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.