Clause 5 - Income and capital of claimant, spouse, etc
State Pension Credit Bill [Lords]
10:30 am
Mr James Clappison (Hertsmere, Conservative)
I beg to move amendment No. 26, in page 4, line 4, leave out 'except in prescribed circumstances'.
We now come to the question of aggregating the income and capital of couples for the purpose of determining entitlement to the pension credit. Generally speaking, joint assessment of couples and the way in which that compares with the principle of separate assessment under taxation has been one of the features of tax credits commented on in many quarters. That principle of joint assessment applies equally to other forms of tax credit: the working tax credit, and now the child tax credit. As many people have said, that cuts across the principle of independent taxation. However, it is in the Bill and we must consider it.
Under clause 5, any income or capital of the claimant's partner, whether they are married or not, is treated as the income or capital of the claimant for the purposes of the pension credit income assessment. The only exceptions to that rule are circumstances that are to be prescribed in regulations. The amendment is probing, and will explore what such circumstances might be, if the Minister can throw any light on that. We note that the explanatory notes cite two examples of circumstances where joint assessment would not take place that may be prescribed in regulations. The examples are:
''where a partner receives income from a trust, or capital is held in trust, for a third party who is not part of the income assessment unit; or similarly, where the partner is the appointee or holds power of attorney for the financial affairs of a third party who, again, is not part of the assessment unit.''
In such circumstances, it seems intuitively right that income or capital should not fall into the assessment for pension credit purposes. Indeed, it seems inconceivable that it should do so. The person concerned—the claimant or the partner—is not receiving any benefit from that, and is acting under a duty when dealing with it. The examples seem to imply that where the person concerned is under a duty to deal with income or capital for the benefit of a third party, and receives no benefit himself, that will not be taken into account. However, the underlying principles are not exactly spelt out, and it would be useful to hear something from the Minister on that.