangement" means-

(a) an occupational pension scheme,

(b) a personal pension scheme,

(c) a retirement annuity contract,

(d) an annuity or insurance policy purchased, or transferred, for the purpose of giving effect to rights under an occupational pension scheme or a personal pension scheme, and

(e) an annuity purchased, or entered into, for the purpose of discharging liability in respect of a pension credit under section 18(1)(b) of the Welfare Reform and Pensions Act 1999 or under corresponding Northern Ireland legislation;

"personal pension scheme" has the same meaning as in the Pension Schemes Act 1993;

"prescribed" means prescribed by regulations;

"retirement annuity contract" means a contract or scheme approved under Chapter III of Part XIV of the Income and Corporation Taxes Act 1988;

"shareable state scheme rights" has the same meaning as in section 21(2A) above); and

"trustees or managers", in relation to an occupational pension scheme or a personal pension scheme, means-

(a) in the case of a scheme or arrangement established under a trust, the trustees of the scheme, and

(b) in any other case, the managers of the scheme.

(4) In this section and sections 25B and 25C above, references to the person responsible for a pension arrangement are-

(a) in the case of an occupational pension scheme or a personal pension scheme, to the trustees or managers of the scheme,

(b) in the case of a retirement annuity contract or an annuity falling within paragraph (d) or (e) of the definition of "pension arrangement" above, the provider of the annuity, and

(c) in the case of an insurance policy falling within paragraph (d) of the definition of that expression, the insurer.

Commencement of proceedings for ancillary relief, etc.

26. [This section is not amended by the Bill.]

Financial provision in case of neglect to maintain

Financial provision orders, etc., in case of neglect by party to marriage to maintain other party or child of the family

27. [This section is not amended by the Bill.]

Additional provisions with respect to financial provision and property adjustment orders

Duration of continuing financial provision orders in favour of party to marriage, and effect of remarriage

28. [This section is not amended by the Bill.]

Duration of continuing financial provision orders in favour of children, and age limit on making certain orders in their favour

29. [This section is not amended by the Bill.]

Direction for settlement of instrument for securing payments or effecting property adjustment

30. [This section is not amended by the Bill.]

Variation, discharge and enforcement of certain orders, etc.

Variation, discharge, etc., of certain orders for financial relief

31.-(1) Where the court has made an order to which this section applies, then, subject to the provisions of this section and of section 28(1A) above, the court shall have power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.

(2) This section applies to the following orders under this Part of this Act, that is to say-

(a) any interim order for maintenance;

(b) any periodical payments order;

(c) any secured periodical payments order;

(d) an order for the payment of a lump sum in a case in which the payment is to be by instalments;

(dd) any deferred order made by virtue of section 21(1)(c) (lump sums) which includes provision made by virtue of-

(i) section 25B(4), or

(ii) section 25C,

(provision in respect of pension rights);

(de) any other order for the payment of a lump sum, if it is made at a time when no divorce order has been made, and no separation order is in force, in relation to the marriage;

(e) any order under section 23A of a kind referred to in section 21(2)(b),(c) or (d) which is made on or after the making of a separation order;

(ea) any order under section 23A which is made at a time when no divorce order has been made, and no separation order is in force, in relation to the marriage;

(f) any order made under section 24A(1) above for the sale of property.

(g) a pension sharing order under section 24B which is made at a time when no divorce order has been made, and no separation order is in force, in relation to the marriage.

(2A) Where the court has made an order referred to in subsection (2)(a), (b) or (c) above, then, subject to the provisions of this section, the court shall have power to remit the payment of any arrears due under the order or of any part thereof.

(2B) Where the court has made an order referred to in subsection (2)(dd)(ii) above, this section shall cease to apply to the order on the death of either of the parties to the marriage.

(3) The powers exercisable by the court under this section in relation to an order shall be exercisable also in relation to any instrument executed in pursuance of the order.

(4) The court shall not exercise the powers conferred by this section in relation to an order referred to in subsection (2)(e) above except on an application made in proceedings on an application for a divorce order in relation to the marriage.

(4A) In relation to an order which falls within subsection (2)(de) or (ea) (ea) or (g) above ("the subsection (2) order")-

(a) the powers conferred by this section may be exercised-

(i) only on an application made before the subsection (2) order has or, but for paragraph (b) below, would have taken effect; and

(ii) only if, at the time when the application is made, no divorce order has been made in relation to the marriage and no separation order has been so made since the subsection (2) order was made; and

(b) an application made in accordance with paragraph (a) above prevents the subsection (2) order from taking effect before the application has been dealt with.

