Clause 8 - Choice of lump sum or survivor’s pension under section 9 in certain cases

Pensions Bill – in a Public Bill Committee at 4:15 pm on 2nd July 2013.

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Question proposed, That the clause stand part of the Bill.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

One complexity of the state pension system is that if the person to whom someone is married dies before they have drawn their pension, the surviving spouse can have either a lump sum—the pension that their spouse would have drawn—or a survivor’s pension. Again, this is in the circumstances in which the person died under the present system and the surviving spouse is under the new system.

This clause ensures that a single-tier pensioner can inherit a lump sum or an increment from their late spouse or civil partner if the deceased had deferred their old-scheme state pension. The details of the clause cover the choice of payment and inheritance of a lump-sum payment. Clause 9 provides for inheritance of increments, and schedule 5, which I will move formally, sets out the circumstances that apply and determines the amount payable. I therefore commend clause 8 to the Committee.

Photo of Gregg McClymont Gregg McClymont Shadow Minister (Work and Pensions)

I thank the Minister for that explanation of clause 8. Can he clarify the age from which one can derive this benefit? Is there a minimum age that one must reach before one can have the benefit of inheriting what he described?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I am grateful to the hon. Gentleman for giving way. Clearly, as we said at the start of proceedings on the Bill, people can draw a pension under the terms of the Bill only when they have reached the state pension age under the Bill. They can then inherit a pension in respect of someone to whom they were married who has died, who may be a single-tier pensioner or not. The rules are different, but they have to be in excess of state pension age to draw this payment.

Photo of Gregg McClymont Gregg McClymont Shadow Minister (Work and Pensions)

I thank the Minister for that explanation of clause 8. I have nothing further to add.

Question put and agreed to.

Clause 8 accordingly ordered to stand part of the Bill.