Welfare Reform Bill

House of Lords

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Welfare Reform Bill

Welfare Reform Bill
Part 1 — Employment and support allowance
1

A
Bill
[AS AMENDED IN GRAND COMMITTEE]
To
Make provision about social security; to amend the Vaccine Damage
Payments Act 1979; and for connected purposes.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Part 1
Employment and support allowance
Entitlement
1
Employment and support allowance
(1)
An allowance, to be known as an employment and support allowance, shall be
5
payable in accordance with the provisions of this Part.
(2)
Subject to the provisions of this Part, a claimant is entitled to an employment
and support allowance if he satisfies the basic conditions and either—
(a)
the first and the second conditions set out in Part 1 of Schedule 1
(conditions relating to national insurance) or the third condition set out
10
in that Part of that Schedule (condition relating to youth), or
(b)
the conditions set out in Part 2 of that Schedule (conditions relating to
financial position).
(3)
The basic conditions are that the claimant—
(a)
has limited capability for work,
15
(b)
is at least 16 years old,
(c)
has not reached pensionable age,
(d)
is in Great Britain,
(e)
is not entitled to income support, and

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Welfare Reform Bill
Part 1 — Employment and support allowance
2

(f)
is not entitled to a jobseeker’s allowance (and is not a member of a
couple who are entitled to a joint-claim jobseeker’s allowance).
(4)
For the purposes of this Part, a person has limited capability for work if—
(a)
his capability for work is limited by his physical or mental condition,
and
5
(b)
the limitation is such that it is not reasonable to require him to work.
(5)
An employment and support allowance is payable in respect of a week.
(6)
In subsection (3)—
“joint-claim jobseeker’s allowance” means a jobseeker’s allowance
entitlement to which arises by virtue of section 1(2B) of the Jobseekers
10
Act 1995 (c. 18);
“pensionable age” has the meaning given by the rules in paragraph 1 of
Schedule 4 to the Pensions Act 1995 (c. 26).
(7)
In this Part—
“contributory allowance” means an employment and support allowance
15
entitlement to which is based on subsection (2)(a);
“income-related allowance” means an employment and support
allowance entitlement to which is based on subsection (2)(b).
2
Amount of contributory allowance
(1)
In the case of a contributory allowance, the amount payable in respect of a
20
claimant shall be calculated by—
(a)
taking such amount as may be prescribed,
(b)
if in his case the conditions of entitlement to the support component or
the work-related activity component are satisfied, adding the amount
of that component, and
25
(c)
making prescribed deductions in respect of any payments to which
section 3 applies.
(2)
The conditions of entitlement to the support component are—
(a)
that the assessment phase has ended,
(b)
that the claimant has limited capability for work-related activity, and
30
(c)
that such other conditions as may be prescribed are satisfied.
(3)
The conditions of entitlement to the work-related activity component are—
(a)
that the assessment phase has ended,
(b)
that the claimant does not have limited capability for work-related
activity, and
35
(c)
that such other conditions as may be prescribed are satisfied.
(4)
Regulations may—
(a)
prescribe circumstances in which paragraph (a) of subsection (2) or (3)
is not to apply;
(b)
prescribe circumstances in which entitlement under subsection (2) or
40
(3) is to be backdated;
(c)
make provision about the amount of the component under subsection
(2) or (3).
(5)
For the purposes of this Part, a person has limited capability for work-related
activity if—
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Welfare Reform Bill
Part 1 — Employment and support allowance
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(a)
his capability for work-related activity is limited by his physical or
mental condition, and
(b)
the limitation is such that it is not reasonable to require him to
undertake such activity.
3
Deductions from contributory allowance: supplementary
5
(1)
This section applies to payments of the following kinds which are payable to
the claimant—
(a)
pension payments,
(b)
PPF periodic payments, and
(c)
payments of a prescribed description made to a person who is a
10
member of, or has been appointed to, a prescribed body carrying out
public or local functions.
(2)
Regulations may—
(a)
disapply section 2(1)(c), so far as relating to pension payments or PPF
periodic payments, in relation to persons of a prescribed description;
15
(b)
provide for pension payments or PPF periodic payments of a
prescribed description to be treated for the purposes of that provision
as not being payments to which this section applies;
(c)
provide for sums of a prescribed description to be treated for the
purposes of this section as payable to persons as pension payments or
20
PPF periodic payments (including, in particular, sums in relation to
which there is a deferred right of receipt);
(d)
make provision for the method of determining how payments to which
this section applies are, for the purposes of section 2, to be related to
periods for which a person is entitled to a contributory allowance.
25
(3)
In this section—
“pension payment” means—
(a)
a periodical payment made in relation to a person under a
personal pension scheme or, in connection with the coming to
an end of an employment of his, under an occupational pension
30
scheme or a public service pension scheme,
(b)
a payment of a prescribed description made under an insurance
policy providing benefits in connection with physical or mental
illness or disability, and
(c)
such other payments as may be prescribed;
35
“PPF periodic payment” means—
(a)
any periodic compensation payment made in relation to a
person, payable under the pension compensation provisions as
specified in section 162(2) of the Pensions Act 2004 (c. 35) or
Article 146(2) of the Pensions (Northern Ireland) Order 2005
40
(S.I. 2005/255 (N.I. 1)) (the pension compensation provisions),
and
(b)
any periodic payment made in relation to a person, payable
under section 166 of the Pensions Act 2004 or Article 150 of the
Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1))
45
(duty to pay scheme benefits unpaid at assessment date etc.).
(4)
For the purposes of subsection (3), “occupational pension scheme”, “personal
pension scheme” and “public service pension scheme” each have the meaning

