Clause 3
Welfare Reform Bill
9:10 am
Jim Murphy (Minister of State (Work), Department for Work and Pensions; East Renfrewshire, Labour)
Thank you, Mr. Hood, for chairing our short proceedings this morning. From talking to hon. Members on both sides of the Committee, I know that there is an eagerness to make progress and to reach the later clauses that contain much of the substance of the Bill. I shall therefore take some encouragement from the hon. Gentleman and seek to be relatively brief in this response and, where possible, in others this morning.
I hope that I can reassure the hon. Gentleman on the point that he has raised. As he knows, the amendment would change the definition of “pension payment” by removing the reference to insurance payments that would be deducted from contributory employment and support allowance. The current legislation on IB allows certain insurance payments to be deducted, and the Bill allows for regulations setting out which insurance payments will be deducted from contributory benefit.
The regulations under the existing provision draw a distinction between payments that are made under insurance in respect of long-term ill health or disability, which are made while the person is still employed and are, therefore, equivalent to a form of sick pay, and payments that are made after employment has ended, which are more like a pension payment. Only the second type of payment will be deducted, and I hope that I can reassure the ABI on that through the hon. Gentleman. We shall not seek to deduct insurance payments funded by the employer and paid to an employee whose employment has not come to an end.
Before the rule was introduced into incapacity benefit, the principle was discussed with the ABI, which agreed that it was sensible, and we intend to bring the rule forward into the new benefit. The regulations under the clause will have exactly the same effect as the current rules, and we do not intend to extend the provision to other types of insurance payments or to payments made while a person is still in employment. With that, I hope that the hon. Gentleman will consider withdrawing the amendment.