Social Security — House of Commons, 2016-09-14
Topic: Labor
Richard Harrington (Conservative, Centre-right): I beg to move, That the draft Pensions Act 2014 (Consequential Amendments) Order 2016, which was laid before this House on 4 July, be approved This order implements a small number of further minor consequential amendments in connection with the introduction of the new state pension. It does two things. First, it ensures that existing administrative arrangements that are designed to facilitate the annual uprating exercise will continue to operate as they do now. Secondly, it gives appeal rights to decisions about national insurance credits that count for new state pension purposes Let me deal first with the amendments to do with uprating. Article 2 amends the Social Security Administration Act 1992, which deals with alterations in the payable amount of certain income-related benefits due to uprating: that is, income support, income-based jobseeker’s allowance, income-related employment and support allowance, universal credit, and pension credit. These provisions allow an existing award of these benefits to be altered automatically to take account of the uprating of another benefit in payment to the claimant or their partner, without the need for a further decision by a decision maker. They can also enable the decision maker to take account of the new rates from the uprating date when he or she is determining a new award that begins before the uprating order has come into force, rather than having to revisit the award to apply the new rates at a later date. Article 2 retains long-standing administrative easements that support the annual uprating exercise. It is simply a case of delivering business as usual in a case where a person or their partner’s benefit income is the new state pension. These amendments will therefore apply for the first time in April 2017, with the first uprating exercise for the new state pension I turn to the amendment to do with appeal rights for national insurance credits. Article 3 amends schedule 3 to the Social Security Act 1998, which lists decisions that carry the right of appeal. This schedule already includes decisions on credits awarded under the old 1975 credits regulations, and also needs to include those provided for under part 8 of the new State Pension Regulations 2015. The policy intention is that decisions made in relation to those credits should carry the right of appeal. That should have been enacted with effect from 6 April 2016, but I regret to say that it was overlooked and that, as the law stands, they do not have that right. The amendment makes good that omission and it will come into force on the day after the order is made Of course, that means that there will be a period in which decisions will be made that were intended to carry the right of appeal but that cannot in law be appealed. Those decisions are made by Her Majesty’s Revenue and Customs officials on behalf of the Secretary of State for Work and Pensions, so my officials have been working very closely with HMRC to find a solution That solution involves a workaround. Once the order comes into force, any decisions made under the provisions in part 8 of the State Pension Regulations 2015 will be appealable. HMRC will revisit any decisions made before the order comes into force, and when fresh decisions are made they will carry an appeal right. There will be no substantial difference in outcome between an original decision, had it been appealable and successfully appealed, and a fresh decision that is successfully appealed. A successful appellant will have credits awarded to them Importantly, I reassure the House that, to date, no one has in practice been affected. That may seem unlikely at first glance, but there are a number of reasons for it. First, the omission can affect only certain decisions made since 6 April 2016. Secondly, it affects only credits for which a person has to apply The practical impact of this gap in the law relates only to decisions about credit that a person has applied for since 6 April 2016. They include new credits that cover past periods in which a person was accompanying their armed forces spouse or civil partner on an overseas posting. Ordinarily, credits awarded for the tax year 2016-17 would be taken into account only in the assessment of new state pension awards that will be made after 6 April 2017. However, those new credits could affect state pension awards made since 6 April 2016 A further mitigation is that, before a person can lodge an appeal, they have to ask for the decision to be reconsidered by a decision maker—a process known as mandatory reconsideration. Mandatory reconsideration enables a decision maker to reconsider the decision and the facts taken into account in making it. If, on reflection, it is considered that the decision should be changed, it can be revised without the claimant having to go through the whole appeal process. HMRC data from the last tax year, 2015-16, tell us that fewer than 10 cases where a credits decision under the 1975 regulations was disputed ended up progressing to appeal Finally, out of 324 applications for the new armed forces partner credits that have been refused up to 5 September, 201 of those refusals were because the tax year being applied for was already a qualifying year for other reasons, so the applicant would not need the credit in order to establish their new state pension entitlement It is an unfortunate situation, but I hope that I have reassured the House that, even if a case did materialise, we have measures in place to ensure that, while justice may be delayed, it will not be denied. We are confident that no individual will be disadvantaged by the oversight I am sure you will be delighted, Madam Deputy Speaker, that I can confirm that I am satisfied that the instrument is compatible with the European convention on human rights, and I commend the order to the House.