Select Committee on Delegated Powers and Deregulation Seventeenth Report



CLAUSE 55 - SPECIAL SCHEMES FOR CLAIMANTS OF JOBSEEKER'S ALLOWANCE

305. Clause 55 provides for the introduction of special schemes for Jobseeker's Allowance claimants. These will be known as Employment Zones. They will provide the opportunity to offer flexible support to a number of long-term unemployed Jobseeker's Allowance claimants in areas of greatest need. In geographically defined areas, funding available for jobsearch, training and the equivalent of benefit money will be combined and used to assist people back into employment.

306. It is important that Employment Zones are flexible enough to react quickly to developments in the labour market. The detailed rules also need to be capable of being amended quickly to take account of changes to benefit rules (in particular, Jobseeker's Allowance) which are provided for in secondary legislation. For these reasons the Department believes that the detailed rules for Employment Zones are more appropriate for regulations than primary legislation.

307. This is not a new approach to employment programmes. Schemes which are funded using the provisions of the Employment and Training Act 1973, such as the New Deal for young unemployed people, are also underpinned by amendments to the Jobseeker's Allowance Regulations. For example, the circumstances in which someone can be subject to a sanction and, therefore, have their entitlement to Jobseeker's Allowance stopped or reduced for refusing to take part.

308. The clause contains two delegated powers - at subsections (1) and (7). Subsection (1) enables regulations to provide for special arrangements to be made for Jobseeker's Allowance claimants to participate in prescribed schemes in geographically defined areas designed to help them obtain sustainable employment. The Government intend to use this power to make regulations which provide for the establishment of Employment Zones. Subsections (2) and (3) further describe the regulations which can be made under the power described in subsection (1).

309. Subsection (2)(a) provides examples of regulations which could be made under subsection (1). For example, regulations may prescribe a period within which additional conditions for entitlement to Jobseeker's Allowance can be applied to participants in schemes prescribed under subsection (1). The Government intends that these additional conditions would take the form of requirements, set out in regulations, for claimants to take steps to improve their employment prospects. Employment Zone participants could, where appropriate, be required to agree an Action Plan with their Personal Adviser as a pre-condition for receiving Jobseeker's Allowance. This would apply during the period of their participation in the Employment Zone. Similar to a Jobseeker's Agreement, this Action Plan will include the details of the arrangements, be they training or otherwise, that the participant will undertake in order to get back into employment.

310. Subsection (2)(b) provides further examples of the type of regulations that could be made under subsection (1), namely where regulations could prescribe a period within which conditions which would otherwise apply to scheme participants can be suspended, and to prescribe the conditions thus suspended. As participants will be required to complete and agree an Action Plan with their Personal Advisor (see subsection (2)(a) above), they would not be expected to also complete a Jobseeker's Agreement. Therefore, the Government intend to use regulations to suspend the requirement to have a Jobseeker's Agreement as a condition for receiving Jobseeker's Allowance. There may be circumstances where an individual is participating in an Employment Zone and, either through undertaking private study or research with a view to obtaining sustainable employment, is not actually meeting the requirements in the Jobseekers Act to be actively seeking employment. In these cases the Government intends to use regulations to suspend the requirement for the participant to be actively seeking work as a condition for receiving Jobseeker's Allowance.

311. The innovative and flexible nature of Employment Zones means that schemes will be tailored to reflect the individual needs of participants. It is, therefore, possible that further amendments (in addition to those mentioned above) to the Jobseeker's Allowance Regulations will be identified as necessary once the various schemes have been developed further or when they begin to operate. In this case, changes to the Jobseeker's Allowance Regulations will also be made using the regulation-making powers in subsection (1).

312. Subsection (3) sets out that regulations made under subsection (1) may modify the provisions of the Jobseekers Act 1995 for the purposes of prescribed schemes. This is necessary because, for example, the Government intends to alter some of the circumstances under which payment of Jobseeker's Allowance can be withheld due to a sanction (section 19 of the Jobseekers Act 1995). It is intended to provide in regulations that failure to attend an Employment Zone without good cause, or failure to complete an Action Plan, will be reasons under which an individual can have their entitlement to Jobseeker's Allowance stopped.

