Regulation 4
SCHEDULE 1E+W+SFURTHER PROVISIONS REPLACING SECTION 36(4) OF THE NATIONAL INSURANCE ACT 1965: INCREASES OF GRADUATED RETIREMENT BENEFIT AND LUMP SUMS
PART 1 E+W+SINCREASE AND LUMP SUM WHERE ENTITLEMENT TO RETIREMENT PENSION IS DEFERRED
ScopeE+W+S
1. This Part applies only in respect of a person who is deferring entitlement to graduated retirement benefit by virtue of section 36(4A)(a) of the 1965 Act M1.
Marginal Citations
Increase or lump sum where pensioner's entitlement is deferredE+W+S
2.—(1) Where a person's entitlement to a Category A or Category B retirement pension is deferred and that person elects, on claiming his pension either—
(a)that paragraph 1 of Schedule 5 (increase of pension) is to apply in relation to the period of deferment, paragraph 3 of this Schedule shall also apply in relation to that period;
(b)that paragraph 3A of Schedule 5 (lump sum) is to apply in relation to the period of deferment, paragraph 5 of this Schedule shall also apply in relation to that period.
(2) The reference to an election in sub-paragraph (1) includes an election a person is treated as having made under paragraph A1(2) of Schedule 5.
Increase where pensioner's entitlement is deferredE+W+S
3.—(1) This paragraph applies where—
(a)entitlement to a Category A or Category B retirement pension is deferred and the period of deferment is less than 12 months; or
(b)paragraph 2(1)(a) applies.
(2) The rate of the person's graduated retirement benefit shall be increased by an amount equal to the aggregate of the increments to which he is entitled under paragraph 4 but only if that amount is enough to increase the rate of the benefit by at least 1 per cent.
Calculation of incrementE+W+S
4.—(1) A person is entitled to an increment under this paragraph for each complete incremental period in his period of deferment.
(2) The amount of the increment for an incremental period shall be ⅕th per cent. of the weekly rate of the graduated retirement benefit to which the person would have been entitled for the period if his entitlement to a Category A or Category B retirement pension had not been deferred.
(3) For the purposes of sub-paragraph (2), the weekly rate of graduated retirement benefit shall be taken to include any increase in the weekly rate of that benefit and the amount of the increment in respect of such an increase shall be ⅕th per cent. of its weekly rate for each incremental period in the period of deferment beginning on the day the increase occurred.
(4) Amounts under sub-paragraphs (2) and (3) shall be rounded to the nearest penny, taking any ½p as nearest to the next whole penny.
(5) Where an amount under sub-paragraph (2) or (3) would, apart from this sub-paragraph, be a sum less than ½p, the amount shall be taken to be zero, notwithstanding any provision of the Benefits Act, the Administration Act or the Pension Schemes Act 1993 M2.
(6) In this paragraph, “incremental period” means any period of six days which are treated by the Social Security (Widow's Benefit and Retirement Pensions) Regulations 1979 M3 as days of increment for the purposes of paragraph 2 of Schedule 5 in relation to the person and pension in question.
(7) Where one or more orders have come into force under section 150 of the Administration Act during the period of deferment, the rate for any incremental period shall be determined as if the order or orders had come into force before the beginning of the period of deferment.
Marginal Citations
M3S.I.1979/642; the relevant amending instruments are S.I.1989/1642, 1991/2742, 1992/1695, 1996/1345 and 1999/2422.
Lump sum where pensioner's entitlement is deferredE+W+S
5.—(1) This paragraph applies where paragraph 2(1)(b) applies.
(2) The person is entitled to an amount calculated in accordance with paragraph 6 (a “lump sum”).
Calculation of lump sumE+W+S
6.—(1) The lump sum is the accrued amount for the last accrual period beginning during the period of deferment.
(2) In this paragraph—
“accrued amount” means the amount calculated in accordance with sub-paragraph (3);
“accrual period” means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to a person in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Social Security (Claims and Payments) Regulations 1987 M4, if his entitlement to a retirement pension had not been deferred, where that day falls within the period of deferment.
