Child Support, Pensions and Social Security Bill, Northern Ireland Assembly

CHILD SUPPORT, PENSIONS AND SOCIAL SECURITY BILL

EXPLANATORY AND FINANCIAL MEMORANDUM

INTRODUCTION

This Explanatory and Financial Memorandum relates to the Child Support, Pensions and Social Security Bill. It has been prepared by the Department for Social Development in order to assist the reader in understanding the Bill and to help inform debate on it. It does not form part of the Bill and has not been endorsed by the Assembly.
The Memorandum needs to be read in conjunction with the Bill. It does not, and is not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.

BACKGROUND AND POLICY OBJECTIVES

The Bill makes provision for Northern Ireland corresponding to provisions of the Child Support, Pensions and Social Security Act 2000 (c. 19). It is a further step in the programme for reform, which began with the Social Security (Northern Ireland) Order 1998 (the 1998 Order) and continued in the Welfare Reform and Pensions (Northern Ireland) Order 1999 (the 1999 Order).
There are three main elements in the Bill:

Part I: child support reform;
Part II: pensions reform; and
Part III: social security reform.

The child support provisions will replace the existing formula with a simpler system of rates and clarify the responsibilities of parents. They include:

the processes for applying for child support and the rates used for calculating maintenance liability based on 15 per cent. of the non-resident parent's income for one child, 20 per cent. for two children and 25 per cent. for three or more children;
clarification of what is to be treated as income;
penalties for parents who deliberately misrepresent their financial circumstances or fail to provide information needed to calculate maintenance liability;
arrangements for variation of the normal rates of maintenance liability in exceptional circumstances;
rights to dispute and appeal decisions on child support liability; and
penalties for late and non-payment and improvements to the provisions for establishing paternity.

The pensions provisions include:

reform of State Earnings Related Pension Schemes (SERPS) by the introduction of the State Second Pension;
access to improved pension information for individuals; and
further reform of the regulation of occupational and personal pension schemes.

The social security provisions include:

measures to withdraw or reduce benefit entitlement where an offender has breached the terms of a community sentence;
clarification and alignment of the powers of inspectors, which currently differ between different benefits and child support;
measures to align the arrangements for decision-making and appeals in Housing Benefit (HB) with those applying to other social security benefits; and
measures to remove the discretion of the Housing Executive to recover overpayments resulting from tenant fraud from a landlord (except in cases of collusion) where the landlord has reported the alleged fraud.

CONSULTATION

Prior to the introduction of the Child Support, Pensions and Social Security Bill in the Westminster Parliament the Department of Social Security issued a number of consultation documents. The consultation was carried out on a United Kingdom basis and the responses were taken into account when developing the provisions of that Bill. Consequently, they are reflected in the content of this Bill.
Full details of the consultation documents are set out below.

Child support consultation

The consultation document CHILDREN FIRST: a new approach to child support (Cm 3992) was published in July 1998, followed by a White Paper A new contract for welfare: CHILDREN'S RIGHTS AND PARENTS' RESPONSIBILITIES (Cm 4349) published on 1 July 1999. The White Paper identified a number of problems with the current system:

a very small proportion of the children requiring child support see the benefit of all the maintenance that is due;
the complexity of the formula leads to long delays in assessing liability, which makes it difficult to ensure regular payment of child support; and
families living on Income Support (IS) or income-based Jobseeker's Allowance (JSA) receive no financial gain from the payment of maintenance as their benefit is reduced by an amount equal to the amount of maintenance paid.

The key changes proposed in the White Paper were:

simplification of the way in which child support maintenance is assessed, by replacing the complex formula with a percentage of the non-resident parent's net income;
the introduction of a child maintenance premium in IS and income-based JSA, which will allow families receiving these benefits to keep up to £10 a week of the maintenance paid for their children;
strengthening the sanctions regime to improve compliance with maintenance requirements;
directing a greater proportion of the resources of the Child Support Agency (CSA) to making sure that maintenance is paid on time and sorting out disputes about liability or payment arrangements as soon as possible, and whenever possible without the need to resort to an appeal tribunal.

Pensions consultation

Proposals for reform of the pension system were set out in the Green Paper A new contract for welfare: PARTNERSHIP IN PENSIONS (Cm 4179) published in December 1998. The key principles were:

to improve pensions for low earners and carers by reforming SERPS with a more generous State Second Pension;
to introduce stakeholder pensions for moderate and high earners; and
to continue to support and strengthen the framework for occupational pension provision.

The legislative framework for stakeholder pensions is contained in the 1999 Order and it is intended to implement these provisions from April 2001.
In addition to the United Kingdom consultation the Department issued three consultation papers:

Defined Contribution Pension Schemes: Indexation, dealing with the restriction on index linking where an annuity is tied to investments;
Occupational Pension Schemes in Wind-up: Speeding up the Process; and
Member Nominated Trustees and Directors - a Consultation Document, dealing with the nomination of trustees or directors of an occupational pension scheme by members of the scheme.

OVERVIEW

The Bill has 69 clauses and 9 Schedules. It makes major amendments to:

the Child Support (Northern Ireland) Order 1991 (the Child Support Order);
the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (the Contributions and Benefits Act);
the Social Security Administration (Northern Ireland) Act 1992 (the Administration Act);
the Pension Schemes (Northern Ireland) Act 1993 (the Pension Schemes Act); and
the Pensions (Northern Ireland) Order 1995 (the Pensions Order);

It also makes minor and consequential amendments to a number of other statutory provisions.

COMMENTARY ON CLAUSES

Part I: Child Support

Maintenance calculations and default and interim maintenance decisions

Clause 1: maintenance calculations and terminology

Clause 1 provides the simplified basis for the maintenance calculation and the percentage rates, which will be used to determine maintenance liability. It is intended that the maintenance calculation should be based on one of three rates, a basic rate, a reduced rate or a flat rate.

The general rule is that there should be a basic rate of liability based on a percentage of the non-resident parent's net weekly income. The percentages applied will depend on whether the non-resident parent is liable to pay maintenance for one, two or three or more children. Where the non-resident parent is also responsible for children living in his household the basic rate is calculated by applying the percentages to the non-resident parent's net weekly income after this has been reduced to take account of those other children.
A reduced rate of liability will be payable where the non-resident parent's net weekly income is more than £100 but less than £200.
A flat rate will be payable:

if the net weekly income of the non-resident parent is £100 or less;
if that parent receives a prescribed benefit, pension or allowance, or
that parent or a partner receive any prescribed benefit.

It is also intended that certain categories of non-resident parent (including those with a net weekly income below £5) will have a nil rate of liability.

Subsection (1) substitutes Article 13 of the Child Support Order.
Article 13 (maintenance calculations) places a duty on the Department to make a maintenance calculation. It provides for the purposes of revision, supersession and appeal, that the outcome of the calculation is a decision about whether child support maintenance is payable.
Article 13(1) and (2) provides that the Department shall deal with an application for a maintenance calculation in accordance with the Child Support Order and make a decision about whether, and if so how much, child maintenance is payable, or decide not to make a calculation, or make a decision under Article 14.
Article 13(3) to (5) allows the Department to stop acting on an application treated as made under Article 9(3) if the parent with care ceases to fall within Article 9(1). However, if a parent with care wishes the application to be treated as an application under Article 7, and there is no court order or pre-1993 written maintenance agreement in place preventing this, then that parent has one month to respond to the letter advising that the Department intends to stop acting. Where the parent with care is content for the Department to stop acting on the application, but the non-resident parent has already been contacted, then the non-resident parent must be notified. If the parent with care is prevented from applying under Article 7 then that parent must be notified of this.
Article 13(6) provides that the amount of a maintenance calculation shall be determined in accordance with Part I of Schedule 1 to the Child Support Order.
Article 13(7) provides for maintenance where a variation has been agreed. Article 13(8) refers to the further provisions about maintenance calculation in Schedule 1.
Subsection (2) amends the terminology used in the Child Support Order as follows:

"maintenance calculation" replaces "maintenance assessment"; and
"calculation" replaces "assessment".

Subsection (3) substitutes Part I of Schedule 1 to the Child Support Order with new provisions dealing with the calculation of the weekly amount of child support maintenance.

Paragraph 1: general rule

Paragraph 1 lays down the basis for calculating child support liability.