(4B) No variation-

(a) of a financial provision order made under section 22A above, other than an interim order, or

(b) of a property adjustment order made under section 23A above, shall be made so as to take effect before the making of a divorce order or separation order in relation to the marriage, unless the court is satisfied that the circumstances of the case are exceptional, and that it would be just and reasonable for the variation to be so made.

(4C) No variation of a pension sharing order shall be made so as to take effect before the making of a divorce order in relation to the marriage.

(4D) The variation of a pension sharing order prevents the order taking effect before the end of such period after the making of the variation as may be prescribed by regulations made by the Lord Chancellor.

(5) Subject to subsections (7A) to (7FH) below and without prejudice to any power exercisable by virtue of subsection (2)(d),(dd) or (e), (e) or (g) above or otherwise than by virtue of this section, no property adjustment order or pension sharing order shall be made on an application for the variation of a periodical payments or secured periodical payments order made (whether in favour of a party to a marriage or in favour of a child of the family) under section 22A or 23 above, and no order for the payment of a lump sum shall be made on an application for the variation of a periodical payments or secured periodical payments order in favour of a party to a marriage (whether made under section 22A or 23 or under section 27 above).

(6) Where the person liable to make payments under a secured periodical payments order has died, an application under this section relating to that order (and to any order made under section 24A(1) above which requires the proceeds of sale of property to be used for securing those payments) may be made by the person entitled to payments under the periodical payments order or by the personal representatives of the deceased person, but no such application shall, except with the permission of the court, be made after the end of the period of six months from the date on which representation in regard to the estate of that person is first taken out.

(7) In exercising the powers conferred by this section the court shall have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen, and the circumstances of the case shall include any change in any of the matters to which the court was required to have regard when making the order to which the application relates, and-

(a) in the case of a periodical payments or secured periodical payments order made in favour of a party to a marriage, the court shall, if the marriage has been dissolved or annulled, consider whether in all the circumstances and after having regard to any such change it would be appropriate to vary the order so that payments under the order are required to be made or secured only for such further period as will in the opinion of the court be sufficient (in the light of any proposed exercise by the court, where the marriage has been dissolved, of its powers under subsection (7B) below) to enable the party in whose favour the order was made to adjust without undue hardship to the termination of those payments;

(b) in a case where the party against whom the order was made has died, the circumstances of the case shall also include the changed circumstances resulting from his or her death.

(7A) Subsection (7B) below applies where, after the dissolution of a marriage, the court-

(a) discharges a periodical payments order or secured periodical payments order made in favour of a party to the marriage; or

(b) varies such an order so that payments under the order are required to be made or secured only for such further period as is determined by the court.

(7B) The court has power, in addition to any power it has apart from this subsection, to make supplemental provision consisting of any of-

(a) an order for the payment of a lump sum in favour of a party to the marriage;

(b) one or more property adjustment orders in favour of a party to the marriage;

(ba) one or more pension sharing orders;

(c) a direction that the party in whose favour the original order discharged or varied was made is not entitled to make any further application for-

(i) a periodical payments or secured periodical payments order, or

(ii) an extension of the period to which the original order is limited by any variation made by the court.

(7C) An order for the payment of a lump sum made under subsection (7B) above may-

(a) provide for the payment of that sum by instalments of such amount as may be specified in the order; and

(b) require the payment of the instalments to be secured to the satisfaction of the court.

(7D) Subsections (7) and (8) of section 22A above apply where the court makes an order for the payment of a lump sum under subsection (7B) above as they apply where it makes such an order under section 22A above.

(7E) If under subsection (7B) above the court makes more than one property adjustment order in favour of the same party to the marriage, each of those orders must fall within a different paragraph of section 21(2) above.

(7F) Sections 24A and 30 above apply where the court makes a property adjustment order under subsection (7B) above as they apply where it makes such an order under section 23A above.

(7G) Section 24B(3) above applies where the court makes a pension sharing order under subsection (7B) above as it applies where the court makes such an order under section 24B above.

(7H) Section 24C(5) to (7) apply in relation to a pension sharing order under subsection (7B) above as they apply in relation to such an order under section 24B above.