(3) The accrued amount for an accrual period for a person is—
(4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect—
(a)at the beginning of the accrual period immediately following the accrual period during which the change took effect; or
(b)if regulations under paragraph 3B(4) of Schedule 5 so provide, at such other time as may be prescribed in those Regulations.
(5) Regulation 3 of the Social Security (Deferral of Retirement Pensions) Regulations 2005 M5 shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 3B of Schedule 5.
Marginal Citations
M4S.I.1987/1968; the relevant amending instruments are S.I.2000/1483 and 2002/2441.
Increase or lump sum where pensioner's deceased spouse has deferred entitlementE+W+S
7.—(1) This paragraph applies where—
(a)a widow or widower (“W”) is entitled to a Category A or Category B retirement pension;
(b)W was married to the other party to the marriage (“S”) when S died;
(c)S's entitlement to a Category A or Category B retirement pension was deferred when S died; and
(d)S's entitlement had been deferred throughout the period of 12 months ending with the day before S's death.
(2) Where W elects—
(a)that paragraph 4 of Schedule 5 (increase of pension) is to apply in relation to the period of deferment, paragraph 8 of this Schedule shall also apply in relation to that period;
(b)that paragraph 7A of Schedule 5 (lump sum) is to apply in relation to the period of deferment, paragraph 9 of this Schedule shall also apply in relation to that period.
(3) The reference to an election in sub-paragraph (2) includes an election W is treated as having made under paragraph 3C(3) of Schedule 5.
Increase where pensioner's deceased spouse has deferred entitlementE+W+S
8.—(1) This paragraph applies where a widow or widower is entitled to a Category A or Category B retirement pension, was married to the other party to the marriage when S died and one of the following conditions is met—
(a)S was entitled to graduated retirement benefit with an increase under this Schedule;
(b)paragraph 7(2)(a) applies; or
(c)paragraph 7 would apply to W but for the fact that the condition in sub-paragraph (1)(d) of that paragraph is not met.
(2) The increase in the weekly rate of W's graduated retirement benefit shall, in a case to which sub-paragraph (1) applies, be determined in accordance with section 37 of the 1965 Act M6 as continued in force by virtue of regulations made under Schedule 3 to the Social Security (Consequential Provisions) Act 1975 M7 or under Schedule 3 to the Social Security (Consequential Provisions) Act 1992 M8.
Entitlement to lump sum where pensioner's deceased spouse has deferred entitlementE+W+S
9.—(1) This paragraph applies where paragraph 7(2)(b) applies.
(2) W is entitled to an amount calculated in accordance with paragraph 10 (a “widowed person's lump sum“).
Calculation of widowed person's lump sumE+W+S
10.—(1) The widowed person's lump sum is the accrued amount for the last accrual period beginning during the period which—
(a)began at the beginning of S's period of deferment; and
(b)ended on the day before S's death.
(2) In this paragraph—
“S” means the other party to the marriage;
“accrued amount” means the amount calculated in accordance with sub-paragraph (3);
“accrual period” means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to S in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Social Security (Claims and Payments) Regulations 1987 M9, if his entitlement to a retirement pension had not been deferred, where that day falls within S's period of deferment.
(3) The accrued amount for an accrual period for W is—
(4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect—
(a)at the beginning of the accrual period immediately following the accrual period during which the change took effect; or
(b)if regulations under paragraph 7B(4) of Schedule 5 so provide, at such other time as may be prescribed.
(5) Regulation 3 of the Social Security (Deferral of Retirement Pensions) Regulations 2005 M10 shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 7B of Schedule 5.
(6) In any case where—
(a)there is a period between the death of S and the date on which W becomes entitled to a Category A or Category B retirement pension; and
(b)one or more orders have come into force under section 150 of the Administration Act during that period,
the amount of the lump sum shall be increased in accordance with that order or those orders.