Sub-paragraph (1) provides for child support liability to be calculated at the basic rate except where rules provide that a reduced rate, flat rate or nil rate liability is appropriate.
Sub-paragraph (2) provides for the amount payable to the person with care to be the amount calculated using the appropriate rate or, where there is more than one person with care, a proportion of that amount in either case, reduced as necessary where the non-resident parent shares the care of a qualifying child.

Paragraph 2: basic rate

Paragraph 2 provides the rules for determining the basic rate for child support liability.

Sub-paragraph (1) provides for the basic rate to be calculated at a set percentage of the non-resident parent's net income. Where the non-resident parent is liable for maintenance for one qualifying child the basic rate is 15 per cent. For two children the basic rate is 20 per cent. and for three or more children the basic rate is 25 per cent.
Sub-paragraph (2) provides for the non-resident parent's net income to be reduced by 15, 20 or 25 per cent. before the provisions of sub-paragraph (1) are applied where he has one, two or three or more relevant other children living with him.

Paragraph 3: reduced rate

Paragraph 3 provides the rules for determining which non-resident parents will have their liability calculated at a reduced rate.

Sub-paragraph (1) provides that a reduced rate is payable if the non-resident parent's net income is less that £200 but more that £100, unless that parent is liable for the nil rate or flat rate.
Sub-paragraph (2) provides for the reduced rate, or the method of calculating that rate, to be set out in regulations.
Sub-paragraph (3) prohibits the regulations from prescribing a rate of less than £5.

Paragraph 4: flat rate

Paragraph 4 provides the rules for determining which non-resident parents will have a flat rate liability.

Sub-paragraph (1) provides for the flat rate to apply if the non-resident parent has a net weekly income of £100 or less, that parent is in receipt of a prescribed social security benefit, pension or allowance or that parent or a partner is in receipt of prescribed benefits.
Sub-paragraph (2) allows regulations to provide for the flat rate to be payable at a different amount where the non-resident parent has a partner who is also liable to pay child support maintenance, and either the non-resident parent or the partner is in receipt of a prescribed benefit (intended to be IS or income-based JSA). For example, in a case where both members of a couple in receipt of IS are non-resident parents, it is intended that the regulations will specify that the non-resident parent's liability shall be one half of the flat rate amount.
Sub-paragraph (3) provides for prescribed social security benefits, pensions and allowances to include those paid to non-resident parents under the laws of countries other than the United Kingdom, for example Retirement Pension (RP) paid to a national of the European Union.

Paragraph 5: nil rate

Paragraph 5 provides that the non-resident parent who has an income of below £5 or is of a prescribed description will be liable for a nil rate. It is intended that the categories will include full-time students in advanced level education and prisoners.

Paragraph 6: apportionment

Paragraph 6 deals with cases where there is more than one person with care and more than one qualifying child in respect of the same non-resident parent. In these circumstances, the maintenance liability of the non-resident parent will be apportioned between the persons with care. The non-resident parent's liability will be divided by the number of qualifying children and shared between the persons with care in proportion to the number of qualifying children in each family.

Paragraph 7: shared care - basic and reduced rate

Paragraph 7 sets out the rules for adjusting maintenance liability where the non-resident parent shares the care of a qualifying child and the maintenance liability is calculated at the basic or reduced rate.

Sub-paragraph (1) restricts a reduction in liability for shared care to maintenance payable at the basic or reduced rate.
Sub-paragraphs (2) to (4) provide for the amount payable to the parent with care to be adjusted where the non-resident parent has overnight care of the child for at least 52 nights in a prescribed 12 month period. The amount will be reduced by one seventh for care on 52 to 103 nights, by two sevenths for care on 104 to 155 nights, by three sevenths for care on 156 to 174 nights and by one half for care on 175 or more nights. Where a period of 12 months is not appropriate, regulations will specify a different period.
Sub-paragraph (5) provides that where the parent with care is caring for more than one qualifying child of the same non-resident parent then the reduction will be the sum of the relevant fractions divided by the number of qualifying children. For example, where the non-resident parent shares the care of two children, one for an average of one night a week and the other for an average of two nights a week, his liability is reduced by three fourteenths.
Sub-paragraph (6) provides for the maintenance liability to be reduced by a further £7 for each child whose care is equally shared.
Sub-paragraph (7) restricts the amount by which the provisions of this paragraph can reduce liability, so that the non-resident parent cannot have a liability of less than £5. Where there is more than one person with care and more than one qualifying child in respect of the same non-resident parent, this sum will be apportioned between the persons with care in accordance with the provisions of paragraph 6.

Paragraph 8: shared care - flat rate

The provisions of paragraph 8 apply where the non-resident parent has a flat rate liability because:

he is in receipt of a prescribed social security benefit, pension or allowance;
he or his partner receives prescribed benefits; or
he or his partner receives prescribed benefits and both are non-resident parents.

Sub-paragraph (2) provides that where a non-resident parent shares the care of a qualifying child for at least 52 nights in total during a prescribed 12 month period, his liability to the parent with care of the child will be nil. However, his liability to any other parent with care to whom he is liable to pay maintenance will remain.

Paragraph 9: regulations about shared care

Paragraph 9 allows regulations to specify what counts as shared care, which nights count and which do not count as shared care and for the calculations to be based on periods other than 12 months.

Paragraph 10: net weekly income

Paragraph 10 enables regulations to set out how the net weekly income of the non-resident parent is to be calculated. The intention is to take account of income tax, National Insurance Contributions (NICs) and contributions to an Inland Revenue approved pension scheme. Sub-paragraph (2) allows the Department to estimate a non-resident parent's income, or to make an assumption as to any fact where it considers that the information it holds is incomplete or not truly representative. Sub-paragraph (3) sets a limit of £2,000 on the amount of net weekly income which is to be used in the calculation of maintenance.

Paragraph 10A: regulations about rates, figures, etc.

Paragraph 10A allows regulations to adapt the percentages and amounts used to set the maintenance rates and to revise the number of nights and fractions used to adjust the maintenance calculation where care of a child is shared. It also provides that the net weekly income limit used in the calculation of maintenance can be revised.

Paragraph 10B: regulations about income

Paragraph 10B allows regulations to define what will and what will not count as income. For example, where the Department is satisfied that a non-resident parent has intentionally deprived himself of income by working for a relative, it will be able to include that income for the purpose of calculating that parent's maintenance liability.

Paragraph 10C: references to various terms

Paragraph 10C defines terms used in the Schedule:

"qualifying children" are children who are living apart from one or both parents, for whom the maintenance calculation falls to be made;
"relevant other children" are children in respect of whom either the non-resident parent or his partner receives Child Benefit (CB), or in respect of whom certain other prescribed conditions are met. For example, it is intended that regulations will specify that a child who does not satisfy residence conditions for CB because he has not been resident in the United Kingdom for more than 26 weeks will be regarded as a relevant other child;
a person "receives" a benefit, pension or allowance for any week for which it is paid or due to be paid;
a person's "partner" is the other member of a couple, or, in the case of a marriage under a law which permits polygamy, another party to the marriage who is of the opposite sex and is a member of the same household;
a "couple" are a man and woman who are married and members of the same household or not married and living together as man and wife.

Clause 2: applications under Article 7 of the Child Support Order

Clause 2 allows the Department to accept applications from parents who have a maintenance order made after the reforms come into effect, provided that the order has been in force for at least a year. Parents with maintenance orders in force when the reforms come into effect and those with written maintenance agreements made before April 1993 will, as now, use the courts for enforcement and variation of child support maintenance liability.
Subsection (2) amends Article 7(10) of the Child Support Order, which prevents the acceptance of applications from parents with maintenance orders, by providing for this exclusion to refer only to maintenance orders made before a prescribed date. This will be the date on which the reforms come into effect for this purpose.
Subsection (3) adds a new exclusion to cover maintenance orders made after the prescribed date, which have not been in force for at least a year.
Regulations prescribing the effective dates of maintenance calculations under paragraph 11 of Schedule 1 to the Child Support Order will set the effective date of any liability resulting from an application covered by Article 7(10)(aa) as two months after the date of the application. This will allow both parents time to consider whether they wish to re-negotiate the maintenance order before child support liability begins. The effective date of any liability is the date when the court order ceases to have effect and child support becomes payable.

