Pensions Act 2007

Pensions Act 2007

2007 CHAPTER 22

Commentary on Sections

Schedule 1: Part 1: Category A and B retirement pension: single contribution condition

111. Paragraphs 1 to 3 amend sections 44 (Category A pension), 48A (Category B pension for a married person or civil partner) and 48B (Category B pension for a surviving spouse or civil partner) of the SSCBA1992 to ensure that:

• people reaching state pension age before 6 April 2010 would continue to be entitled to the benefits identified in paragraph 5 of Schedule 3 to the SSCBA1992 on satisfaction by the contributor concerned of the two contribution conditions set out in that paragraph; and

• people who reach state pension age on or after 6 April 2010 would be entitled to a Category A pension on satisfaction of the single contribution condition in the new paragraph 5A of Schedule 3 to the SSCBA1992; and

• in the case of Category B pensions, entitlement would be calculated by reference to the new paragraph 5A of Schedule 3 to the SSCBA1992 for people who are:

  a)

  married to or in a civil partnership with someone who reaches pensionable age on or after 6 April 2010; or

  b)

  the surviving spouse or civil partner of someone who died on or after 6 April 2010 and did not reach state pension age before that date.

112. Paragraph 4 amends section 60 of the SSCBA1992. This section allows provision to be made for those who do not satisfy the contribution conditions for certain benefits. As similar provision is made by new section 60A (see below) where only the new single contribution condition needs to be satisfied, it is necessary to exclude the cases where the single condition applies from the scope of section 60.

113. Paragraph 5 introduces new section 60A. This applies to those cases where only the single contribution condition needs to be satisfied as set out in the new paragraph 5A of Schedule 3.

114. Subsection (1) of this section provides that the section applies where a person does not satisfy the single contribution condition in order to be entitled to a Category A or Category B pension.

115. Subsection (2) of this section provides a regulation-making power to allow a person who would have been entitled to benefit by virtue of paragraph 5A, Schedule 3 to the SSCBA1992 but for the fact that the contributor (defined in subsection (4)) has not acquired the full 30 qualifying years nevertheless to be entitled to a prescribed proportion of a full basic state pension for each qualifying year the contributor has built up (defined in subsection (3)). The calculation for determining the pro-rated amount of basic state pension entitlement in these cases will be set out in regulations. This means that the 25% de minimis rule (see regulation 6(1) of the Social Security (Widow’s Benefit and Retirement Pensions) Regulations 1979 (S.I.1979/642)), which applies to benefits calculated under paragraph 5, Schedule 3 to the SSCBA1992, will not apply to the benefits to which this section applies.

116. Subsection (5) of this section would allow the widow, widower or surviving civil partner of an employed earner who dies on or after 6 April 2010 as a result of an industrial injury benefit (section 94(1) of the SSCBA1992) or a prescribed disease or injury (section 108(1)) to inherit a Category B pension (section 48B), even if the contribution condition set out at paragraph 5A of Schedule 3 to the SSCBA1992 is not satisfied by the deceased employed earner. This makes equivalent provision to that made by section 60.

117. Subsection (6) of this section provides that the reference to the single contribution condition in subsections (1) and (3) includes a reference to that condition as modified by regulations under paragraph 5A(4) of Schedule 3 (i.e. regulations modifying the condition for the purposes of persons who were insured under the National Insurance Act of 1946 or 1965 - see paragraph 110 above).

Section 2: Category B retirement pension: removal of restriction on entitlement

118. Subsection (2) of this section amends subsections (2)(a) and (2B)(a) of section 48A of the SSCBA1992 to remove the restriction which currently prevents a person from becoming entitled to a Category B pension derived from their spouse’s or civil partner’s contributions where their spouse or civil partner has not made a claim for their Category A pension.

119. The effect of the amendment is to enable, subject to the relevant contribution condition being met, a married person or a person in a civil partnership to become entitled to a Category B pension from the point at which both they and their spouse or civil partner have reached state pension age, regardless of whether the spouse or civil partner has made a claim for their Category A pension.

120. Subsection (3) omits section 48(5) which restricts payability of a Category B pension to periods after the spouse or civil partner’s first payday for his or her Category A pension.

121. Subsection (4) introduces the consequential amendments in Part 2 of Schedule 1.

122. Subsection (5) makes provision for section 2 and Part 2 ofSchedule 1 to have effect from 6 April 2010. By subsection (6), the amendments to section 48A apply to a person who attains state pension age before that date as well as to a person who attains state pension age on or after that date.