The Pensions Increase (Review) Order 1999

Made: 1st March 1999

Laid before Parliament: 4th March 1999

Coming into force: 12th April 1999

Now therefore the Treasury, in exercise of the powers conferred by section 59(1), (2), (5) and (5ZA) of the Social Security Pensions Act 1975³ and now vested in them⁴, and all other powers enabling them in that behalf, hereby make the following Order:

Citation and commencement

1

This Order may be cited as the Pensions Increase (Review) Order 1999 and shall come into force on 12th April 1999.

Interpretation

2

• (1) In this Order—

• “the 1971 Act” means the Pensions (Increase) Act 1971⁵;

• “the 1974 Act” means the Pensions (Increase) Act 1974⁶;

• “the 1975 Act” means the Social Security Pensions Act 1975;

• “basic rate” and “derivative pension” have the meanings given by section 17(1) of the 1971 Act⁷;

• “the existing Orders” means the Pensions Increase (Annual Review) Order 1972⁸, the Pensions Increase (Annual Review) Order 1973⁹, the Pensions Increase (Annual Review) Order 1974¹⁰, the Pensions Increase (Annual Review) Order 1975¹¹, the Pensions Increase (Annual Review) Order 1976¹², the Pensions Increase (Annual Review) Order 1977¹³, the Pensions Increase (Annual Review) Order 1978¹⁴, the Pensions Increase (Review) Order 1979¹⁵, the Pensions Increase (Review) Order 1980¹⁶, the Pensions Increase (Review) Order 1981¹⁷, the Pensions Increase (Review) Order 1982¹⁸, the Pensions Increase (Review) Order 1983¹⁹, the Pensions Increase (Review) Order 1984²⁰, the Pensions Increase (Review) Order 1985²¹, the Pensions Increase (Review) Order 1986²², the Pensions Increase (Review) Order 1987²³, the Pensions Increase (Review) Order 1988²⁴, the Pensions Increase (Review) Order 1989²⁵, the Pensions Increase (Review) Order 1990²⁶, the Pensions Increase (Review) Order 1991²⁷, the Pensions Increase (Review) Order 1992²⁸, the Pensions Increase (Review) Order 1993²⁹, the Pensions Increase (Review) Order 1994³⁰, the Pensions Increase (Review) Order 1995³¹, the Pensions Increase (Review) Order 1996³², the Pensions Increase (Review) Order 1997³³ and the Pensions Increase (Review) Order 1998³⁴;

• “official pension” has the meaning given by section 5(1) of the 1971 Act;

• “pension authority” has the meaning given by section 7(1) of the 1971 Act;

• “qualifying condition” means one of the conditions laid down in section 3 of the 1971 Act³⁵;

• “relevant injury pension”, “substituted pension” and “widow’s pension” have the meanings given by section 17(1) of the 1971 Act.

• (2) For the purposes of this Order the time when a pension “begins” is that stated in section 8(2) of the 1971 Act³⁶, and the “beginning date” shall be construed accordingly.

• (3) Where, for the purposes of this Order, it is necessary to calculate the number of complete months in any period an incomplete month shall be treated as a complete month if it consists of at least 16 days.

Pension increases

3

The annual rate of an official pension may, if a qualifying condition is satisfied or the pension is a derivative or substituted pension or a relevant injury pension, be increased by the pension authority in respect of any period on or after 12th April 1999 as follows–

• (1) a pension beginning before 6th April 1998 may be increased by 3.2 per cent of the basic rate as increased by the amount of any increase under section 1 of the 1971 Act or the existing Orders;

• (2) a pension beginning on or after 6th April 1998 and before 12th April 1999 may be increased by 3.2 per cent multiplied by

$$AB$ where a A is the number of complete months in the period between the beginning date of the pension and 12th April 1999, and b B is 12.$

Increases in certain lump sums

4

In respect of any lump sum or instalment of a lump sum which became payable before 12th April 1999 but on or after 6th April 1998 there may be paid an increase of 3.2 per cent of the amount of the lump sum or instalment (as increased by the amount under section 1 of the 1971 Act or under the existing Orders) multiplied by

$$AB$ where a A is the number of complete months in the period between the beginning date for the lump sum or, if later, 6th April 1998 and the date on which it became payable; and b B is 12.$

Reductions in respect of guaranteed minimum pensions

5

The amount by reference to which any increase in the rate of an official pension provided for by this Order is to be calculated shall, in the case of a person–

• (a) who is entitled to a guaranteed minimum pension on 12th April 1999; and

• (b) whose entitlement to that guaranteed minimum pension arises from an employment from which (either directly or by virtue of the payment of a transfer credit) entitlement to the official pension also arises,

be reduced by an amount equal to the rate of the guaranteed minimum pension unless the Treasury³⁷ otherwise direct, in accordance with the provisions of section 59A of the 1975 Act.

6

The amount by reference to which any increase in the rate of a widow’s or widower’s pension provided for by this Order is to be calculated shall, where the pensioner becomes entitled on the death of the deceased spouse to a guaranteed minimum pension, be reduced in accordance with section 59(5ZA) of the 1975 Act.

Signed

Bob Ainsworth — Jim Dowd — Two of the Lords Commissioners of Her Majesty’s Treasury — 1st March 1999

Explanatory note

(This note is not part of the Order)

Under section 59 of the Social Security Pensions Act 1975 as amended, and as modified by section 59A of that Act, the Treasury (in whom the functions conferred by those provisions are now vested) are required to provide by order for the increase in the rates of public service pensions. The increase is the percentage (or in some circumstances a fraction of the percentage) by which the Secretary of State for Social Security has, by direction given under the provisions of section 151(1) of the Social Security Administration Act 1992, increased the sums referred to in section 150(1)(c) of that Act. These are the sums which are the additional pensions in long term benefits, namely the additional pension entitlements accruing to employees in respect of earnings after 5th April 1978.

For pensions which began before 6th April 1998 the increase is 3.2 per cent. For pensions which began on or after 6th April 1998 the increases are as follows—

Deferred lump sums beginning on or before 27th March 1999 and which become payable after 11th April 1999 receive the same percentage increase as pensions which began on the same date. Article 4 of the Order provides for increases on certain deferred lump sums which became payable on or after 6th April 1998 and before 12th April 1999.

The Order also makes provision for the amount by reference to which any increase in the rate of an official pension is to be calculated to be reduced by the amount equal to the rate of the guaranteed minimum pension entitlement deriving from the employment which gives rise to the official pension. This is required by section 59(5) of the Social Security Pensions Act 1975. However by virtue of section 59A of that Act and the Transfer of Functions (Minister for the Civil Service and Treasury) Order 1981 the Treasury are empowered to direct that in respect of specified cases or classes of case either no such reduction be made or the reduction shall be less than the rate of the guaranteed minimum pension. Section 59(5ZA) was inserted into section 59 by section 5 of the Pensions (Miscellaneous Provisions) Act 1990. This applies section 59(5) to a widow’s or widower’s pension.

Footnotes