Sections 11 to 14: Miscellaneous and supplementary
Section 11: Administration
114.Section 11 introduces Schedule 1, which makes amendments to the Social Security Administration Act 1992 and the Social Security Act 1998 so as to apply, in the case of Pension Credit, the normal social security rules for claims, decisions and appeals.
Section 12: Polygamous marriages
115.Section 12(1) describes, for Pension Credit purposes, the conditions for a person to be treated as being in a polygamous marriage.
116.Subsection (2)(a) confers the power for regulations to prescribe the circumstances in which a member of a polygamous marriage is entitled to Pension Credit.
117.Subsection (2)(b) and (c) confers the power for regulations to prescribe the level of award of Pension Credit, which may include an amount payable in respect of the second and any subsequent spouse.
118.Subsection (2)(d) provides for the aggregation of income and capital of all members of a polygamous marriage for the purposes of determining entitlement to Pension Credit.
119.Subsection (3) allows regulations under this section to modify the Act itself.
Section 13: Transitional provisions
120.Section 13(1) confers power to make regulations in connection with the introduction of Pension Credit in 2003.
121.Section 13(2) provides that, in particular, regulations may treat people aged 60 and over who are receiving Income Support immediately before the introduction of Pension Credit as having been awarded, or having made a claim for, Pension Credit. This will remove the need for them to make a separate claim and provide continuity in payment. Also, where an assessed income period of five years would otherwise apply to a person who has reached the qualifying age when Pension Credit is introduced, the regulations will allow for a longer period to apply. This is to avoid the operational problems which could otherwise occur in 2008.
Section 14: Minor and consequential amendments
122.Section 14 introduces Schedule 2. The amendments of existing legislation in that Schedule are discussed below.
Sections 15 to 17: Interpretation of State Pension Credit provisions
123.Sections 15 and 16 define what is meant by income for the purposes of the Act. Section 15 confers regulation-making powers, which will allow the Secretary of State to prescribe how a person’s income and capital are to be calculated and attributed for the purpose of determining entitlement to the guarantee credit and the savings credit. Section 16(1) contains the definition of "retirement pension income". Section 16(2) confers power to make regulations varying that definition.
Section 15: Income and capital
124.In section 15,subsection (1) defines income for the purposes of the Act.
Paragraph (e) includes a regulation-making power which enables the Secretary of State to prescribe those social security benefits that are taken into account in the assessment.
Paragraph (f) enables further regulations to prescribe the foreign social security benefits that are to count as income. The intention is that this will include any social security benefit paid by the government of a country outside the United Kingdom that is analogous to any of those prescribed under paragraph (e).
Paragraph (g) brings in war disablement pensions and war widow's or widower's pensions (see the definitions of these terms in section 17(1)), while paragraph (h) brings in their foreign equivalents, paid by governments of countries outside the United Kingdom (again, see the corresponding definitions of these expressions in section 17(1)).
Paragraph (j) enables regulations to be made bringing in other descriptions of income. It is intended that this power will be used to cover income streams which few pensioners have, such as employers' sick pay or matrimonial maintenance payments. In the future, the power might be exercised to bring new types of income into account.
125.Subsection (2) confers power to make regulations prescribing how capital holdings will be taken into account in calculating Pension Credit. Normally, capital will be deemed to have an assumed rate of return for purposes of assessing entitlement to the guarantee credit and savings credit. The intention is that a rate of return of £1 a week for every £500 will be applied to capital in excess of £6,000 (£10,000 in cases of people in residential care and nursing homes). Capital below this amount will not be treated as giving rise to income which is to be taken into account in the assessment. Certain types of actual income from capital will be relevant to the assessment. These are limited to income from boarders and sub-tenants in the person’s own home and income from certain trusts. Here, there will be different provision as to disregarding income, which will follow the existing provision for Income Support.
126.Subsections (3) and (4) provide regulation-making powers to prescribe how income and capital will be assessed. The subsections provide that income accrued during any period will be calculated in line with prescribed rules. It is intended that the rules will provide that income may be averaged (seesubsection (5)). In averaging income for fluctuating earnings, for example, the Secretary of State may take an average for a past and current period and apply it to a future period.
127.Subsection (6) confers the power to make regulations prescribing how income and capital will be treated in certain situations. It is intended that Pension Credit will also have the limited income and capital disregards that currently apply in Income Support.
128.It is also intended that existing provisions in the Income Support (General) Regulations 1987 concerning unacceptable deprivation of income or capital will be applied to Pension Credit with amendments. These will contain provisions which state what is unacceptable deprivation, for example gifts to third parties, and what is not, for example, a claimant repaying a mortgage on their home. Thus, for example, a claimant may be treated as having a notional income from capital no longer in their possession if they have disposed of the capital solely or mainly to secure or increase entitlement to Pension Credit.
Section 16: Retirement pension income
129.In section 16, subsection (2) allows the Secretary of State to use regulations to add to, vary or remove the descriptions in the list of retirement pension income in subsection (1). This power provides the Secretary of State with the flexibility to change the scope of the scheme where it is appropriate to do so. It will, for example, allow the list of retirement pension income to be amended so that it remains relevant and reflects any future legislative change as regards pensions and other financial products that provide an income in retirement.
Section 17: Other interpretation provisions
130.Section 17(1) contains definitions of expressions used in the Act.
131.Subsection (2) confers the power to prescribe in regulations the circumstances in which persons are to be treated, or are not to be treated, (a) as members of the same household or (b) as severely disabled. In practice, questions whether persons are members of the same household arise in only two cases:
the determination of whether two persons are a "married couple" (see the definition in section 17(1)); and
the determination of whether the conditions in section 12 (polygamous marriages) are satisfied in any particular case (seesubsection (1)(c) of that section).
