§ Mr. LlwydTo ask the Secretary of State for Social Security what percentage of United Kingdom state pension expenditure is formed by state expenditure on old-age pensions for pensioners resident in Wales in(a) 1992–93 and (b) 1993–94; and if he will make a statement.
§ Mr. ArbuthnotThe information is in the table.
Percentage of UK retirement pension expenditure for pensioners residing in Wales Year Per cent. 1992–93 5.27 1993–94 5.26 Notes:
1. Sources: DSS pension scheme computer system data and expenditure information.
2. For the purposes of this reply "Retirement Pension expenditure" includes payable additional pension, graduated retirement benefit, increments, age addition and increases for dependants.
3. Information for 1993–94 is provisional.
§ Mr. Frank FieldTo ask the Secretary of State for Social Security how many self-employed people(a) failed to qualify for a retirement pension and (b) qualified for only a reduced pension, due to an inadequate insurance record for each of the last 30 years.
§ Mr. ArbuthnotThe information is not available.
§ Mr. Frank FieldTo ask the Secretary of Stale for Social Security what are the current contribution conditions for(a) unemployment benefit, (b) sickness benefit and (c) the retirement pension; and if he will list how these conditions have changed in the last 30 years.
§ Mr. Arbuthnot:(a) Unemployment Benefit
Prior to 1975 the contribution conditions for unemployment benefit were that
- (1) not less than 26 class 1 contributions had been paid by the claimant in respect of the period between his entry into insurance and the day for which benefit is claimed; and
- (2) not less than 50 class 1 contributions had been paid by or credited to him in respect of the last complete contribution year before the beginning of the benefit year which includes the day for which benefit is claimed.
In 1975, with the changeover from flat rate to earnings-related national insurance contributions, the contribution conditions were amended to:
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- (1) in respect of any one tax year, the earnings factor derived from the person's payment of Class 1 contributions was at least 25 times the lower earnings limit for payment of National Insurance contributions in that year; and
- (2) in the relevant past tax year which governs the claim, the earnings factor derived from class I contributions paid by or credited to the person was not less than 50 times the lower earnings limit for payment of national insurance contributions in that year.
The contribution conditions which have applied since 1988 are that—
- (1) in respect of one of the two tax years relevant to the claim, the earnings factor derived from the person's payment of class 1 contributions is at least 25 times the lower earnings limit for payment of national insurance contributions in that year;
- (2) in respect of both the tax years relevant to the claim, the earnings factor derived from class 1 contributions paid by or credited to the person is at least 50 times the lower earnings limit for payment of national insurance contributions in that year.
(b) Sickness Benefit
Prior to 1988 the contribution conditions for sickness benefit were the same as those applying to unemployment benefit except at class 2—self-employed—contributions counted for benefit purposes.
The contribution conditions which have applied since 1988 are that:
- (1) in respect of any tax year, the earnings factor derived from payment of class 1 or 2 contributions is at least 25 times the lower earnings limit for payment of national insurance contributions in that year, and these contributions must be paid before the start of the claim: and
- (2) in respect of both the tax years relevant to the claim, the earnings factor derived from class 1 contributions paid or credited or class 2 contributions paid is at least 50 times the lower earnings limit for payment of national insurance contributions in that year.
With the abolition of industrial injury benefit from April 1983, the contribution conditions are deemed to be satisfied if the person's incapacity for work was due to an accident at work when an employed earner, or a prescribed industrial disease due to the nature of their work as an employed earner.
Payment of benefit at reduced rates—Sickness and Unemployment Benefit
Prior to 1975 where a person did not fully satisfy the second contribution conditions, reduced rate benefit was payable if not less than 26 contributions of the appropriate class had been paid or credited in the relevant contribution year.
From 1975 where the earnings factor was 50 to 75 per cent. of the amount needed for the payment of standard rate benefit, half rate benefit was paid. Where the earnings factor was more than 75 per cent. but less than the full amount needed for the payment of standard rate benefit, three-quarter rate benefit was paid. Reduced rates of benefit ceased to apply in October 1986 but transitional provisions allowed payment of reduced rates to continue to October 1987 in certain cases.