Clause 3: applications by persons claiming or receiving benefit

Clause 3 substitutes Article 9 of the Child Support Order.
Article 9 (applications by those claiming or receiving benefit) treats a parent with care who is receiving benefit as applying for child support.
Article 9(1) to (3) provides that a parent with care on IS or income-based JSA may be treated as applying for child maintenance. Regulations under paragraph (1) may prescribe other benefits for the purposes of Article 9.
Article 9(4) requires the Department to notify the parent with care that he or she may be treated as having applied for a maintenance calculation, of that parent's right under paragraph (5) to request the Department not to act, and of the power to impose a reduced benefit direction under Article 43.
Article 9(6) permits Article 9(1) to apply whether or not the parent with care receives the benefit in respect of the qualifying child. A parent with care can claim benefit for a qualifying child, but benefit for the child will not be awarded in circumstances where the child has earnings, a trust fund or settlement or capital in excess of £3000.
Article 9(7) requires the parent with care to provide the Department with information to identify or trace the non-resident parent so that a child support maintenance calculation can be made and payments collected. If that parent has asked the Department not to pursue child maintenance, this requirement does not apply.
Article 9(8) provides for regulations to specify the circumstances in which the requirement to supply information does not apply or will be waived.
Article 9(9) allows a parent with care who is no longer entitled to a benefit to which this Article relates to stop child support action. The Department may continue to pursue maintenance until the parent with care asks it to cease to do so.
Article 9(10) requires the Department to comply with a request under paragraph (9) to cease acting. Regulations under Article 9(11) will set out the transitional arrangements.
Article 9(12) provides that the fact that a maintenance calculation is in force in respect of a person with care, does not prevent the making of a new maintenance calculation with respect to that person as a result of the Department acting under paragraph (3).

Clause 4: default and interim maintenance decisions

There will be circumstances in which a final maintenance calculation cannot be made immediately, for example, where sufficient details are not made available, or need to be verified. The new scheme will allow maintenance to be calculated:

where the information needed to complete a maintenance calculation is not immediately available, using a default rate; and
where the calculation cannot be completed because an application for a variation is outstanding, using an interim rate.

This will allow maintenance arrangements to be put into place where there is no information about the non-resident parent's weekly earnings. It is intended that these will be set at 15 per cent., 20 per cent. or 25 per cent. of average non-resident parent's weekly earnings.
Clause 4 substitutes Article 14 of the Child Support Order.
Article 14 (default and interim maintenance decisions) provides for decisions to set liability at a default or interim rate.
Article 14(1) provides for a default maintenance decision, which will establish a maintenance liability calculated in accordance with regulations made under paragraphs (4) and (5). Such a decision may be made where there is insufficient information (apart from information needed in relation to a variation application) to decide maintenance liability.
Article 14(2) provides for interim maintenance decisions in cases an application for a variation has been made which has not yet been determined.
Article 14(3) provides that the amount of child support maintenance payable by virtue of an interim maintenance decision will be determined in accordance with Part I of Schedule 1.
Article 14(4) and (5) provides for regulations to define the way in which default and interim maintenance decisions are made. It is intended that regulations will provide that the default rates will be £30 for one qualifying child, £40 for two such children and £50 for three or more such children.

Applications for a variation

Clause 5: departure from usual rates for calculating maintenance

The new child support rates set out in Part I of Schedule 1 to the Child Support Order are intended to provide a fair maintenance calculation in the majority of cases. It is recognised, however, that there will be exceptional cases where the child support rates do not properly reflect a non-resident parent's ability to support his children. It has been decided therefore to allow for the variation, both upwards and downwards, of the normal rates in exceptional circumstances.
Clause 5 sets out the general rules for applications for variation before a final maintenance calculation has been made, and how the application is to be considered and decided.
Subsection (2) substitutes Articles 28A, 28B and 28C of the Child Support Order.
Article 28A (application for variation of usual rules for calculating maintenance) provides the rules governing applications for a variation. It specifies who can apply, and in what circumstances and the manner in which an application can be made.
Article 28A(1) to (3) provides that the person with care and the non-resident parent can each make an application for a variation at any time, once an application for a maintenance calculation has been made, and before a maintenance calculation decision under Article 13 or 14(1) has been made. It is not necessary to await the outcome of a maintenance application before applying for a variation.
Article 28A(4) and (5) provides that an application for a variation need not be in writing unless, in exceptional circumstances, the Department considers this to be appropriate. The applicant will be required to state the grounds on which he is applying for a variation and the Department may impose additional conditions. If the Department considers it appropriate, it may, for example, require a specific application form to be properly completed before it will accept that an application has been made.
Article 28A(6) refers to Schedule 4A, which contains additional regulation-making powers relating to variation applications.
Article 28B (preliminary consideration of applications) applies where an application for a variation has been made to the Department.
Article 28B(1) provides for a preliminary consideration of the application. The purpose of this is to sift out applications which have no prospect of success.
Article 28B(2) provides that an application from any source will be rejected where it has not been made on one or more of the recognised grounds, or where a default maintenance decision under Article 14(1) could be made. Schedule 4B lists the criteria which the Department will consider under the preliminary sift; this list may be supplemented by regulations. It is intended to sift out applications where the non-resident parent could not benefit from the effect of a variation.
Article 28C (imposition of regular payments condition) requires a non-resident parent who has made an application for a variation to continue paying maintenance regularly while the application for a variation is under consideration. This is to ensure that children receive maintenance regularly and reliably and that unnecessary debts are not built up during the variation process.
Article 28C(1) provides that, where the Department has made an interim decision, pending the determination of a non-resident parent's variation application, which has not been rejected at the preliminary consideration stage, it may require that parent to make regular ongoing payments of maintenance as a pre-condition of having the application considered. This is called a "regular payments" condition.
Article 28C(2) provides that the rate may either be at the rate of the existing interim decision or at a lesser rate, which might anticipate a successful variation application.
Article 28C(3) provides for the Department to notify all the persons with care concerned and the non-resident parent of the imposition of the condition and the consequences of failure to comply with it.
Article 28C(4) provides for the regular payments condition to cease to have effect either when the Department replaces the interim maintenance decision with a decision under Article 13 (whether or not it agrees to a variation) or when the variation application is withdrawn.
Article 28C(5) to (7) provides that, if the Department determines that the non-resident parent has failed to comply with the regular payments condition, it may refuse to consider the variation application and proceed to replace the interim maintenance decision on the basis that the variation application has failed. Regulations will specify what constitutes a "regular payment". It will be necessary to be able to take account of circumstances where the regular payment is unavoidably late, such as where a bank fails to operate a direct debit. It is intended that where the Department is not satisfied that the regular payment condition has been met, the variation application may be suspended to allow the non-resident parent further opportunity to comply. If, within a further calendar month the non-resident parent has still failed to comply, the application will fail. In this case the Department will not vary the maintenance calculation and will notify all persons with care and the non-resident parent accordingly. A non-resident parent who again wishes to have special circumstances considered will have to make a fresh application.
Subsections (3) and (4) amend Articles 28D and 28E of the Child Support Order, by substituting references to departure directions with references to variations.
Subsection (5) substitutes Article 28F of the Child Support Order.
Article 28F (agreement to a variation) sets out the conditions for agreement by the Department to a variation.
Article 28F(1) provides that a variation may be allowed, only if it has been made on one or more of the recognised grounds, and if, having regard to all the circumstances, it would be just and equitable to allow a variation in any particular case.
Article 28F(2) provides that, in determining whether it would be just and equitable to vary the normal rules in any case, the Department must have regard to the welfare of any child who would be affected by the variation, and to any other factors set out in regulations. The Department will need to consider, for example, whether any variation in the amount of child support liability would be likely to result in either parent giving up work.
Article 28F(3) allows the Department to reject an application where it has insufficient information to enable it to make a decision on maintenance liability under Article 13 and is forced to make a default decision under Article 14. Regulations will set out the other circumstances which will preclude the award of a variation. In particular, it is intended to disallow applications from any source where a non-resident parent has been in receipt of a prescribed income-related benefit, or was the partner of someone in receipt of such a benefit, for the whole of the period between the date from which any variation could take effect and the date of the determination of the maintenance calculation.
Article 28F(4) provides that where the Department agrees to a variation it must determine the basis on which child support maintenance is to be calculated and make a decision under Article 13 on that basis.
Article 28F(5) provides that where the Department has made an interim maintenance decision and subsequently makes a decision under Article 13 (whether or not it agrees to a variation) the interim maintenance decision is to be treated as having been replaced under Article 13. Except where regulations prescribe otherwise, any appeal lodged against the interim decision will lapse and any outstanding action under Article 18 or 19 relating to the interim decision will be dealt with as part of the final decision. There will be a right of appeal against the final decision.
Article 28F(6) requires the Department, in considering whether to agree to a variation, to comply with any regulations made under Part II of Schedule 4B.

