§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ 4.46 p.m.
§ Lieut.-Colonel ColvilleThis Clause corrects a minor anomaly created by the Superannuation Act, 1935. That Act enabled a civil servant on retiring to surrender part of his pension in return for a pension to his wife. Pensions are earned income, and the wife's pension would fall to be regarded as earned income. Where the wife has an earned income, the husband's personal allowance of £180 is increased by four-fifths of that earned income, subject to a maximum of £45. This additional allowance is given, broadly, on the ground that where income is earned by the wife, her work takes her away from household duties and that the expenses of the household are thereby increased. That is the reason for that allowance. The additional benefit is clearly not justified where the husband's own income has merely been divided and one part transferred to his wife.
1997 I should add that any pension received by the wife in respect of her own past services in an office or employment is unaffected by the Clause. It will continue to rank as earned income of the wife and the additional personal allowance in respect of a wife's earned income will be made. One other point is that even where the pension payable to the wife is in respect of her husband's past services, it will continue to be treated as earned income of the wife for purposes other than Section 18 of the Finance Act, 1920. The husband will thus be able to claim the ordinary earned income allowance in respect of it. In other words—since that explanation is rather technical—if the husband surrenders part of his pension in return for a pension to his wife, he can still obtain an earned income allowance in respect of the combined pension, and the Clause merely prevents him from obtaining an increased personal allowance. The point mainly affects civil servants and has been discussed with, and is perfectly understood by, the civil servants concerned.