Welfare Reform Bill
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given by section 1 of the Pension Schemes Act 1993 (c. 48), except that
“personal pension scheme” includes—
(a)
an annuity contract or trust scheme approved under section 620 or 621
of the Income and Corporation Taxes Act 1988 (c. 1), and
(b)
a substituted contract within the meaning of section 622(3) of that Act,
5

which is treated as having become a registered pension scheme by virtue of
paragraph 1(1)(f) of Schedule 36 to the Finance Act 2004 (c. 12).
4
Amount of income-related allowance
(1)
In the case of an income-related allowance, the amount payable in respect of a
claimant shall be—
10
(a)
if he has no income, the applicable amount;
(b)
if he has an income, the amount by which the applicable amount
exceeds his income.
(2)
Subject to subsection (3), the applicable amount for the purposes of subsection
(1) shall be calculated by—
15
(a)
taking such amount, or the aggregate of such amounts, as may be
prescribed, and
(b)
if in the claimant’s case the conditions of entitlement to the support
component or the work-related activity component are satisfied,
adding the amount of that component.
20
(3)
Regulations may provide that, in prescribed cases, the applicable amount for
the purposes of subsection (1) shall be nil.
(4)
The conditions of entitlement to the support component are—
(a)
that the assessment phase has ended,
(b)
that the claimant has limited capability for work-related activity, and
25
(c)
that such other conditions as may be prescribed are satisfied.
(5)
The conditions of entitlement to the work-related activity component are—
(a)
that the assessment phase has ended,
(b)
that the claimant does not have limited capability for work-related
activity, and
30
(c)
that such other conditions as may be prescribed are satisfied.
(6)
Regulations may—
(a)
prescribe circumstances in which paragraph (a) of subsection (4) or (5)
is not to apply;
(b)
prescribe circumstances in which entitlement under subsection (4) or
35
(5) is to be backdated;
(c)
make provision about the amount of the component under subsection
(4) or (5).
5
Advance award of income-related allowance
(1)
This section applies to claims for an employment and support allowance by a
40
person who—
(a)
would be entitled to an income-related allowance, but for the fact that
he does not satisfy the condition in paragraph 6(1)(a) of Schedule 1,