Clause 6: applications for a variation: further provisions

Clause 6 gives effect to Schedule 2, which substitutes Schedules 4A and 4B to the Child Support Order.
Schedule 4A (applications for a variation) contains detailed provisions supplementing the rules governing applications for variations in Article 28A. In particular, it provides for:

regulations to specify the procedure to be followed by the Department or a tribunal in considering an application;
information to be supplied within a specified period to enable an application for a variation to be determined;
two or more variation applications to be considered together;
a tribunal to be able to consider any variation application which has been referred to it for determination under Article 28D(1)(b) at the same time as any appeal under Article 22 connected to an interim maintenance decision.

Schedule 4B (applications for a variation: the cases and controls) makes further provisions in relation to variations.

Paragraph 1: general

Paragraph 1 provides that the cases in which a variation may be agreed are those set out in Part I or in regulations under that Part.

Paragraph 2: special expenses

Paragraph 2 relates to the special expenses in respect of which a non-resident parent may apply for a variation of the normal rules by which maintenance liability is calculated.

Sub-paragraph (2) provides that the Department may have regard either to all or part of the expenses, or, in prescribed cases, only to the element of expenses which exceeds a threshold set out in regulations.
Sub-paragraph (3) specifies some cases. The list is not intended to be exhaustive. The non-resident parent will be able to seek a variation in recognition of costs incurred in keeping in contact with a qualifying child, costs attributable to the long-term illness or disability of a relevant other child, costs incurred in honouring debts incurred when both parents were living together, which were for the benefit of both parents or the child for whom an application for a maintenance calculation has been made or for the benefit of any other child in a prescribed category, the costs incurred in meeting boarding school fees, and payments of the mortgage on the former home where the former partner lives in that home with a qualifying child and the non-resident parent no longer has an interest in that property.
Sub-paragraph (4) provides for the meaning of "illness", "disability" and "long-term" to be set out in regulations.
Sub-paragraph (5) provides for the meaning of "boarding school fees" and the elements of the fees that the Department will recognise also to be set out in regulations. The regulations will allow the Department to estimate the fees where the actual amounts are not readily available.

Paragraph 3: property or capital transfers

Paragraph 3 deals with property or capital transfers.

Sub-paragraph (1) requires there to have been a property settlement between the parties in pursuance of a court order or maintenance agreement, which pre-dates 5 April 1993. A variation may be made in respect of, for example, the equivalent weekly value of that transfer.
Sub-paragraph (2) provides that the Department will continue to take no account of transfers valued at less than a minimum figure. This figure, as now, will be prescribed by regulations and is intended to remain £5,000.

Paragraph 4: additional cases

Paragraph 4 provides for regulations to specify further grounds on which any person with care may apply for a variation of the rules on the calculation of liability.
Sub-paragraph (2) gives examples of such cases. The list is not intended to be exhaustive. The person with care will be able to seek a variation in recognition of one or more of the following grounds:

where the non-resident parent has assets which exceed a prescribed value (it is intended to prescribe cash or its equivalent, or property other than the normal place of residence);
where the non-resident parent enjoys a lifestyle which is inconsistent with the income to which the Department is able to have regard in the determination of the rate of liability;
where the non-resident parent is in receipt of income to which the Department would not otherwise have had regard (it is intended to cover cases where the non-resident parent has a flat rate liability because he is in receipt of a prescribed social security benefit or war pension, or where he has a nil rate of liability, and to prescribe a minimum additional income threshold of £100 per week); or
where the non-resident parent has unreasonably reduced the income to which the Department has had regard in the calculation of maintenance liability.

Paragraphs 5 and 6: regulatory controls

Paragraph 5 contains additional regulation-making powers in relation to variations:

Sub-paragraphs (1) and (3) enable regulations to set out the manner in which the Department may vary the normal rules for calculating maintenance in the event of a successful variation application. The Department will normally give effect to a variation by offsetting the expenses against, or increasing the value of, the non-resident parent's net income prior to any further adjustment in respect of relevant children (where appropriate). The only exception to the rules will apply to pre-1993 property transfers, where the equivalent weekly value of the transfer will be deducted from the non-resident parent's "bottom line" liability.
Sub-paragraph (2) provides that no variation may be made other than in the circumstances set out in regulations.
Sub-paragraphs (4) and (5) allow the Department to make regulations imposing a limit on the amount of special expenses which it may take into account for the purposes of a variation, and making different provision in relation to different levels of income. The intention is that the Department will recognise expenditure on certain of the prescribed grounds only in so far as it exceeds £10 or £15 a week, depending on the non-resident parent's net weekly income.

Paragraph 6 allows the Department, by regulations, to apply (with prescribed modifications) the "shared care" rules and adjustments referred to in paragraph 7 of Schedule 1 in cases where it has agreed to a variation of the normal rules for calculating maintenance liability.

Clause 7: variations: revision and supersession

Clause 7 substitutes Article 28G of the Child Support Order.
Article 28G (variations: revision and supersession) makes further provisions in relation to variations.
Article 28G(1) enables variation applications to be made when a maintenance calculation is in force.
Article 28G(2) provides for regulations to modify Articles 18, 19, 22 and 28A to 28F of, and Schedules 4A and 4B to, the Child Support Order for these variation applications.
Article 28G(3) provides for regulations to permit the Department, when superseding a decision under Article 19 on its own initiative, to make a decision on the basis of a variation agreed to in respect of an earlier decision being superseded. This is because some variation circumstances, such as property transfers, once accepted, will continue to be relevant to liability except in flat rate or nil rate cases.

Revision and supersession of decisions

Clause 8: revision of decisions

Clause 8 amends Article 18 of the Child Support Order (revision of decisions) by inserting paragraphs (1A) and (1B).
Paragraph (1A) covers cases of decisions to reduce benefit and decisions of appeal tribunals on variations. An appeal tribunal can determine an application for a variation if asked to do so by the Department.
Paragraph (1B) provides that on revision an Article 14(1) decision may be treated as if made under Article 13.

Clause 9: decisions superseding earlier decisions

Clause 9 amends Article 19 of the Child Support Order by clarifying which decisions may be superseded.
Subsections (1) and (2) amend Article 19(1) to provide for the supersession of:

a reduced benefit decision;
a decision of an appeal tribunal on a variation referral; and
a decision of a Child Support Commissioner on an appeal from a decision of an appeal tribunal, including a decision on referral of a variation.

Subsection (3) substitutes paragraphs (4) and (4A) for paragraph (4) of Article 19. These paragraphs provide that a supersession is to take effect from the beginning of a "maintenance period" (the weekly unit in which maintenance liability is calculated). The first maintenance period starts on the date that the non-resident parent's liability begins; each successive period starts on the day after the last day of the previous period. Other periods may be prescribed for particular cases.

Appeals

Clause 10: appeals to appeal tribunals

Clause 10 substitutes Article 22 of the Child Support Order.
Article 22 (appeals to appeal tribunals) sets out who may appeal and the decisions against which they may appeal. An appeal may be brought by any qualifying person.
Article 22(1) provides that the decisions against which an appeal lies are:

a decision to make a maintenance calculation (Article 13), a default or interim maintenance decision (Article 14) and a superseding decision (Article 19);
a decision not to make a maintenance calculation or supersede a decision; (the Department has no jurisdiction to make a maintenance calculation in certain circumstances, such as where a child lives abroad, and decisions which cannot be superseded include certain changes of circumstances, such as housing costs, which will not be taken into account in the maintenance calculation.)
a reduced benefit decision;
the imposition of a penalty for late payment of maintenance and the amount of that penalty; and
the requirement to pay fees.

Article 22(2) defines "qualifying person" for the purposes of paragraph (1) as:

the person with care or the non-resident parent;
the person with care affected by a decision to reduce benefit;
the parent required to make penalty payments; or
the person required to pay fees.

Article 22(3) provides that anyone with a right of appeal against a decision or the imposition of a requirement must be told of this right.
Article 22(4) and (5) provide for regulations to specify the manner in which, and the time within which, an appeal must be brought. It is intended that there will be a one month time limit for bringing an appeal and that this limit can be extended at the discretion of the tribunal if there is good cause for failing to appeal sooner.
Article 22(6) provides that the time limit for appealing against a decision to reduce benefit starts on the date on which the reduction in benefit is notified.
Article 22(7) provides that the tribunal cannot consider changes in circumstances which happened after the date of the decision and need not look at any issue not raised when the decision was made. This is the same as for social security appeals.
Article 22(8) sets out the way an appeal tribunal can decide an appeal if it is allowed. The tribunal can either:

decide the appeal itself; or
send the case back to the CSA with directions as to how a new decision must be made. This option is necessary because a tribunal may not have access to all the information or computer support necessary to make a new maintenance calculation.

