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Clause 5

Volume 77: debated on Thursday 18 April 1985

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Abatement Of Invalidity Allowance, Etc, Where Beneficiary Entitled To Additional Component In Pension Or To Guaranteed Minimum Pension

I beg to move amendment No. 3, in page 2, line 24, after '(2B)', insert

'Provided that nothing in this subsection shall empower an additional component to widow's pension to be deducted from the rate of invalidity allowance;'.
I should say at once that if this amendment is not defective I shall be greatly astonished. All that we are doing here is trying to cast a little more light on what the Government are doing in this part of the Bill. When we debated these matters in Committee, the Government argued that it was legitimate to offset invalidity allowance against an earnings-related invalidity pension because the two were basically the same thing, and were granted on the same basis and for the same reason. We disputed that. We argued that the invalidity allowance was in place of earnings ability lost, whereas the earnings-related component was for money that had been earned before disability occurred.

It has been drawn to my attention since our debates in Committee that the people who will be most harshly and immediately affected by the change are widows. Although it is not likely, for the reason that I gave in Committee, that invalidity allowance and the earnings-related component are related to two different matters, that makes it all the more likely that no individual would have substantial sums on both, which militates against the effect of the change. However, a widow might have the maximum invalidity allowance on her own account and a substantial additional component on her husband's earnings. In that case, we are dealing with two completely different people and two completely different circumstances.

The case that has been drawn to my attention is of a lady who receives £4·61 on her husband's earnings, which she will lose under the terms of the Bill. It has been put to me that other widows may lose more.

The Government have a simple and logical choice here. They can say that our argument and the logic of our argument stand, that they really believe that these two things are the same and represent the same problem and therefore it is right to offset them against each other, and that they accept the case raised in this amendment and will not do anything to widows and will bring forward legislation accordingly; or they can say that, irrespective of the logic of the case, because what they are trying to do is to save money—as we on the Opposition Benches suspect—they will continue with the Bill as drafted, with its effect on widows.

I certainly would not dream of accusing the hon. Lady of tabling technically defective amendments and, even if I had been advised that her amendment was technically defective, I would not seek to use that as an argument.

I am in some uncertainty about the precise point that the hon. Lady has raised. It is not possible for a recipient of a widow's pension to have title to invalidity allowance unless she also has title to invalidity benefit or, if over retirement age, has elected to retain widow's pension rather than receive retirement pension. We certainly do not see any reason for treating widows in a way different from other people if they are in receipt of invalidity allowance and additional components, as there would be no material difference in the circumstances as between a widow and any other person who happened to be in receipt of both invalidity allowance and additional component.

If I have understood the hon. Lady's remarks correctly, she is postulating a case in which the widow may be in receipt of additional component earned not by herself, as it were, directly, but by her husband and may in some way have at the same time retained entitlement to invalidity benefit on her own contribution and the result of her own work record. Moreover, that must have happened at such an early stage as to have entitled her to some significant amount of invalidity allowance, bearing in mind that the higher rates of invalidity allowance entail being disabled substantially at a very early age.

I think that what I can most sensibly say is that I will look further at this point in the light of what the hon. Lady has said. I am not persuaded immediately that there is something we ought to do to change the proposals here, but, since it is not a matter which I have had the opportunity to consider carefully, I should like to look at it, without commitment but in the spirit in which I always look at any point which the hon. Lady raises.

I think it would be helpful if I sought further details of the case that was raised with me and passed them on to the Minister, and I will do that. In the light of what the hon. Gentleman said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amedment No. 5, in page 3, line 15, after 'component', insert

'after any increase under section 9(3) of the Pensions Act but'.

With this it will be convenient to take Government amendment No. 6.

Essentially this is a technical amendment accompanied by a consequential drafting amendment. I shall say more if hon. Members wish, but otherwise not.

Amendment agreed to.

Amendment made: No. 6, in page 3, line 17, leave out 'the Pensions' and insert 'that'.

