Social Security Act 1986

63 Annual up-rating of benefits

(1) The Secretary of State shall in each tax year review the sums—

(a) specified—

(i) in Schedule 4 to the Social Security Act 1975 ;

(ii) in section 30(1) of that Act;

(iii) in sections 2(6)(c) and 7(2)(b) of the [1975 c. 16.] Industrial Injuries and Diseases (Old Cases) Act 1975 ;

(iv) in section 6(1)(a) of the [1975 c. 60.] Social Security Pensions Act 1975;

(b) which are the additional pensions in long-term benefits ;

(c) which are the increases in the rates of retirement pensions under Schedule 1 to the [1975 c. 60.] Social Security Pensions Act 1975;

(d) which are—

(i) payable by virtue of section 35(6) of that Act to a person who is also entitled to a Category A or Category B retirement pension (including sums payable by virtue of section 36(3)); or

(ii) payable to such a person as part of his Category A or Category B retirement pension by virtue of an order made under this section by virtue of this paragraph or made under section 126A of the [1975 c. 14.] Social Security Act 1975;

(e) specified in section 41 (2B) of the Social Security Act 1975;

(f) specified by virtue of section 5(1) of the [1975 c. 61.] Child Benefit Act 1975;

(g) specified in section 7(1) of the [1982 c. 24.] Social Security and Housing Benefits Act 1982;

(h) specified in regulations under section 48(3) above;

(i) prescribed for the purposes of section 21(6)(a) above or specified in regulations under section 22(1) above,

in order to determine whether they have retained their value in relation to the general level of prices obtaining in Great Britain estimated in such manner as the Secretary of State thinks fit.

(2) Where it appears to the Secretary of State that the general level of prices is greater at the end of the period under review than it was at the beginning of that period, he shall lay before Parliament the draft of an up-rating order—

(a) which increases each of the sums to which subsection (3) below applies by a percentage not less than the percentage by which the general level of prices is greater at the end of the period than it was at the beginning; and

(b) if he considers it appropriate, having regard to the national economic situation and any other matters which he considers relevant, which also increases by such percentage or percentages as he thinks fit any of the sums mentioned in subsection (1) above but to which subsection (3) below does not apply ; and

(c) stating the amount of any sums which are mentioned in subsection (1) above but which the order does not increase.

(3) This subsection applies to sums—

(a) specified in Part I, paragraph 1, 2, 3, 4 or 5 of Part III, Part IV or Part V of Schedule 4 to the [1975 c. 14.] Social Security Act 1975;

(b) mentioned in subsection (1)(a)(iii) or (iv), (b), (c) or (d) above.

(4) Subsection (2) above shall not require the Secretary of State to provide for an increase in any case in which it appears to him that the amount of the increase would be inconsiderable.

(5) The Secretary of State may, in providing for an increase in pursuance of subsection (2) above, adjust the amount of the increase so as to round any sum up or down to such extent as he thinks appropriate.

(6) Where subsection (2) above requires the Secretary of State to lay before Parliament the draft of an order increasing any sum that could be reduced under section 17(1) of the [1975 c. 61.] Child Benefit Act 1975, the order may make such alteration to that sum as reflects the combined effect of that increase and of any reduction that could be made under that subsection.

(7) An increase in a sum such as is specified in subsection (1)(d)(ii) above shall form part of the Category A or Category B retirement pension of the person to whom it is paid and an increase in a sum specified such as is specified in subsection (1)(d)(i) above shall be added to and form part of that pension but shall not form part of tile sum increased.

(8) Where any increment under section 35(6) of the [1975 c. 60.] Social Security Pensions Act 1975—

(a) is increased in any tax year by an order under section 37A of that Act; and

(b) in that tax year also falls to be increased by an order under this section,

the increase under this section shall be the amount that would have been specified in the order, but for this subsection, less the amount of the increase under section 37A.

(9) Where sums are payable to a person by virtue of section 35(6) of the Social Security Pensions Act 1975 (including such sums payable by virtue of section 36(3) of that Act) during a period ending with the date on which he became entitled to a Category A or Category B retirement pension, then, for the purpose of determining the amount of his Category A or Category B retirement pension, orders made under this section during that period shall be deemed to have come into force (consecutively in the order in which they were made) on the date on which he became entitled to that pension.

(10) If the Secretary of State considers it appropriate to do so, he may include in the draft of an up-rating order, in addition to any other provisions, provisions increasing any of the sums for the time being specified in regulations under Part II of this Act.

(11) The Secretary of State shall lay with any draft order under this section a copy of a report by the Government Actuary giving the latter's opinion on the likely effect on the National Insurance Fund of such parts of the order as relate to sums payable out of that Fund.

(12) If a draft order laid before Parliament in pursuance of this section is approved by a resolution of each House, the Secretary of State shall make the order in the form of the draft.

(13) An order under this section—

(a) shall be framed so as to bring the alterations to which it relates into force—

(i) in the week beginning with the first Monday in the tax year ; or

(ii) on such earlier date in April as may be specified in the order;

(b) shall make such transitional provision as the Secretary of State considers expedient in respect of periods of entitlement—

(i) to statutory sick pay;

(ii) to family credit,

running at the date when the alterations come into force.