Clause 11: redetermination of appeals

The 1998 Order replaced the various appeal structures, including that for child support appeals, although the legislation governing child support appeals remains in the Child Support Order.
The legislation dealing with social security appeals, which is found in the 1998 Order, includes provision allowing a tribunal to redetermine an appeal when an appeal to a Social Security Commissioner has been made against a decision of an appeal tribunal. Article 14 of that Order allows a tribunal to set aside a decision if all the parties to the appeal agree that the decision is wrong in law. The appeal is then reconsidered by a tribunal. This means that Commissioners do not have to deal with uncontested appeals.
Clause 11 inserts Article 24A (which mirrors Article 14 of the 1998 Order) into the Child Support Order.
Article 24A (redetermination of appeals) provides for the setting aside of appeal tribunal decisions and reconsideration of the appeal by a tribunal. It sets out the circumstances where this can happen and the procedures to be followed.
Article 24A(1) provides that Article 24A applies when there is an application for leave to appeal to a Child Support Commissioner from a decision of a tribunal on a point of law.
Article 24A(2) allows the person who constituted, or was the chairman of an appeal tribunal to set aside the tribunal decision if he decides that it was wrong on a point of law. He can then refer the case for redetermination, either by the same tribunal or a different one.
Article 24A(3) provides that a tribunal decision shall be set aside if each of the principal parties accepts that it was wrong in law. Such a case must be referred for determination by a different tribunal.
Article 24A(4) defines the "principal parties" to an appeal. They are the Department and the qualifying persons referred to in Article 22(2). They are the person with care and the non-resident parent. Also, in the case of an appeal relating to financial penalties or fees, they include the person liable to make payment and in the case of a reduced benefit direction they include the person in respect of whom the benefit is payable.

Information

Clause 12: information required by the Department

Clause 12 amends Article 16(1) of the Child Support Order to allow the Department to require any information which it may need to make any decision or impose any condition or requirement under the Child Support Order.

Clause 13: information - offences

Clause 13 inserts Article 16A into the Child Support Order.
Article 16A (information - offences) provides for a fine of up to £1,000 for anyone who provides false information or refuses to supply information.
Article 16A(1) provides that Article 16A applies to:

those who are required to provide information necessary to trace and, in the case of a maintenance application made under Article 7, identify the non-resident parent, and to assess and collect the maintenance liability (paragraph (1)(a)); and
persons specified in regulations (paragraph (1)(b)). It is intended to specify, for example, employers and accountants of non-resident parents.

Article 16A(2) introduces an offence of knowingly making a false statement or representation or knowingly providing, or allowing to be provided, information which is false.
Article 16A(3) introduces an offence of failure to provide information when required by the Department to do so.
Article 16A(4) provides that if a person has a reasonable excuse for failing to comply with the Department's request the offence will not apply to him.
Article 16A(5) provides that if a person is found guilty of either new offence he will be liable on conviction to a fine of up to £1,000.

Clause 14: inspectors

Clause 14 amends Article 17 of the Child Support Order to provide that the appointment of an inspector is not limited to an individual case. It also brings inspectors' powers into line with the general powers of inspectors, dealt with in Part III of this Bill.
Subsection (2) substitutes paragraphs (1) to (4A) for paragraphs (1) to (4) of Article 17.
Article 17(1) to (3) allows the Department to appoint inspectors and to set the terms of appointment. Although normally these inspectors will work on child support cases, there will be occasions when they will carry out other specific tasks. It is also intended that they will work with the SSA.
Article 17(4) enables an inspector to enter at any reasonable time, either alone or accompanied, the premises set out in paragraph (4A) as being liable to inspection. In such premises an inspector will have the power to examine and inquire as he thinks fit.
Article 17(4A) defines the premises liable to inspection for the purposes of paragraph (4). These are any premises other than places used only as a person's home in which:

a non-resident parent is working or has been working (as an employee or on a self-employed basis); or
another person holds information in a professional capacity about a non-resident parent.

Subsection (3) amends Article 17(6) to allow inspectors to obtain from the persons mentioned in paragraph (5) (any person aged 18 or over whom the inspector finds on the premises) any information and documents which the inspector reasonably requires.
Subsection (4) adds paragraph (11) to Article 17, to provide that the premises include:

permanent and moveable structures, and, if appropriate, vehicles, boats, etc.;
offshore installations such as oil-rigs; and
all other premises occupied on a permanent or temporary basis.

Parentage

Clause 15: presumption of parentage in child support cases.

Most fathers who are non-resident parents acknowledge their children and accept their responsibility to them. In these circumstances, child support liability can be worked out without any further investigation as to paternity. However, occasionally a man may have good reason to doubt the person with care's statement that he is the father of the child in question. Also, in some cases, men have contested paternity in order to slow down the process of collecting child maintenance.
To allow child support liability to be worked out without unnecessary delay, the Department can, in specific circumstances, assume that a man is the father of a child even if he denies it. In such cases child support liability can only be stopped if the non-resident parent proves in court that he is not the child's father.
Clause 15 makes it clear that the presumption of paternity arising from marriage, already recognised by the courts, can be applied for child support purposes.
Clause 15 amends Article 27(2) of the Child Support Order to add four new cases in which child support liability can be worked out on the basis that a person who denies that he or she is a parent is in fact the parent of the qualifying child.

Case A1 allows the Department to presume that a man is the father of a child living in Northern Ireland if the man was married to the child's mother at any time between the date of conception and the child's birth.
Case A2 provides a presumption that a man who is named on the child's birth certificate is the child's father, even if he was not married to the child's mother.
Case A3 enables the Department to presume parentage if either the alleged parent has refused to take a DNA test or the result of the DNA test shows that he is a parent of the child but he refuses to accept it.
Case B1 provides that the alleged parent may be presumed to be the parent of the child where section 27 or 28 of the Human Fertilisation and Embryology Act 1990 applies. Sections 27 and 28 deal with children born as a result of fertility treatment or artificial insemination. Section 27 provides that a woman who gives birth as a result of such treatment is treated as the child's mother unless the child is adopted. Section 28 provides that a man who is married to a woman who has received such treatment (or a man who is himself taking part in the treatment) will normally be the father of the child in law. This provision does not apply if the man did not consent to the treatment, or where the child is adopted.

Disqualification from driving

Clause 16: disqualification from driving

Clause 16 provides for a disqualification order to be made in relation to holding or obtaining a driving licence as an alternative to committal.
Subsection (1) inserts Article 36A into the Child Support Order.
Article 36A (commitment to prison and disqualification from driving) applies where an amount of child support maintenance is outstanding.
Article 36A(1) provides that Article 36A applies where the Department has tried to obtain the amount outstanding by virtue of Article 35.
Article 36A(2) provides for the court to consider either committal or disqualification from driving.
Article 36A(3) provides for the court to consider:

whether a driving licence is needed by the liable person to earn a living;
the financial circumstances of the liable person; and
whether there has been wilful refusal or culpable neglect.

Article 36A(4) allows the Department to make representations to the court as to which penalty should be imposed and the liable person to reply to those representations.
Article 36A(5) defines "driving licence".
Subsection (2) provides for Article 37(1) and (2) of the Child Support Order to cease to have effect.
Subsection (3) inserts Article 37A into the Child Support Order.
Article 37A (disqualification from driving: further provision) applies where a court is satisfied that there has been wilful refusal or culpable neglect on the part of the liable person.
Article 37A(1) allows the court to disqualify the liable person from driving if it is of the opinion that he has wilfully refused to pay or been guilty of culpable neglect in connection with the payment of maintenance.

Sub-paragraph (a) provides for the disqualification order to apply for a period not exceeding two years.
Sub-paragraph (b) provides that the disqualification order may be suspended on conditions which the court thinks just.