(c) Retirement Pension
Prior to April 1975 the contribution conditions for standard rate retirement pension were that—
- (1) not less than 156 flat rate contributions had been actually paid by the relevant person in respect of the period between that person's entry to insurance and the date on which he or she reached pensionable age, and
- (2) the yearly average of flat rate contribution paid by or credited to that person was not less than 50. Where the yearly average was less than 50 but not less than 13 retirement pension was payable at a reduced rate.
The yearly average was calculated over the period from the beginning of the contribution year in which school leaving age was reached to the end of the last complete contribution year before that in which pensionable age was reached. This period was modified where the person concerned reached age 16 before 5 July 1948.
435WSince 1975 the contribution conditions for standard rate category A basic retirement pension have been—
- (1) achievement of one qualifying year since 6 April 1975 derived from the actual payment of class 1, 2, or 3 national insurance contributions or payment of 50 flat rate contributions at any time before 6 April 1975
- (2) achievement of qualifying years for approximately 90 per cent. of the years in the person's working life. A reduced rate of pension is payable where the number of qualifying years is less than but at least a quarter of the number required for standard rate pension.
A qualifying year is a tax year in which the earnings factor derived from national insurance contributions paid or credited is at least 52 times the lower earnings limit for that year. Between 6 April 1975 and 5 April 1978, the earnings factor needed for the year to be a qualifying year was 50 times the lower earnings limit for that year. Any national insurance contributions paid or credited before 6 April 1975 are converted into qualifying years by dividing the total number of contributions by 50 and rounding any fraction up to the next whole number.
A person's working life runs from the start of the tax year in which age 16 is reached until the tax year before the one in which pensionable age is reached. The working life can be modified where a person had reached age 16 before 5 July 1948.
Note:
The earnings factor is the amount of earnings on which class 1 national insurance contributions have been paid: class 2 and 3 national insurance contributions and class 1 and 3 contribution credits are treated as earnings at the weekly lower earnings limit for the relevant year.
§ Mr. Frank FieldTo ask the Secretary of State for Social Security what are the current contribution conditions of the state earnings-related scheme; and if he will list the changes in these conditions since the inception of the scheme.
§ Mr. ArbuthnotEntitlement to state earnings-related pension arises where the earnings factor' derived from national insurance contributions paid in respect of 1978–79 or any later tax year exceeds 52 times the lower earnings limit for payment of national insurance contributions in the final relevant year2
Note 1—the earnings factor is the amount of earnings on which class 1 national insurance contributions have been paid in a given tax year. Class 2 and 3 national insurance contributions are treated as earnings at the weekly lower earnings limit. Where the year in question is earlier than the final relevant year, the earnings factor is revalued in line with subsequent growth in national average earnings.Note 2—the final relevant year is the last complete tax year before that in which state pension age is reached or, if earlier, death occurs.
§ Mr. Frank FieldTo ask the Secretary of State for Social Security how many divorced or separated women received(a) a full and (b) a partial retirement pension on the record of their previous partners for each of the last 30 years.
§ Mr. ArbuthnotThe information is not available.
§ Mr. Frank FieldTo ask the Secretary of State for Social Security what have been the savings in public expenditure resulting from changes to the state earnings-related pension scheme since 1979.
§ Mr. ArbuthnotNone.
§ Mr. DewarTo ask the Secretary of State for Social Security (1) if he will publish figures similar to those in table 2 of Cm 2714 on the Pensions Bill showing the436W estimated financial effect on the national insurance fund assuming a common retirement age of 63 years;
(2) if he will publish figures similar to those in table 1 of Cm 2714 on the Pensions Bill 1994 giving an estimate of the costs of national insurance benefits assuming a common retirement age of 63 years.
§ Mr. ArbuthnotThe tables published in the Government Actuary's report, Cm 2714, have been produced to support the financial effects of the proposals in the Pensions Bill. Several options for the equalisation of state pension age have been examined and estimates of their financial effects published in the consultation documents, "Options for Equality in State Pension Age", Cm 1723, and the White Paper, "Equality in State Pension Age", Cm 2420, copies of which are held in the Library. These are the most recent figures available.