313. Subsection (7) enables the Secretary of State to employ the existing powers in section 26 of the Employment Act 1988 (Status of Trainees) to specify both the employment status of participants in training schemes within Employment Zones and also the way in which sums paid to all participants are to be treated for the purposes of other legislation, such as that governing liability to tax and National Insurance contributions. This follows precedent enabling such matters to be dealt with in the same way as they are dealt with outside Employment Zones, that is by a single order rather than through numerous amendments to the legislation concerned. For example, a miscellaneous provisions order (New Deal (Miscellaneous Provisions) Order 1998 (S.I. No 1998/217) was used to make clear the employment status of participants in the New Deal for 18-24 year olds.

CLAUSE 56 - INCAPACITY FOR WORK: PERSONAL CAPABILITY ASSESSMENTS

314. Clause 56 inserts a new section 171C of the Contribution and Benefits Act, which provides for the All Work Test. New section 171C for the most part mirrors the existing provision for the All Work Test, but renames it the Personal Capability Assessment. In addition, it enables the Personal Capability Assessment to be carried out during the period when the own occupation test applies, before a person is required to undergo a Personal Capability Assessment for benefit purposes. The clause also makes clear that the personal capability assessment may be repeated, to determine whether a person continues to be incapable of work.

315. Subsection (2) of new section 171C requires provision to be made by regulations:

  • defining a personal capability assessment by reference to the extent to which a person who has some specific disease or bodily or mental disablement is capable or incapable of performing such activities as may be prescribed;
  • as to the manner of assessing whether a person is incapable of work, in accordance with a personal capability assessment.

316. This is very similar to the existing provision for the All Work Test in section 171C of the Contributions and Benefits Act. Part III of the Social Security (Incapacity for Work) (General) Regulations 1995 (S.I. No 1995/311) made under these powers prescribes the detail of the test. It sets out measures of the extent of a person's incapacity in specified activities which relate to the ability to work, covering physical, sensory and mental functions such as walking, sitting, bending and kneeling, hearing, vision, concentration and mood. It also sets out the scoring system to be used for the purposes of determining whether a person reaches the threshold for entitlement to incapacity benefits.

317. These are matters of administrative detail which may need refining in the light of operational experience and, therefore, the Department considers them to be suitable for secondary legislation. It also follows the precedent in current legislation where the detailed rules of the All Work Test are set out in regulations.

318. It is not the Department's intention to change the criteria for determining whether a person is capable or incapable of work for benefit purposes. However, it is intended to remake the existing regulations under the new section 171C, to take account of the change of name.

319. When the provisions for the All Work Test were introduced originally, the regulations under these powers were subject to the affirmative procedure for four years afterwards. As the intention is to simply remake the existing regulations and keep the criteria the same, the Department considers that the negative procedure is now appropriate.

320. Subsection (3) of proposed new section 171C allows regulations to provide for treating people as incapable of work until they have had a Personal Capability Assessment, or have been classed as capable of work for other reasons. It ensures that incapacity benefits can remain in payment pending a decision on whether a person is incapable of work. It mirrors existing provision for the All Work Test in section 171C of the Contributions and Benefits Act. It is intended that regulation 28 of the Social Security (Incapacity for Work) (General) Regulations 1995 will be remade under the new power.

321. Subsection (4) of new section 171C enables a Personal Capability Assessment to be carried out during the first 28 weeks of incapacity when the person may be receiving Statutory Sick Pay or Incapacity Benefit under a different test of incapacity (applying during the first 28 weeks) called the own occupation test. Currently the process of assessment cannot begin until the date when the all work test applies (usually after 28 weeks incapacity) and can typically take many weeks to complete. This can mean that decisions on benefit entitlement are delayed, and that, following the introduction of the new capability element, information which would be helpful in preparing for a return to work would not be available when it would be of most value - ie before people have become detached from the labour market. This provision enables the process of assessment to begin before the 29th week and is intended to address these problems.

322. It is intended that the power to prescribe exceptions in regulations will be used to ensure that, where it is being commenced early, the personal capability assessment process starts at an appropriate time prior to the 29th week and assessments do not have validity if they are carried out too far in advance.

