Part 4 – State Pension Credit
Section 28: State pension credit: phasing out assessed income periods
130.Section 28 provides for the assessed income period (AIP) in state pension credit claims to be phased out from 2016. The AIP is a feature of state pension credit that removes the requirement for certain individuals to notify the Department for Work and Pensions of changes to retirement provision (broadly defined as capital, annuities and non-state pensions) for a defined period, for the purposes of assessing their entitlement to state pension credit. From 2016, any change in retirement provision must be reported when it occurs, triggering an immediate review and change of the benefit award where appropriate. The removal of the AIP will apply to new customers and there is a power to apply it to those existing customers with a 5-year AIP already in place at April 2016 (the latter will be gradually phased out in the first few years). Indefinite AIPs already in place on 6 April 2016 will remain in place until they end under existing rules.
131.Subsection (1) limits the application of the legislation on AIPs to decisions that take effect before 6 April 2016. This effectively means that, from 6 April 2016, no new AIPs will be set. It also means, however, that AIPs set before 6 April 2016 will remain valid beyond that date, until such time as they end through being phased out or under existing rules.
132.Subsection (3) is intended to make it clear that regulations under section 9(5) of the SPCA 2002 may be made for the purpose of phasing out, on or after 6 April 2016, any remaining AIP that is 5 years or shorter in length. Section 9(5) could therefore be used to provide for those AIPs to be ended via reviews carried out on a phased schedule.
Section 29: Preserving indefinite status of certain assessed income periods
133.Section 9(6) of the SPCA 2002 was inserted by section 105(4) of the PA 2008 to ensure that certain AIPs were extended indefinitely. This was a transitional provision and was thought to be necessary only until 6 April 2014. It is therefore repealed from that date by section 105(6) of the PA 2008. The repeal leaves some doubt about whether existing AIPs under section 9(6) of the SPCA 2002 will remain in place after 6 April 2014. Section 29 of the Act is intended to remove the doubt by ensuring that existing indefinite AIPs governed by section 9(6) of the SPCA 2002 remain in place on or after that date.
134.Section 29 was drafted so that it would work whether or not the section comes into force before, on or after 6 April 2014.
