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