Clause 11
Pensions Bill
4:15 pm
James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge and Hyde, Labour)
This series of technical amendments is intended to maintain the current arrangements on widowed parent’s allowance, set out in previous state second pension legislation. The allowance is paid to those widows, widowers and surviving civil partners who are under state pension age and have care of at least one child.
Currently, people receiving widowed parent’s allowance get an additional pension based on the value of their late spouse’s or civil partner’s SERPS or state second pension accruals. When the late spouse or civil partner dies before reaching state pension age, the calculation of the survivor’s additional pension takes into account the fact that the deceased’s working life had been foreshortened. That allows the deceased’s earnings to be averaged over a shorter period, to the widowed parent’s advantage. If, for example, the working life had been five years, the average would be over those five years rather than over a whole theoretical working life.
For pensioners, we intend to move away from that averaging so that we can arrive at a much simpler system—the flat rate of £1.40 that I mentioned. Pensioners will not lose out because the earnings uprating of the basic state pension more than makes up for any shortfall caused by the removal of the complexity. However, if we were to bring recipients of widowed parent’s allowance fully into state second pension reforms, there would be a chance that some younger widows, widowers or surviving civil partners would lose out overall. That is not our intention.
Our amendments will ensure that those people’s pensions will continue to be calculated on the same basis as now, and I hope that the Committee will support them.
I repeat that we do not want to change the position of widows, widowers or surviving civil partners. That is why we have taken the earliest opportunity to amend the Bill.