Superannuation Act 1972

25 Pension increases

(1) For subsections (1) to (4) of section 2 of the [1971 c. 56.] Pensions (Increase) Act 1971 (which provides for the future review of official pensions and payment of increases) there shall be substituted the following subsections:—

“(1) Subject to the provisions of this section, the Minister for the Civil Service, as soon as may be after 30th June in the year 1972, and every year thereafter, shall review the rates of official pensions against any rise there may have been in the cost of living during the review period, that is to say—

(a) the period of fifteen months ending with 30th June 1972 (" the first review period "); or

(b) the period of twelve months ending with 30th June in the year 1973 and every year thereafter ;

and if it is found that in the review period the cost of living has risen by two per cent. or more, then the Minister shall by order provide that the annual rate of an official pension may, if a qualifying condition is satisfied, be increased in accordance with the order in respect of any period beginning on or after 1st December next following the review period.

(2) Subject to subsection (3) below, the increases to be provided for by an order under this section shall be as follows:—

(a) for pensions beginning on or before the first day of the review period the increase shall be in the proportion (to the nearest one-tenth of one per cent.) in which the cost of living has risen during the review period; and

(b) for pensions beginning—

(i) in the half year following that day ; or

(ii) in the next succeeding half year ending, in the case of the first review period, with 1st April 1972 and, in the case of any other review period, with the day after the end of that period ; or

(iii) in the three months ending with 1st July 1972,

the increases shall be in the proportion (to the nearest one-tenth of one per cent.) in which the cost of living is found to have risen between the basis period for that half year or that period of three months, as the case may be, and the end of the review period, if the cost of living in the basis period is taken as the mean of the monthly figures.

(2A) For purposes of subsection (2)(b) above—

(a) the basis period for any half year is the six months ending with the first month of the half year or, if the cost of living is lower in the half year than in those six months, is the half year itself ;

(b) the basis period for the period of three months specified in sub-paragraph (iii) is the period of three months ending with 1st February 1972 or, if the cost of living is lower in the period so specified, is that period.

(3) Where the rise referred to in subsection (2)(b) above is less for any half year than two per cent., there shall only be an increase for pensions beginning in that half year if there is one for pensions beginning in a later half year, and the increase (if there is one) shall be two per cent.; but where this subsection prevents there being an increase for pensions beginning in any half year, then the order made in respect of the next review period shall for those pensions authorise, instead of an increase calculated in accordance with subsection (2)(a) above, such increase as would result if that prevented by this subsection had been made and were followed by one calculated in accordance with subsection (2)(a) by reference to the rate as so increased.

(4) Where on any review under this section it is not found that the cost of living has risen by two per cent. or more in the review period, the review in the next year shall be for the same review period extended by twelve months ; and if it is found that the cost of living has risen by two per cent. or more in the (extended) review period, the provisions of this section shall apply subject to the modification that for subsection (2)(b)(ii) and (iii) there shall be substituted the following:—

‘(ii) in any of the succeeding half years up to that ending with the day after the end of the review period’.”

(2) For subsection (3) of section 9 of the said Act of 1971 (which relates to gratuities and lump sums) there shall be substituted the following subsection:—

“(3) In respect of any lump sum or instalment of a lump sum which becomes payable after the day following the last day of a review period but before 1st December next following the review period there may be paid by virtue of section 2 above the same increase as if it became payable on that date.”

(3) After subsection (4) of the said section 9 there shall be inserted the following subsection:—

“(4A) Subsection (4) above shall have effect in relation to the first review period as if the period of three months ending with 1st July 1972 were a half year ending with that date.”