SCHEDULE 8 - PARAGRAPH 23 - INCAPACITY

323. Sub-paragraph (2) inserts a new subsection (2A) into section 171A of the Contributions and Benefits Act.

324. This new subsection widens the scope of the information or evidence that may be obtained from claimants under the regulation-making power in subsection (2) of section 171A of the Contributions and Benefits Act. This subsection currently provides the power to make regulations to obtain information and evidence for the purposes of determining whether a person is capable or incapable of work for benefit purposes (regulation 6 and 7 of the Social Security (Incapacity for Work) (General) Regulations 1995).

325. The new Personal Capability Assessment will have a dual function - to determine whether a person meets the threshold to be found incapable of work for benefit purposes, and to compile information about a person's capabilities generated during the assessment process into a "capability report" on what they might nevertheless be able to do with appropriate help and support. The additional capability element will not form any part of the entitlement conditions for the benefit, which will remain unchanged.

326. In practice much of the information generated during the Personal Capability Assessment process will be equally relevant to both the decision on whether a person should be treated as incapable of work for benefit purposes and to the "capability report". However, there may be additional areas which may usefully be explored which is the purpose of the new subsection (2A) - for example, what type of work the person has done previously, and what sort of help they might need to do it.

327. New subsection (2A) enables regulations to be made under the current subsection (2) to provide for the collection of information about people's work-related capabilities which could be used to assist the person in question to obtain work or improve his prospects of obtaining it.

328. The existing provision for obtaining information is in regulations. Therefore, the Department considers it appropriate for the extended provision also to be in secondary legislation, to take account of the level of detail required.

CLAUSE 57 - INCAPACITY BENEFIT: RESTRICTION TO RECENT CONTRIBUTORS

329. To qualify for Incapacity Benefit people must satisfy conditions relating to the payment of National Insurance contributions. There are two conditions and the first is that a minimum amount of National Insurance contributions has actually been paid in any one tax year. Clause 57 amends this condition to require this minimum amount to have been paid in one of the last two tax years before the claim for Incapacity Benefit. The change will apply to new claims only.

330. The second contribution condition for Incapacity Benefit requires contributions or credits equivalent to 50 times the Lower Earnings Limit in both the last two tax years. Clause 57 leaves this unchanged. People will continue to be able to satisfy this condition by credits alone - but, as now, if they have neither paid contributions nor credits in both the last two tax years they will not qualify.

331. Clause 57 contains two regulation-making powers. These are to be found in subsection (4), which inserts sub-paragraph (8) into paragraph 2 of Schedule 3 to the Contributions and Benefits Act. This enables different arrangements to be made in situations where the new conditions are not satisfied and the person was receiving certain benefits in the relevant tax years. The uses to which it is intended these powers will be put are set out below.

332. Sub-paragraph (8)(a) provides a power to make regulations which treat the first contribution condition as satisfied by people in a specified class. It is intended to apply this in the case of people who were in receipt of Incapacity Benefit in the tax year before a new claim. Without this protection, some people would be unable to re­qualify for benefit after short breaks in entitlement, as they would not have paid contributions in the relevant tax years.

333. Sub-paragraph (8)(b) provides a power to relax the first contribution condition, by applying it in a modified form to particular groups. It is intended to use this power to protect people who have paid contributions in an earlier tax year, but who have not had the opportunity to pay contributions in the last two tax years, because they have been carrying out caring responsibilities for which they receive Invalid Care Allowance. In their case the contribution condition would be modified so that contributions paid in any one previous tax year would suffice. That would have the effect of maintaining the current contribution conditions for former Invalid Care Allowance recipients.

334. The Department considers that the detailed rules on the circumstances in which the contribution conditions are to be modified or treated as satisfied should be set out in regulations rather than primary legislation, as they are entirely beneficial and can be more easily updated via secondary legislation.

CLAUSE 58 - INCAPACITY BENEFIT: REDUCTION FOR PENSION PAYMENTS

335. Clause 58 inserts section 30DD into the Contributions and Benefits Act. It provides for Incapacity Benefit to be reduced where a claimant has income from an occupational or personal pension above an amount to be specified in regulations. The Government confirmed in the Explanatory Notes to the Welfare Reform and Pensions Bill its intention that 50% of the excess income over £50 a week would be deducted from future claims to Incapacity Benefit.

336. Section 30DD(1) contains the main regulation-making power in this clause. The new section provides for regulations to allow for income from occupational pensions, personal pensions, and public service pensions, in excess of a specified amount, to be deducted when assessing Incapacity Benefit. The provisions in the new section bring Incapacity Benefit largely into line with rules currently operating in contribution-based Jobseeker's Allowance.