Article 37A(2) prohibits the court from making both a disqualification order and a warrant for committal.
Article 37A(3) provides that a disqualification order shall state the aggregate of the amount of the arrears and the court costs.
Article 37A(4) provides for the courts to require the liable person to produce his driving licence.
Article 37A(5) provides that the court may revoke the order or substitute a shorter disqualification period if part of the amount outstanding is paid, and must revoke the disqualification order if payment is made in full before the end of the disqualification period.
Article 37A(6) allows the Department to express its views to the court on the amount which should be paid before a disqualification order is revoked and for the liable person to respond.
Article 37A(7) allows the Department to make a further application to the court if any amount remains outstanding at the end of the disqualification period.
Article 37A(8) provides that where the court makes a disqualification order, substitutes a shorter period of disqualification or revokes a disqualification order it must notify the Department.
Article 37A(9) requires the court to send the driving licence, when it is produced, to the Department.
Article 37A(10) provides for Article 110 of the Magistrates' Courts (Northern Ireland) Order 1981 (application of money found on defaulter) to apply to a disqualification order.
Article 37A(11) provides for regulations, corresponding to provision made under Article 37(11), to be made in relation to disqualification orders.
Subsection (4) amends Article 180(3B) of the Road Traffic (Northern Ireland) Order 1981 to include a reference to Article 37A of the Child Support Order.
Subsection (5) amends Article 29(2) of the Road Traffic Offenders (Northern Ireland) Order 1996 to include a reference to Article 37A of the Child Support Order.

Financial penalties

Clause 17: financial penalties

Clause 17 provides for the introduction of a simplified system of financial penalties to apply to non-resident parents who are in arrears with payments of child support maintenance.
Subsection (1) provides for Article 38(3) to (5) of the Child Support Order to cease to have effect.
Subsection (2) substitutes Article 38A of the Child Support Order.
Article 38A (penalty payments) applies to a non-resident parent who is late paying child support maintenance.
Article 38A(1) enables the Department to make regulations requiring a non-resident parent, who is late paying child support maintenance, to make a penalty payment, and setting out the way in which penalties are calculated.
Article 38A(2) makes the amount of a penalty payment discretionary, subject to an overall limit of 25 per cent. of the amount due for that week.
Article 38A(3) provides that the amount of the child support maintenance arrears remains due when a financial penalty has been imposed. The financial penalty is not maintenance and is not passed on to the parent with care.
Article 38A(4) provides for regulations to:

specify when a financial penalty becomes payable.
allow the Department to waive all or part of the penalty payment.

Article 38A(5) allows regulations on collection and enforcement to apply to penalty payments in the same way as they do to child maintenance payments. Thus the Department will have exactly the same powers to collect and enforce penalty payments and may combine this action with action to collect and enforce child maintenance.
Article 38A(6) provides that any penalty payment collected shall be paid into the Consolidated Fund.

Clause 18: reduced benefit decisions

Clause 18 substitutes Article 43 of the Child Support Order.
Article 43 (reduced benefit decisions) applies where a parent with care asks the Department not to pursue child support maintenance, fails to provide information or refuses to take a scientific test, such as a DNA test.
Article 43(2) enables the Department to require the parent with care, within a specified period, to provide reasons for making the request, failing to provide information or refusing to take the test.
Article 43(3) provides that when the specified period has expired the Department must consider, having regard to the information provided by the parent with care, whether there are reasonable grounds for believing that that parent or any child living with that parent would be at risk of harm or undue distress as a consequence of:

the Department recovering child support maintenance from the non-resident parent;
insisting on the provision of information; or
that parent agreeing to a scientific test.

Article 43(4) provides that, where the Department considers that there are reasonable grounds for believing that the parent with care or a child would be at risk of harm or undue distress, it shall take no further action under this Article, and shall notify the parent with care to that effect.
Article 43(5) to (10) reproduces provisions of the original Article 43, but with updated terminology. Under Article 43(6) the Department may from time to time require the parent with care to state whether the request under Article 9(5) still stands, and if so to give the reasons for maintaining that request.

Miscellaneous

Clause 19: voluntary payments

Subsection (1) inserts Article 28J into the Child Support Order.
Article 28J (voluntary payments) deals with payments made by a non-resident parent prior to the making of a maintenance calculation by the Department.
Article 28J(1) provides for Article 28J to apply where a person has made an application for a maintenance calculation, or is treated as having made such an application under Article 9, the application has not yet been determined and the non-resident parent makes a voluntary payment.
Article 28J(2) defines "voluntary payment" as a payment:

on account of child maintenance which the non-resident parent expects to pay, which may be based on an estimate supplied to him by the Department; and
which is made before the actual calculation has been notified, or the application for maintenance determined.

Article 28J(3) provides that, in prescribed circumstances, the voluntary payment may be set off against arrears of child support maintenance in respect of a period before that date on which the maintenance calculation was notified to the non-resident parent, and for the amount payable under a maintenance calculation to be adjusted to take account of the voluntary payment.
Article 28J(4) provides for payments to be made to the Department unless it agrees that they should be made, in accordance with conditions, which it will specify, to the parent with care or to or through another person.
Article 28J(5) provides for the making of regulations about voluntary payments, including the type of payment which can count as such a payment.

Sub-paragraph (a) allows regulations to specify which payments are, and which are not, to be treated as voluntary payments. This will apply to all payments, whether they are paid to the parent with care or any other party. It is intended that as well as cash payments any payment which is made for food, shelter and warmth will normally be taken into account.
Sub-paragraph (b) allows regulations to set out the extent and the circumstances in which these payments can be taken into account.

Subsections (2) to (4) make consequential amendments to Article 38B of the Child Support Order (repayment of overpaid child support maintenance).
Subsection (3) inserts paragraph (1A) into Article 38B. This allows the provisions of the Article to apply where a voluntary payment has been made, and

it subsequently turns out that there is no maintenance liability; or
the non-resident parent has paid more, in voluntary payments than the total of the arrears.

Subsection (4) substitutes paragraph (7) of Article 38B. Paragraph (7) provides that a payment can be treated as an overpayment of child support maintenance where:

a payment was made but the maintenance calculation turns out not to be valid, for example where a person who believes himself to be the non-resident parent turns out not to be, or where the Department does not have jurisdiction over a case; and
a voluntary payment has been made but there is no liability to pay child support maintenance.

Clause 20: recovery of child support maintenance by deduction from benefit

Clause 20 substitutes Article 40 of the Child Support Order.
Article 40 (recovery of child support maintenance by deduction from benefit) applies to a non-resident parent who is liable to pay a flat rate of child support maintenance and who is in receipt of certain benefits.
Article 40(1) provides for Article 40 to apply where the non-resident parent is liable to pay a flat rate of child support maintenance.
Article 40(2) allows maintenance payments or arrears to be deducted from a range of benefits, to be specified in regulations made under section 5(1)(q) of the Administration Act.
Article 40(3) provides that for the purposes of these deductions, the list of benefits shall include war disablement pensions and war widows' pensions.

Clause 21: jurisdiction

Clause 21 amends Article 41 of the Child Support Order to extend child support jurisdiction to non-resident parents who are not habitually resident in the United Kingdom, but who are employed by a United Kingdom-based employer. This will mean that certain non-resident parents who are employed abroad will be required to pay child support maintenance for their children who live in the United Kingdom.
Subsection (2) inserts in paragraph (1) a reference to paragraph (2A).
Subsection (3) inserts paragraph (2A), which lists the cases where, even though the non-resident parent is living abroad, the Department will have jurisdiction to calculate and collect maintenance. These cases include people employed abroad:

in the civil service;
in the armed forces;
by a United Kingdom-based company, the description of which will be prescribed in regulations; or
by a body prescribed in regulations. The regulations are intended to be used to cover employment comparable to those listed, which are subsequently identified.

Subsection (4) provides for Article 41(3) to cease to have effect.

Clause 22: abolition of the child maintenance bonus

It is intended to replace the child maintenance bonus by a child maintenance premium, which will allow all families on IS or income-based JSA to keep up to £10 a week of any maintenance paid. Accordingly clause 22 provides for Article 4 of the Child Support (Northern Ireland) Order 1995 (the 1995 Order) to cease to have effect.

Clause 23: periodical reviews

Under the decision-making and appeals processes for child support, which came into effect in June 1999, transitional arrangements ensured that outstanding periodical reviews could still be completed.
There are still a number of reviews outstanding. There is, however, little indication that parents want past periodical reviews carried out although they will be carried out at the request of either parent. The effect of reviews is difficult to predict, some will increase liability, thus creating substantial debts for the non-resident parent, while others reduce liability, creating overpayments to be recovered from the person with care.
Clause 23, which will come into operation when the Bill receives Royal Assent, provides for the saving of Article 18 of the Child Support Order as it was prior to its substitution by the 1998 Order, to cease to have effect.

