§ Lord BOYD-CARPENTERasked Her Majesty's Government:
In what circumstances a war disablement pensioner qualifies for a Christmas bonus under the Pensioners' Payments Act 1977, and why war pensioners below pensionable age and not in receipt of National Insurance benefits are excluded from entitlement to this bonus.
§ Lord WELLS-PESTELLI should explain that the broad intention was to pay the Christmas bonus to all those over pension age and retired from regular employment and to a limited number of people under pension age—widows and those so disabled as to be incapable of work. It was not the intention that it should be paid to people who, although disabled, were not incapable of work.
A war disablement pensioner was entitled to receive the bonus if, during week beginning 5th December 1977, in addition to his war disablement pension, he was receiving one of the qualifying benefits set out in Section 2 of the Pensioners' Payments Act, such as:
- a retirement pension,
- an invalidity pension,
- a non-contributory invalidity pension,
- an invalid care allowance,
- an attendance allowance,
- an unemployability supplement or allowance,
- including the special unemployability supplements or allowances paid to war pensioners,
- a supplementary pension.
War disablement pensioners were thus placed on the same footing as other beneficiaries and, moreover, if, for any reason, a war disablement pensioner was over pensionable age but was not entitled to a retirement pension, he received the bonus if he had retired from regular employment or was over age 70 (men), 65 (women).
If, during the debate on the Second Reading of the Pensioners' Payments Bill on 22nd November I misled you as to the entitlement of war pensioners to the bonus, I regret this. I hope I have now made the position clear.
83WAI would also like to take this opportunity to re-state the position on the taxation of retirement pensions which may not have been entirely clear during the debate. The retirement pension is taxable. The reason is that income tax is a tax on total income. Pensions are and always have been looked upon as just as much a form of income as, for example, wages or salaries. However the tax thresholds for those over 65 are substantially above the levels of the retirement pension, so that elderly people can have some additional income, such as a small occupational pension, on top of their retirement pension without having to pay tax. The bonus itself is, however, not taxable. This is because of the administrative difficulties in taxing it.