337. These regulation-making powers are similar in extent to those which apply to contribution-based Jobseeker's Allowance, which already takes account of occupational and personal pension income over £50 a week. The Department believes that secondary legislation provides the necessary flexibility to deal with the level of detail needed to accommodate future policy changes and to keep the provision up to date.

338. Sections 30DD(2)(a)-(d) make clear the circumstances in which regulations may be used to provide for occupational or personal pension income to be deducted from future Incapacity Benefit claims.

339. Section 30DD(2)(a) gives details of how regulations may provide that a reduction will only be made where the pension payment exceeds the specified amount (i.e. more than £50 a week) and how much of the excess income should be deducted (i.e. 50% of it). (Regulation 81 of the Jobseeker's Allowance Regulations 1996 provides for the deduction of pension payments in Jobseeker's Allowance.)

340. Section 30DD(2)(b) gives details of how regulations may set out the circumstances in which exemptions can be made. The intention is to use this power, for example, to disregard payments where the pension payments are in connection with the death of a member of a scheme and, therefore, not a personal benefit paid in connection with the claimant's employment. Or where the income is not available because the occupational pension scheme is in deficit or has insufficient resources to pay the full pension. The intended regulations will be similar to regulation 81 of the Jobseeker's Allowance Regulations 1996.

341. Section 30DD(2)(c) gives details of how regulations can allow for a notional income to be assumed where a claimant deliberately fails to avail himself of a pension payment so as to increase or maximise his benefit. It will allow regulations to set out circumstances in which the available pension income, which the claimant has deferred, may be taken into account when assessing Incapacity Benefit. Similar regulations have already been made for Jobseeker's Allowance (regulation 105 of the Jobseeker's Allowance Regulations 1996) and Income Support (regulation 42 of the Income Support (General) Regulations 1987 (SI 1967/1987) ) and it is intended to mirror these.

342. Section 30DD(2)(d) gives details of how regulations can apportion pension payments into weekly payments. For example, this will enable monthly pension payments to be converted into weekly amounts so that they can be deducted from Incapacity Benefit on a weekly basis. Again this follows the approach currently taken in contribution-based Jobseeker's Allowance in regulation 81 of the Jobseeker's Allowance Regulations.

343. Section 30DD(3)(b) provides a power to prescribe other types of pension, or similar income, for which a deduction may be made. The Department intends to use the power to prescribe that 50% of certain permanent health insurance payments in excess of £50 a week should be deducted from future Incapacity Benefit claims. This would apply to those permanent health insurance schemes that are arranged by employers to provide for employees, where the contract of employment has ended. It would not be applied to schemes arranged by employers to fund ordinary occupational sick pay. Nor would it apply to permanent health insurance taken out by individuals.

344. Section 30DD(3)(c)) provides a power to specify other types of payments for which a deduction may be made. This enables income to be taken into account if new products are developed which provide similar income to occupational and personal pensions or permanent health insurance.

CLAUSE 59 - INCAPACITY BENEFIT: PERSONS INCAPACITATED IN YOUTH

345. Clause 59 allows people aged between 16 and 19 (or in certain circumstances, 24), who would currently claim and receive Severe Disablement Allowance, to claim Incapacity Benefit without having to satisfy the usual contribution conditions.

346. This clause contains three regulation-making powers - subsection (3)(2A)(b) and (d) and subsection (5).

347. The Department believes that the level of technical detail necessary makes these provisions suitable for secondary legislation. It will also enable the provisions to be adapted or extended to take into account any future changes in the benefit system.

348. Subsection (3) inserts a new subsection (2A) into section 30A of the Contributions and Benefits Act 1992 (Incapacity Benefit entitlement). To be entitled to Incapacity Benefit without having satisfied the contribution conditions, a person must:

  • have become incapable of work before the age of 20, or 25 in prescribed circumstances;
  • satisfy conditions of residence and presence in Great Britain;
  • not be in full-time education; and
  • have been continuously incapable of work for at least 196 days (28 weeks).

The overall intention is to ensure that the benefit is targeted at those with long-term incapacity for work.

