Clause 2
Pensions Bill
4:00 pm
James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick and Leamington, Labour)
Both parties have to have reached retirement age. I am just about to clarify such matters. My hon. Friend has anticipated the material to which I am about to refer.
A person can only qualify for a category B pension if their own entitlement to a category A basic pension is lower than a category B rate. For example, a married woman with entitlement to a category A pension at50 per cent. of the standard rate would have her pension topped up by 10 per cent. to the category B rate.
Under the current rules, a person cannot qualify for a category B pension until both he or she and his or her spouse or civil partner have reached pension age, and the spouse or civil partner has actually claimed his or her category A pension. This clause removes just the latter restriction—one that limits choice and that can create complicated decisions on whether to defer drawing state pension.
To help my hon. Friend and other members of the Committee with an illustration, let me introduce Mr. and Mrs. Jones. Mr. Jones is considering deferring his category A pension because he plans to work on for two years after reaching state pension age, but Mrs. Jones has already reached state pension age and is drawing a small category A pension based on her own contributions. If Mr. Jones defers his pension, then Mrs. Jones will not qualify for her category B pension until he eventually claims. So, Mr. Jones faces an invidious choice. He would like to accrue deferral benefits—a lump sum or extra weekly pension—on his own pension, but that would mean that his wife would not be able to draw her pension.
Clause 2 solves this dilemma: Mrs. Jones will be able to draw her category B pension from the point that Mr. Jones reaches state pension age, regardless of whether he decides to defer. The change will apply from 2010 to both existing and future claims. The proposal will simplify the claims process and enable people to make an independent claim for their state pension. They will no longer be dependent on their spouse’s decision. That will make it easier for people to understand what they may claim and when they may claim it, and for those reasons I urge hon. Members to support this clause.