Marginal Citations
M9S.I.1987/1968; the relevant amending instruments are S.I.2000/1483 and 2002/2441.
PART 2 E+W+SINCREASE OR LUMP SUM WHERE PERSON IS TREATED AS RECEIVING RETIREMENT PENSION AT A NOMINAL WEEKLY RATE
ScopeE+W+S
11. This Part applies only in respect of a person who is deferring entitlement to graduated retirement benefit by virtue of section 36(4A)(b) of the 1965 Act M11.
Marginal Citations
Choice between increase and lump sumE+W+S
12.—(1) Where the period of deferment is at least 12 months, a person shall, on becoming entitled to graduated retirement benefit, elect that—
(a)paragraph 13; or
(b)paragraph 15,
is to apply in respect of that period.
(2) The election referred to in sub-paragraph (1) shall be made—
(a)on the date on which he claims graduated retirement benefit; or
(b)within the period prescribed in regulations under paragraph A1(1) of Schedule 5.
(3) If no election under sub-paragraph (1) is made within the period referred to in sub-paragraph (2)(b), the person is to be treated as having made an election under sub-paragraph (1)(b).
(4) A person who has made an election under sub-paragraph (1) (including one that the person is treated by sub-paragraph (3) as having made) may change the election in the circumstances and within the time specified in regulations made under paragraph A1(4) of Schedule 5.
IncreaseE+W+S
13.—(1) This paragraph applies where—
(a)the period of deferment is less than 12 months; or
(b)the person has made an election under paragraph 12(1)(a) in respect of the period of deferment.
(2) The rate of the person's graduated retirement benefit shall be increased by an amount equal to the aggregate of the increments to which he is entitled under paragraph 14 but only if that amount is enough to increase the rate of the benefit by at least one per cent.
Calculation of incrementE+W+S
14.—(1) A person is entitled to an increment under this paragraph for each complete incremental period in the period of deferment.
(2) The amount of the increment for an incremental period shall be ⅕th per cent. of the weekly rate of the graduated retirement benefit to which the person would have been entitled for the period if his entitlement to graduated retirement benefit had not been deferred.
(3) For the purposes of sub-paragraph (2), the weekly rate of graduated retirement benefit shall be taken to include any increase in the weekly rate of that benefit and the amount of the increment in respect of such an increase shall be ⅕th per cent. of its weekly rate for each incremental period in the period of deferment beginning on the day the increase occurred.
(4) Amounts under sub-paragraphs (2) and (3) shall be rounded to the nearest penny, taking any ½p as nearest to the next whole penny.
(5) Where an amount under sub-paragraph (2) or (3) would, apart from this sub-paragraph, be a sum less than ½p, the amount shall be taken to be zero, notwithstanding any provision of the Benefits Act, the Administration Act or the Pension Schemes Act 1993 M12.
(6) Where one or more orders have come into force under section 150 of the Administration Act during the period of deferment, the rate for any incremental period shall be determined as if the order or orders had come into force before the beginning of the period of deferment.
Marginal Citations
Lump sumE+W+S
15.—(1) This paragraph applies where paragraph 12(1)(b) applies.
(2) The person is entitled to an amount calculated in accordance with paragraph 16 (a “lump sum”).
Calculation of lump sumE+W+S
16.—(1) The lump sum is the accrued amount for the last accrual period beginning during the period of deferment.
(2) In this paragraph—
“accrued amount” means the amount calculated in accordance with sub-paragraph (3);
“accrual period” means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to a person in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Social Security (Claims and Payments) Regulations 1987 M13, if he had been entitled to it, where that day falls within the period of deferment.
(3) The accrued amount for an accrual period for a person is—
(4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect—
(a)at the beginning of the accrual period immediately following the accrual period during which the change took effect; or
(b)if regulations under paragraph 3B(4) of Schedule 5 so provide, at such other time as may be prescribed in those Regulations.
(5) Regulation 3 of the Social Security (Deferral of Retirement Pensions) Regulations 2005 M14 shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 3B of Schedule 5.
