Social Security Benefits

Work and Pensions written question – answered on 8th May 2008.

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Photo of Danny Alexander Danny Alexander Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey

To ask the Secretary of State for Work and Pensions

(1) what benefits administered by his Department are uprated in line with a measure of (a) prices and (b) earnings broken down by measure used;

(2) what benefits administered by his Department are uprated annually under statute broken down by those uprated in line with (a) prices and (b) earnings; and if he will make a statement.

Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions

The powers to review and alter the rate of benefits are contained in the Social Security Administration Act 1992 (Sections 150 to 154). Sections 150 and 150A of that Act prescribe the benefits that must be reviewed on an annual basis and how they are to be uprated. The annual change in the retail prices index is used to uprate the following benefits, which, by statute, must be reviewed and up-rated annually at least in line with prices;

State Pensions (with the exception of the age addition);

Additional Pensions paid with State Pension and Widows' Benefits;

Increments: for the deferment of State Pension and Guaranteed Minimum Pensions;

Incapacity Benefit;

Attendance Allowance;

Severe Disablement Allowance;

Carer's Allowance;

Disability Living Allowance;

Industrial Injuries Benefits (including old cases);

Adult and Child Dependants Increases (The Child Dependants Increase is fixed in practice);

Widows Benefit and Bereavement Benefit rates (with the exception of Bereavement Payment), which are currently linked to the basic State Pension rate.

The standard minimum guarantee in pension credit must be reviewed and increased at least in line with earnings. The usual measure is the May to July headline figure for the whole economy, seasonally adjusted and including bonuses. However, for the April 2008 uprating, the increase was 4.2 per cent. in line with the Budget 2007 announcement which more than keeps pace with prices and earnings.

During the next Parliament we will re-link the uprating of the basic state pension to average earnings. Our objective, subject to affordability and the fiscal position, is to do this in 2012, but in any event by the end of the next Parliament at the latest.

For the full list of Social Security benefits and the basis on which they are currently up-rated I refer the hon. Member to the reply given on 4 February 2008, Hansard, column 857W.

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