Welfare Reform Bill
Part 1 — Employment and support allowance
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(b)
would satisfy that condition if he were entitled to the component
mentioned in section 4(4) or (5), and
(c)
is not entitled to a contributory allowance.
(2)
In relation to claims to which this section applies, section 5(1) of the
Administration Act (regulations about claims for benefit) shall have effect as
5
if—
(a)
in paragraph (d) (power to permit an award on a claim for benefit for a
future period to be made subject to the condition that the claimant
satisfies the requirements for entitlement when the benefit becomes
payable under the award), there were inserted at the end “and to such
10
other conditions as may be prescribed”, and
(b)
in paragraph (e) (power to provide for such an award to be revised or
superseded under the Social Security Act 1998 (c. 14) if any of those
requirements are found not to have been satisfied), for “any of those
requirements” there were substituted “any of the conditions to which
15
the award is made subject”.
(3)
Regulations may, in relation to claims to which this section applies, make
provision enabling an award to be made on terms such that the time at which
benefit becomes payable under the award is later than the start of the period
for which the award is made.
20
6
Amount payable where claimant entitled to both forms of allowance
(1)
This section applies where a claimant is entitled to both a contributory
allowance and an income-related allowance.
(2)
If the claimant has no income, the amount payable by way of an employment
and support allowance shall be the greater of—
25
(a)
his personal rate, and
(b)
the applicable amount.
(3)
If the claimant has an income, the amount payable by way of an employment
and support allowance shall be the greater of—
(a)
his personal rate, and
30
(b)
the amount by which the applicable amount exceeds his income.
(4)
Where the amount payable to the claimant by way of an employment and
support allowance does not exceed his personal rate, the allowance shall be
treated as attributable to the claimant’s entitlement to a contributory
allowance.
35
(5)
Where the amount payable to the claimant by way of an employment and
support allowance exceeds his personal rate, the allowance shall be taken to
consist of two elements, namely—
(a)
an amount equal to his personal rate, and
(b)
an amount equal to the excess.
40
(6)
The element mentioned in subsection (5)(a) shall be treated as attributable to
the claimant’s entitlement to a contributory allowance.
(7)
The element mentioned in subsection (5)(b) shall be treated as attributable to
the claimant’s entitlement to an income-related allowance.
(8)
In this section—
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Welfare Reform Bill
Part 1 — Employment and support allowance
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“applicable amount” means the amount which, in the claimant’s case, is
the applicable amount for the purposes of section 4(1);
“personal rate” means the amount calculated in accordance with section
2(1).
7
Exclusion of payments below prescribed minimum
5
Except in such circumstances as regulations may provide, an employment and
support allowance shall not be payable where the amount otherwise payable
would be less than a prescribed minimum.
Assessments relating to entitlement
8
Limited capability for work
10
(1)
For the purposes of this Part, whether a person’s capability for work is limited
by his physical or mental condition and, if it is, whether the limitation is such
that it is not reasonable to require him to work shall be determined in
accordance with regulations.
(2)
Regulations under subsection (1) shall—
15
(a)
provide for determination on the basis of an assessment of the person
concerned;
(b)
define the assessment by reference to the extent to which a person who
has some specific disease or bodily or mental disablement is capable or
incapable of performing such activities as may be prescribed;
20
(c)
make provision as to the manner of carrying out the assessment.
(3)
Regulations under subsection (1) may, in particular, make provision—
(a)
as to the information or evidence required for the purpose of
determining the matters mentioned in that subsection;
(b)
as to the manner in which that information or evidence is to be
25
provided;
(c)
for a person in relation to whom it falls to be determined whether he
has limited capability for work to be called to attend for such medical
examination as the regulations may require.
(4)
Regulations under subsection (1) may include provision—
30
(a)
for a person to be treated as not having limited capability for work if he
fails without good cause—
(i)
to provide information or evidence which he is required under
such regulations to provide,
(ii)
to provide information or evidence in the manner in which he is
35
required under such regulations to provide it, or
(iii)
to attend for, or submit himself to, a medical examination for
which he is called under such regulations to attend;
(b)
as to matters which are, or are not, to be taken into account in
determining for the purposes of any provision made by virtue of
40
paragraph (a) whether a person has good cause for any act or omission;
(c)
as to circumstances in which a person is, or is not, to be regarded for the
purposes of any such provision as having good cause for any act or
omission.

Welfare Reform Bill
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(5)
Regulations may provide that, in prescribed circumstances, a person in relation
to whom it falls to be determined whether he has limited capability for work,
shall, if prescribed conditions are met, be treated as having limited capability
for work until such time as—
(a)
it has been determined whether he has limited capability for work, or
5
(b)
he falls in accordance with regulations under this section to be treated
as not having limited capability for work.
(6)
The prescribed conditions referred to in subsection (5) may include the
condition that it has not previously been determined, within such period as
may be prescribed, that the person in question does not have, or is to be treated
10
as not having, limited capability for work.
9
Limited capability for work-related activity
(1)
For the purposes of this Part, whether a person’s capability for work-related
activity is limited by his physical or mental condition and, if it is, whether the
limitation is such that it is not reasonable to require him to undertake such
15
activity shall be determined in accordance with regulations.
(2)
Regulations under subsection (1) shall—
(a)
provide for determination on the basis of an assessment of the person
concerned;
(b)
define the assessment by reference to such matters as the regulations
20
may provide;
(c)
make provision as to the manner of carrying out the assessment.
(3)
Regulations under subsection (1) may, in particular, make provision—
(a)
as to the information or evidence required for the purpose of
determining the matters mentioned in that subsection;
25
(b)
as to the manner in which that information or evidence is to be
provided;
(c)
for a person in relation to whom it falls to be determined whether he
has limited capability for work-related activity to be called to attend for
such medical examination as the regulations may require.
30
(4)
Regulations under subsection (1) may include provision—
(a)
for a person to be treated as not having limited capability for work-
related activity if he fails without good cause—
(i)
to provide information or evidence which he is required under
such regulations to provide,
35
(ii)
to provide information or evidence in the manner in which he is
required under such regulations to provide it, or
(iii)
to attend for, or submit himself to, a medical examination for
which he is called under such regulations to attend;
(b)
as to matters which are, or are not, to be taken into account in
40
determining for the purposes of any provision made by virtue of
paragraph (a) whether a person has good cause for any act or omission;
(c)
as to circumstances in which a person is, or is not, to be regarded for the
purposes of any such provision as having good cause for any act or
omission.
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