Marginal Citations
M13S.I.1987/1968; the relevant amending instruments are S.I.2000/1483 and 2002/2441.
Choice between increase and lump sum where person's deceased spouse has deferred entitlement to graduated retirement benefitE+W+S
17.—(1) This paragraph applies where—
(a)a widow or widower (“W”) is entitled to a Category A or Category B retirement pension;
(b)W was married to the other party to the marriage (“S”) when S died;
(c)S's entitlement to graduated retirement benefit was deferred when S died; and
(d)S's entitlement had been deferred throughout the period of 12 months ending with the day before S's death.
(2) W shall elect either that—
(a)paragraph 18; or
(b)paragraph 19,
is to apply in respect of S's period of deferment.
(3) The election referred to in sub-paragraph (2) shall be made—
(a)on the date W claims her Category A or Category B retirement pension; or
(b)within the period prescribed in regulations under paragraph A1(1) of Schedule 5.
(4) If no election under sub-paragraph (2) is made within the period referred to in sub-paragraph (3)(b), the person is to be treated as having made an election under sub-paragraph (2)(b).
(5) A person who has made an election under sub-paragraph (1) (including one that the person is treated by sub-paragraph (3) as having made) may change the election in the circumstances and within the time specified in regulations made under paragraph A1(4) of Schedule 5.
Increase where person's deceased spouse has deferred entitlement to graduated retirement benefitE+W+S
18.—(1) This paragraph applies where a widow or widower is entitled to graduated retirement benefit, was married to the other party to the marriage when S died and one of the following conditions is met—
(a)S was entitled to graduated retirement benefit with an increase under this Schedule;
(b)W is a widow or widower to whom paragraph 17 applies and has made an election under paragraph 17(2)(a); or
(c)paragraph 17 would apply to W but for the fact that the condition in sub-paragraph (1)(d) of that paragraph is not met.
(2) The increase in the weekly rate of W's graduated retirement benefit shall, in a case to which sub-paragraph (1) applies, be determined in accordance with section 37 of the 1965 Act as continued in force by virtue of regulations made under Schedule 3 to the Social Security (Consequential Provisions) Act 1975 M15 or under Schedule 3 to the Social Security (Consequential Provisions) Act 1992 M16.
Entitlement to lump sum where person's deceased spouse has deferred entitlement to graduated retirement benefitE+W+S
19.—(1) This paragraph applies where paragraph 17(2)(b) applies.
(2) W is entitled to an amount calculated in accordance with paragraph 20 (a “widowed person's lump sum“).
Calculation of widowed person's lump sumE+W+S
20.—(1) The widowed person's lump sum is the accrued amount for last accrual period beginning during the period which—
(a)began at the beginning of S's period of deferment; and
(b)ended on the day before S's death.
(2) In this paragraph—
“S” means the other party to the marriage;
“accrued amount” means the amount calculated in accordance with sub-paragraph (3);
“accrual period” means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to S in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Social Security (Claims and Payments) Regulations 1987, if he had been entitled to it, where that day falls within S's period of deferment.
(3) The accrued amount for an accrual period for W is—
(4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect—
(a)at the beginning of the accrual period immediately following the accrual period during which the change took effect; or
(b)if regulations under paragraph 7B(4) of Schedule 5 so provide, at such other time as may be prescribed.
(5) Regulation 3 of the Social Security (Deferral of Retirement Pensions) Regulations 2005 M17 shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 7B of Schedule 5.
(6) In any case where—
(a)there is a period between the death of S and the date on which W becomes entitled to graduated retirement benefit; and
(b)one or more orders have come into force under section 150 of the Administration Act during that period,
the amount of the lump sum shall be increased in accordance with that order or those orders.
Marginal Citations
PART 3 E+W+SSUPPLEMENTARY
SupplementaryE+W+S
21. Any lump sum calculated under paragraph 6, 10, 16 or 20 must be rounded to the nearest penny, taking any ½p as nearest to the next whole penny above.