(8) The personal representatives of a deceased person against whom a secured periodical payments order was made shall not be liable for having distributed any part of the estate of the deceased after the expiration of the period of six months referred to in subsection (6) above on the ground that they ought to have taken into account the possibility that the court might permit an application under this section to be made after that period by the person entitled to payments under the order; but this subsection shall not prejudice any power to recover any part of the estate so distributed arising by virtue of the making of an order in pursuance of this section.

(9) In considering for the purposes of subsection (6) above the question when representation was first taken out, a grant limited to settled land or to trust property shall be left out of account and a grant limited to real estate or to personal estate shall be left out of account unless a grant limited to the remainder of the estate has previously been made or is made at the same time.

(10) Where the court, in exercise of its powers under this section, decides to vary or discharge a periodical payments or secured periodical payments order, then, subject to section 28(1) and (2) above, the court shall have power to direct that the variation or discharge shall not take effect until the expiration of such period as may be specified in the order.

(11) Where-

(a) a periodical payments or secured periodical payments order in favour of more than one child ("the order") is in force;

(b) the order requires payments specified in it to be made to or for the benefit of more than one child without apportioning those payments between them;

(c) a maintenance assessment ("the assessment") is made with respect to one or more, but not all, of the children with respect to whom those payments are to be made; and

(d) an application is made, before the end of the period of 6 months beginning with the date on which the assessment was made, for the variation or discharge of the order, the court may, in exercise of its powers under this section to vary or discharge the order, direct that the variation or discharge shall take effect from the date on which the assessment took effect or any later date.

(12) Where-

(a) an order ("the child order") of a kind prescribed for the purposes of section 10(1) of the Child Support Act 1991 is affected by a maintenance assessment;

(b) on the date on which the child order became so affected there was in force a periodical payments or secured periodical payments order ("the spousal order") in favour of a party to a marriage having the care of the child in whose favour the child order was made; and

(c) an application is made, before the end of the period of 6 months beginning with the date on which the maintenance assessment was made, for the spousal order to be varied or discharged, the court may, in exercise of its powers under this section to vary or discharge the spousal order, direct that the variation or discharge shall take effect from the date on which the child order became so affected or any later date.

(13) For the purposes of subsection (12) above, an order is affected if it ceases to have effect or is modified by or under section 10 of the Child Support Act 1991.

(14) Subsections (11) and (12) above are without prejudice to any other power of the court to direct that the variation of discharge of an order under this section shall take effect from a date earlier than that on which the order for variation or discharge was made.

(15) The power to make regulations under subsection (4D) shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Variation etc. following reconciliations

31A. [This section is not amended by the Bill.]

Discharge of pension sharing orders on making of separation order.

31B. Where, after the making of a pension sharing order under section 24B above in relation to a marriage, a separation order is made in relation to the marriage, the pension sharing order is discharged.

Payment of certain arrears unenforceable without the leave of the court

32. [This section is not amended by the Bill.]

Orders for repayment in certain cases of sums paid under certain orders

33. [This section is not amended by the Bill.]

Variation, discharge and enforcement of certain orders, etc.: consent orders

Consent orders for financial provision on property adjustment

33A.-(1) Notwithstanding anything in the preceding provisions of this Part of this Act, on an application for a consent order for financial relief the court may, unless it has reason to think that there are other circumstances into which it ought to inquire, make an order in the terms agreed on the basis only of the prescribed information furnished with the application.

(2) Subsection (1) above applies (subject, in the case of the powers of the court under section 31A above, to subsections (6) and (7) of that section) to an application for a consent order varying or discharging an order for financial relief as it applies to an application for an order for financial relief.

(3) In this section-

"consent order", in relation to an application for an order, means an order in the terms applied for to which the respondent agrees;

"order for financial relief" means any of the following orders under this Part of this Act, that is to say, any financial provision order, any property adjustment order, any pension sharing order, any order for the sale of property or any interim order for maintenance; and

"prescribed" means prescribed by rules of court.

Maintenance agreements

Validity of maintenance agreements

34. [This section is not amended by the Bill.]

Alteration of agreements by court during lives of parties

35. [This section is not amended by the Bill.]

Alteration of agreements by court after death of one party

36. [This section is not amended by the Bill.]