8.45 pm

I beg to move amendment No. 109, in page 6, line 4, leave out from 'Where' to end of line 17 and insert

'a person—
  • (a)is entitled immediately before the commencement of a provision contained in this section ("the amending provision") to a benefit specified in subsection (8) below ("the relevant benefit"); and
  • (b)continues to be entitled to the relevant benefit after the commencement of the amending provision,
  • until the relevant date the amending provision shall not operate in relation to him, so long as he continues to be entitled to the relevant benefit, in such a way as to reduce the total weekly rate of any benefits specified in subsection (8) below to which he is for the time being entitled to a rate lower than the total weekly rate of such benefits immediately before the commencement of the amending provision.
    • (7) Where—
  • (a)the conditions mentioned in subsection (6)(a) and (b) above are satisfied in relation to a person; and
  • (b)he ceases to be entitled to the relevant benefit after the commencement of the amending provision; and
  • (c)he subsequently becomes entitled to it again; and
  • (d)the interval between the date of his ceasing to be entitled to it and the date of his becoming entitled to it again is eight weeks or less; and
  • (e)the date of his becoming entitled to it again is earlier than the date in 1985 on which an order under sections 124 and 126A below comes into force,
  • until the relevant date the amending provision shall not operate in relation to him, during any periods for which he is entitled to the relevant benefit in such a way as to reduce the total weekly rate of benefits specified in subsection (8) below to which he is for the time being entitled to a rate lower than the total weekly rate of such benefits immediately before the commencement of the amending provision.
    • (8) The benefits mentioned in subsections (6) and (7) above are—
  • (a)invalidity benefit;
  • (b)Category A and Category B retirement pension; and
  • (c)unemployability supplement,
  • including any increase in respect of a dependant.
    • (9) In this section "the relevant date" means, in relation to any person, the first date on which there comes into force an order under sections 124 and 126A below whose effect, taken with the effect of the amending provision, is more beneficial to him than the effect of subsections (6) and (7) above.".'.
    This is a little more than a technical amendment, but it is not quite as horrifying as it looks from its length. It is concerned with tidying up the provisions which we debated in Committee at least as much as with changing them. There are two changes. One is the result of an undertaking that I gave in Committee, and one is the result of an awkwardness which we identified and wished to prevent.

    The hon. Member for Derby, South (Mrs. Beckett) will recall that when we discussed this in Committee I told her that if we were to introduce the overlap provisions at any time other than an uprating I would wish to respond to her suggestion to consider the arrangements for the period between introduction and the date of the first uprating. Although the Bill does not lay down a precise date of commencement for clause 5, there is certainly a possibility, perhaps even a likelihood, that we shall decide to implement this change a month or two in advance of the uprating. In those circumstances, I have thought it right to extend the transitional protection to include people who were in receipt of benefit at the date of introduction, who subsequently ceased to be so entitled but then became sick again before the date of the uprating and within eight weeks of the previous spell's ending. I think that is the point which the hon. Lady was concerned with in Committee, and subsection (7) of the amendment brings this into effect.

    The other change since Committee stage relates to the occasions when we shall operate the overlapping provisions for existing beneficiaries. As I have made clear, this will occur only when a person's total weekly benefit rate is due to be increased. This would normally be at an uprating, but there could be other occasions when a beneficiary receives an increase—notably when he or she became entitled to a dependency increase. Our original intention was to take account of the overlap on other occasions as well, but we concluded that this could lead to some difficulties, which again I will explain if need be, and we have decided to restrict the operation of the overlap provision for existing beneficiaries to uprating times only. That is achieved by various changes in subsections (6) and (7) as defined in subsection (9).

    I welcome what the Minister has said about seeking to give effect to discussions which we had in Committee. I take the opportunity of the tabling of this amendment to comment, mainly because our amendment which sought to delete the clause was not selected, although I do not criticise that decision, that it is worth drawing again to the attention of the House the fact that because of the operation of this clause, even with the improvements which the Minister has outlined, we shall be making a net saving on invalidity pensioners. Apart from the net saving that we make because we offset the increase given to them in one part of the Bill with the money removed in this part of the Bill, there will be a further net saving because of the delay which the Government intend to impose in paying the benefit by paying it in arrears. It would not be right to allow this part of the Bill to pass without pointing out again how strongly we disagree with such moves.

    Amendment agreed to.