Clause 24: regulations

Clause 24 amends Article 48 of the Child Support Order (regulations and orders), which provides for Parliamentary control of regulations made by the Lord Chancellor and Assembly control of regulations and orders made by the Department.
Subsection (1) substitutes paragraphs (2) and (2A) for paragraph (2). Paragraph (2) contains the list of regulations subject to the confirmatory procedure and paragraph (2A) applies that procedure to the first regulations to be made under paragraph 10 of Part I of Schedule 1.
Subsection (2) inserts a reference to paragraph (2A) into Article 48(3)(a).

Clause 25: amendments

Clause 25 gives effect to Schedule 3, which contains minor and consequential amendments to the Child Support Order, the 1995 Order and a number of other statutory provisions.

Paragraph 1: amendment of the Army Act 1955

Paragraph 1 amends section 150AA of the Army Act 1955 by substituting "maintenance calculation" for "maintenance assessment".

Paragraph 2: amendment of the Air Force Act 1955

Paragraph 2 amends section 150AA of the Air Force Act 1955 by substituting "maintenance calculation" for "maintenance assessment".

Paragraphs 3 to 5: amendment of the Matrimonial Causes (Northern Ireland) Order 1978

Paragraphs 3 to 5 amend the Matrimonial Causes (Northern Ireland) Order 1978 by substituting "maintenance calculation" for "maintenance assessment".

Paragraphs 6 to 8: amendment of the Domestic Proceedings (Northern Ireland) Order 1980

Paragraphs 6 to 8 amend the Domestic Proceedings (Northern Ireland) Order 1980 by substituting "maintenance calculation" for "maintenance assessment".

Paragraph 9: amendment of the Finance Act 1988

Paragraph 9 amends the Finance Act 1988 by substituting "maintenance calculation" for "maintenance assessment".

Paragraph 10: amendment of the Insolvency (Northern Ireland) Order 1989

Paragraph 10 amends the Insolvency (Northern Ireland) Order 1989 by substituting "maintenance calculation" for "maintenance assessment".

Paragraphs 11 to 28: amendment of the Child Support Order

Paragraphs 11 to 28 amend the Child Support Order.
Paragraph 11 substitutes for references to "absent parent" and "absent parent's" throughout the Order references to "non-resident parent" and "non-resident parent's".
Paragraph 12 amends Article 2(2):

sub-paragraph (a) amends the definition of "application for a departure direction";
sub-paragraph (b) provides for the definitions of "assessable income", "current assessment", "departure direction" and "maintenance requirement" to cease to have effect;
sub-paragraph (c) inserts a definition of "default maintenance decision";
sub-paragraph (d) amends the definition of "interim maintenance assessment";
sub-paragraph (e) substitutes a definition of "maintenance calculation" for the definition of "maintenance assessment" and
sub-paragraph (f) adds a definition of "voluntary payment".

Paragraph 13 amends Article 7(4) and (9).
Paragraph 14 amends paragraphs (1), (3) and (6) of Article 10 and substitutes paragraph (3A) of that Article.
Paragraph 15 substitutes sub-paragraphs (a) and (b) of Article 11(6).
Paragraph 16 amends Article 16(1).
Paragraph 17 expands Article 27.
Paragraph 18 expands Article 27A.
Paragraph 19 amends paragraph (1)(a) and (b) of Article 28ZA.
Paragraph 20 substitutes paragraph (1)(a) of Article 28ZB and amends paragraph (4) of that Article.
Paragraph 21 amends paragraphs (1)(b)(i), (ii) and (iii), (3) and (6) of Article 28ZC.
Paragraph 22 provides for Articles 28H and 28I to cease to have effect.
Paragraph 23 substitutes paragraph (2) of Article 30.
Paragraph 24 inserts sub-paragraph (bb) into Article 32(2).
Paragraph 25 adds paragraph (5) to Article 33.
Paragraph 26 adds paragraph (3) to Article 44.
Paragraph 27 substitutes sub-paragraphs (a)(ii) and (iii) and (b) of Article 47(2).
Paragraph 28 provides for paragraph 13 and paragraph 16(1)(d) and (e) and (2) to (10) of Schedule 1 to cease to have effect, and adds sub-paragraph (2) to paragraph 14 of that Schedule.

Paragraph 29: amendment of the Administration Act

Paragraph 29 amends section 5A of the Administration Act.

Paragraph 30: amendment of the Children (Northern Ireland) Order 1995

Paragraph 30 amends Schedule 1 to the Children (Northern Ireland) Order 1995 by substituting for references to "maintenance assessment", "assessment", "interim maintenance assessment" and "current assessment" references to "maintenance calculation", "calculation", "default or interim maintenance decision" and "current calculation".

Paragraphs 31 and 32: amendment of the 1995 Order

Paragraphs 31 and 32 amend the 1995 Order by providing that Articles 12(4) and 17 shall cease to have effect.

Paragraph 33: amendment of the 1998 Order

Paragraph 33 amends paragraph 8 of Schedule 2 to the 1998 Order by substituting for references to "direction" references to "decision".

Clause 26: temporary compensation payment scheme

Clause 26 provides the statutory basis for a scheme under which in certain circumstances an absent parent will not be required to pay the whole of the arrears of maintenance. The circumstances will include significant delay by the Department under the current scheme, but only where the absent parent gives a commitment to meet his ongoing liabilities and pay the arrears of child support maintenance specified in his agreement, and meets the commitment.
Subsection (1) provides that the section applies where the effective date of a maintenance assessment following an application or a review under the current system, before 1 June 1999, means that arrears of child support maintenance have become due.
Subsection (2) allows regulations to modify the section to enable it to apply to additional cases of arrears of child support maintenance and not to apply to cases referred to in subsection (1).
Subsection (3) allows the Department to make an agreement with the absent parent requiring him to pay a lesser amount of arrears, and for the Department not to take action to recover any of the arrears while he complies with the terms of that agreement.
Subsection (4) allows regulations to prescribe the terms of the agreement under subsection (3).
Subsection (5) provides that an agreement may only be entered into if made before 1 April 2002 and expires before 1 April 2003.
Subsection (6) provides that while a parent complies with an agreement, the Department may refrain from taking action to recover arrears of maintenance.
Subsection (7) provides that if the absent parent has complied with the terms of the agreement, when it expires the Department may make payments to the person with care and the absent parent will cease to be liable for the full amount of the arrears.
Subsection (8) provides for the absent parent to become liable for the full arrears if he defaults under the agreement.
Subsection (9) allows the Department to make regulations substituting later dates for the dates in subsection (5).
Subsection (10) defines "prescribed".
Subsection (11) provides for the confirmatory procedure to apply to regulations made under subsection (9) and for all other regulations made under the section to be subject to negative resolution.

Clause 27: pilot schemes

Clause 27 allows pilot schemes to be set up for specific child support provisions. This will allow the Department to test discrete elements of the new scheme prior to introducing them throughout Northern Ireland, or to test operational procedures for limited periods of time and in limited areas, to establish the best way to deliver aspects of the new scheme.
There are at present no plans to pilot any of the provisions, but it is considered prudent to provide the option to pilot changes, should this appear advisable.
Subsection (1) provides that regulations made under provisions inserted or substituted in the Child Support Order by Part I of, or Schedules 1 to 3 to, this Bill may be made so that they have effect for a specified period, not exceeding 12 months.
Subsection (2) provides that regulations made by virtue of subsection (1) are to be referred to as a "pilot scheme".
Subsection (3) allows for pilot schemes to have effect in one or more specified areas, to apply to one or more specified classes of person or to people selected by prescribed criteria or on a sampling basis.
Subsection (4) provides for a pilot scheme to be able to make consequential or transitional provision for the way in which the pilot scheme will be wound up.
Subsection (5) provides that a pilot scheme may be replaced by a further pilot scheme making the same or similar provisions.
Subsection (6) provides that any regulations providing for a pilot scheme will be subject to the confirmatory procedure.

Clause 28: transitional provisions, savings, etc.