349. Subsection (2A)(b) provides the power to extend the age 20 cut-off to 25 in prescribed circumstances. It is intended to use this power to prescribe in regulations that students who undertake any course of education leading to a degree, or diploma of higher education or any other course which is of an equivalent standard, will be able to claim Incapacity Benefit, up to the age of 25, without having to satisfy the contribution conditions. This is provided that they attended the course immediately before they were 20, and they finished their course no earlier than in one of the last 2 complete tax years prior to the year in which benefit is claimed. There will be similar provisions for people who undertake vocational or occupational training.

350. Subsection (2A)(d) allows for regulations to define the residence and presence conditions. It is intended to use this power to require that claimants should be ordinarily resident and present in Great Britain on the date of entitlement and be present in Great Britain for at least 26 weeks in the 52 weeks immediately preceding that day. It is also intended to make provisions to assist families of members of Her Majesty's Armed Forces to satisfy the past presence condition because of their unique position when serving overseas.

351. Subsection (5) inserts a new subsection (6) into section 30A of the Contributions and Benefits Act 1992 and provides a power to prescribe the circumstances in which a person is or is not to be treated as receiving full-time education. It is intended to use this power to define in regulations "full-time education" as applying only to people aged 16-18, and to provide that, in order to qualify for benefit, they must spend less than 21 hours a week in education (excluding any time spent on a course not normally taken by a non­disabled student).

352. Similar provisions as to residence and presence and full-time education are currently provided for in existing Severe Disablement Allowance regulations. (Regulations 3 and 8 respectively of the Severe Disablement Allowance Regulations 1984 (S.I. No 1303/1984)).

CLAUSE 61 - ATTENDANCE ALLOWANCE

353. Currently, the rules that specify the conditions of entitlement, and the circumstances, in which a person qualifies for Attendance Allowance, are set out in primary legislation in the Contributions and Benefits Act.

354. Conversely, the detailed rules of entitlement for Disability Living Allowance, which is a very closely related benefit, are provided for in regulations. The approach taken in Disability Living Allowance is very similar to that taken for most other social security benefits. The current situation means though that it is not possible to introduce changes to Attendance Allowance and Disability Living Allowance simultaneously through regulations.

355. Subsection (1) of clause 61 adds a new subsection (4) to section 64 of the Contributions and Benefits Act (entitlement to Attendance Allowance). It allows for regulations to prescribe the circumstances in which the night attendance or day attendance conditions of entitlement are to be taken as met or not met.

356. There are no current plans to use this power to change the conditions of entitlement to Attendance Allowance. However, it will enable the Government to ensure alignment between Attendance Allowance and Disability Living Allowance is maintained by being able to make changes to both benefits quickly and at the same time.

CLAUSE 64 - CHILD BENEFIT: CLAIMANT TO STATE NATIONAL INSURANCE NUMBER

357. Clause 64 introduces amendments to section 13 of the Social Security Administration Act 1992 making entitlement to Child Benefit conditional on the production of a national insurance number. This brings Child Benefit into line with other benefits where the requirement to produce a national insurance was introduced in section 19 of the Social Security Administration (Fraud) Act 1997. As with other benefits, all people claiming Child Benefit will be required either to state their national insurance number, giving proof that it is theirs, or to provide information that would enable them to be allocated a national insurance number. This applies to the adult claimant (usually a parent), rather than the child on whose behalf Child Benefit is claimed (children under 16 would not normally have national insurance numbers).

358. Subsection (1C) of section 13 enables regulations to be made to exempt certain categories of people from the requirement of producing a national insurance number. The Government intends to make regulations to exempt certain members of the armed forces who marry or partner foreign nationals who, when they claim Child Benefit, may not have a national insurance number and at the time are living abroad. Additionally, claims made in respect of certain children who are in the care of a charitable or voluntary body such as Barnardo's, rather than in the care of a specific person(s). Subsection (1C) also provides a regulation-making power to add other prescribed circumstances for exemption enabling the legislation to reflect future changes which may be required. This follows the power in section 1(1C) of the Social Security Administration Act 1992 (inserted by section 19 of the Social Security Administration (Fraud) Act 1997).

359. In consideration of the degree of detail necessary to provide for the exemptions, and to enable it to react quickly to future changes, the Department views secondary legislation as being more suitable.


 
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