Miscellaneous and supplemental

Avoidance of transactions intended to prevent or reduce financial relief

37.-(1) For the purposes of this section "financial relief" means relief under any of the provisions of sections 22A to

24, 24B, 24D, 27, 31 (except subsection (6)), 31A and 35 above, and any reference in this section to defeating a person's claim for financial relief is a reference to preventing financial relief from being granted to that person, or to that person for the benefit of a child of the family, or reducing the amount of any financial relief which might be so granted, or frustrating or impeding the enforcement of any order which might be or has been made at his instance under any of those provisions.

(2) Where proceedings for financial relief are brought by one person against another, the court may, on the application of the first-mentioned person-

(a) if it is satisfied that the other party to the proceedings is, with the intention of defeating the claim for financial relief, about to make any disposition or to transfer out of the jurisdiction or otherwise deal with any property, make such order as it thinks fit for restraining the other party from so doing or otherwise for protecting the claim;

(b) if it is satisfied that the other party has, with that intention, made a reviewable disposition and that if the disposition were set aside financial relief or different financial relief would be granted to the applicant, make an order setting aside the disposition;

(c) if it is satisfied, in a case where an order has been obtained under any of the provisions mentioned in subsection (1) above by the applicant against the other party, that the other party has, with that intention, made a reviewable disposition, make an order setting aside the disposition;

and an application for the purposes of paragraph (b) above shall be made in the proceedings for the financial relief in question.

(3) Where the court makes an order under subsection (2)(b) or (c) above setting aside a disposition it shall give such consequential directions as it thinks fit for giving effect to the order (including directions requiring the making of any payments or the disposal of any property).

(4) Any disposition made by the other party to the proceedings for financial relief in question (whether before or after the commencement of those proceedings) is a reviewable disposition for the purposes of subsection (2)(b) and (c) above unless it was made for valuable consideration (other than marriage) to a person who, at the time of the disposition, acted in relation to it in good faith and without notice of any intention on the part of the other party to defeat the applicant's claim for financial relief.

(5) Where an application is made under this section with respect to a disposition which took place less than three years before the date of the application or with respect to a disposition or other dealing with property which is about to take place and the court is satisfied-

(a) in a case falling within subsection (2)(a) or (b) above, that the disposition or other dealing would (apart from this section) have the consequence, or

(b) in a case falling within subsection (2)(c) above, that the disposition has had the consequence, of defeating the applicant's claim for financial relief, it shall be presumed, unless the contrary is shown, that the person who disposed of or is about to dispose of or deal with the property did so or, as the case may be, is about to do so, with the intention of defeating the applicant's claim for financial relief.

(6) In this section "disposition" does not include any provision contained in a will or codicil but, with that exception, includes any conveyance, assurance or gift of property of any description, whether made by an instrument or otherwise.

(7) This section does not apply to a disposition made before 1st January 1968.

Orders for repayment in certain cases of sums paid after cessation of order by reason of remarriage

38. [This section is not amended by the Bill.]

Settlement, etc., made in compliance with a property adjustment order may be avoided on bankruptcy of settlor

39. [This section is not amended by the Bill.]

Payments, etc., under order made in favour of person suffering from mental disorder

40. [This section is not amended by the Bill.]

Appeals relating to pension sharing orders which have taken effect.

40A.-(1) Subsections (2) and (3) below apply where an appeal against a pension sharing order is begun on or after the day on which the order takes effect.

(2) If the pension sharing order relates to a person's rights under a pension arrangement, the appeal court may not set aside or vary the order if the person responsible for the pension arrangement has acted to his detriment in reliance on the taking effect of the order.

(3) If the pension sharing order relates to a person's shareable state scheme rights, the appeal court may not set aside or vary the order if the Secretary of State has acted to his detriment in reliance on the taking effect of the order.

(4) In determining for the purposes of subsection (2) or (3) above whether a person has acted to his detriment in reliance on the taking effect of the order, the appeal court may disregard any detriment which in his opinion is insignificant.

(5) Where subsection (2) or (3) above applies, the appeal court may make such further orders (including one or more pension sharing orders) as it thinks fit, for the purpose of putting the parties in the position it considers appropriate.

(6) Section 24F above only applies to a pension sharing order under this section if the decision of the appeal court can itself be the subject of an appeal.

(7) In subsection (2), the reference to the person responsible for the pension arrangement is to be read in accordance with section 25D(4) above.