Initially the new scheme will deal with new applications. Existing cases will be transferred at a later date when the scheme has bedded in and the new rates will, where appropriate, be phased in over time. Transitional provisions will, therefore, facilitate the conversion of cases and the phasing of amounts payable.
Subsection (1) provides for regulations to ensure that the new scheme can be brought into operation as smoothly as possible. The regulations may cover the transition to the new scheme, saving of any current provisions so that they can be used in the new scheme, amending other legislation to take account of the new scheme and any other matter which may be required.
Subsection (2) provides examples of the matters which may be covered in regulations. Subsection (2)(a) allows for a transitional rate of liability to be payable, including the phasing in of the amount due when the new scheme comes into effect. Subsection (2)(b) allows departure directions and other findings in relation to a previous determination to be taken into account when determining the amount of maintenance payable.
Subsection (3) applies Article 74(3), (4) and (6) of the 1998 Order to the powers to make regulations under this section. This allows different provision to be made for different cases and for different purposes. It also provides power for discretion to be exercised when dealing with various matters.
Subsection (4) provides for regulations to be subject to negative resolution.

Part II: Pensions

State Second Pension

The State Second Pension will reform SERPS by boosting the AP of low earners and, for the first time, providing AP for carers and some long-term disabled people with broken work records.

Clause 29: earnings from which pension derived

Subsection (1) inserts subsection (2A) into section 22 of the Contributions and Benefits Act, which sets out the earnings on which additional pension (AP) in SERPS is calculated. Under State Second Pension, AP will be calculated on those earnings on which Class 1 employee NICs have been paid or treated as paid.
The self-employed do not accrue entitlement to AP. Their flat-rate Class 2 NICs entitle them to flat-rate contributory benefits, such as basic RP. However, someone may be both an employed earner and a self-employed earner in the course of a year. In such a case if he is a member of SERPS as an employed earner his Class 2 NICs are currently taken into account when calculating the amount of Class 1 NICs on which his entitlement to AP is based. But if he is contracted-out of SERPS into an occupational pension scheme or a personal pension scheme, he receives a rebate of NICs, which is based solely on Class 1 employee NICs. This subsection treats members of State Second Pension similarly to those contracted-out. Only Class 1 NICs will be taken into account when calculating the amount of State Second Pension entitlement.
Subsection (2)(a) inserts into section 44(6) of the Contributions and Benefits Act, paragraph (za), which sets out how earnings factors are to be determined for State Second Pension purposes. For State Second Pension the earnings factor will be the total of the earnings on which Class 1 employee NICs have been paid or treated as paid, unless the person concerned is treated as having an earnings factor for one of the reasons set out in section 44A of the Contributions and Benefits Act (inserted by subsection (3), see below).
Subsection (2)(b) amends section 44(6)(a) to limit the current method of determining earnings factors for AP under SERPS to the period before the "first appointed year", which is the year from which State Second Pension will take effect.
Subsection (3) inserts section 44A (deemed earnings factors) into the Contributions and Benefits Act.
Section 44A(1) provides for a person to be deemed to have an earnings factor equal to the low earnings threshold (LET) when calculating entitlement to AP under State Second Pension if he qualifies in any of the ways set out in subsection (2). In 1999-2000 terms the LET will be £9,500.
The ways in which a person qualifies, as set out in section 44A(2), are as follows:

if he had earnings at or above the level needed to make the year a qualifying one for basic RP (earnings at or above the annual lower earnings limit (LEL) of £3432 in 1999-2000, which is 52 times the LEL of £66 a week) but less than the LET (paragraph (a)).
if Invalid care Allowance (ICA) was paid to him throughout the year or he would have been entitled to be paid ICA but for the fact that he received another (higher) benefit, such as Incapacity Benefit (IB) (paragraph (b)).
if he was paid CB for a child under 6, or satisfied other conditions to be set out in regulations (paragraph (c)); (It is intended that these conditions will mirror those in regulation 2 of the Social Security Pensions (Home Responsibilities) Regulations (Northern Ireland) 1994, which provide for a person to be treated as precluded from regular employment by responsibilities at home if he receives IS because he is caring for a sick or disabled person (and therefore not required to be available for work) or he spends at least 35 hours a week caring for a person who receives Attendance Allowance (AA) or the care component of Disability Living Allowance (DLA) at the middle or highest rate.)
if long-term IB was paid to him throughout the tax year, or he would have been entitled to receive long-term IB but failed to satisfy the contribution conditions, or received another (higher) benefit, or he received an occupational or personal pension which reduced the amount of IB to nil (paragraph (d));

Section 44A(3) and (4) sets out the labour market attachment conditions for those who could qualify for State Second Pension on grounds of entitlement to long-term IB. Such a person must have paid, or be treated as having paid, Class 1 employee NICs for at least one tenth of his working life for state pension purposes since 1978, when AP was introduced. (A full working life for state pension purposes is counted from the start of the Tax year in which a person reaches age 16 to the end of the tax year before the one in which he reaches state pension age.) For instance someone reaching state pension age in 2005-06 would have a working life from 1978 of 27 years and would need to have worked and to have paid NICs for 3 years (1/10th of 27 years rounded to the nearest whole year) in order to acquire entitlement to State Second Pension on grounds of incapacity for work. Credits will not satisfy this condition, but any year in which the person has worked but not actually paid Class 1 NICs because his earnings, although above the LEL, were below the Primary Threshold, will be treated as if he had paid contributions on those earnings.
Any year when a disabled person has been a carer and qualifies for State Second Pension by virtue of subsection (2)(b) or (c) will be excluded from the number of years in the working life when calculating whether he has met the labour market attachment condition. For instance a person retiring on 6 April 2024 with a working life of 46 years would need 5 years (1/10th of 46 years rounded to the nearest whole number) in which he had worked and paid Class 1 NICs. But if he had received CB for a child under 6, and was treated as precluded from regular employment by responsibilities at home for the 5 years when the child was under that age, or if he was entitled to ICA for 5 years, his working life would be reduced to 41 years and he would only need 4 years (1/10th of 41 years rounded to the nearest whole number).
Section 44A(5) sets the Low Earnings Threshold in State Second Pension at £9,500. This figure will be increased annually in line with rises in national average earnings.
Section 44A(6) defines "occupational pension scheme" and "personal pension scheme" as used in section 44A(2)(d)(ii).
Subsection (4) provides for a person to be treated as if he had an earnings factor of £9,500 in a qualifying year if he is paid Severe Disablement Allowance (SDA) throughout that year and he meets the labour market attachment test set out in subsection (3). (Although SDA will not be available to new claimants from April 2001, those receiving it at that date will continue to do so).

Clause 30: calculation

Subsections (1) and (2) amend subsection (2) of, and insert subsection (3A) into, section 45 of the Contributions and Benefits Act, which sets out the way in which AP is calculated. They provide for AP to be the sum of the entitlement accrued under SERPS and State Second Pension.
Subsection (3) gives effect to Schedule 4, which in turn inserts Schedule 4A into the Contributions and Benefits Act.
Schedule 4A (additional pension) sets out the way in which AP will be calculated under State Second Pension ("the final amount"). There are 4 parts to the Schedule:

Part I sets out the calculation of the final amount;
Part II sets out the calculation of the yearly amount for someone who is not contracted-out for any part of the year;
Part III sets out the calculation of the yearly amount (if any) for someone in contracted-out employment for the whole of the year;
Part IV provides for regulations to be made to provide, in particular for the calculations where someone moves between contracted-out and not contracted-out employment in the course of a year, and between different types of contracted-out provision within a year.

Paragraph 1: the amount

Paragraph 1(1) provides for the amount of AP under State Second Pension to be calculated by adding together the amounts (if any) for each year since the introduction of State Second Pension, and then dividing by the number of relevant years (the number of years in the working life since 1978).

Sub-paragraphs (2) to (7) set out the method of calculating the number of years in the working life to be used in the calculation of any AP payable under State Second Pension to which widows and widowers, based on the contributions of their late spouse. This method is identical to that used under SERPS for those widowed from 6April 1999 onwards.
Sub-paragraph (8) defines "relevant year".

Paragraph 2:surplus earnings factor

Paragraph 2(1) provides for Part II of the Schedule to apply to any year in which a person has a surplus in his earnings factor for that year. There is a surplus when the earnings factor exceeds the qualifying earnings factor (QEF), which is 52 times the weekly LEL for that year.

Sub-paragraphs (2) to (4) set out the way in which State Second Pension will be calculated for someone who is not contracted-out of the state scheme at any time during the year in question.
First, the surplus earnings factors for the years in question are to be divided into the bands shown in the appropriate table in sub-paragraph (3) or (4). Secondly the surpluses in each of the bands are to be revalued for each year, to ensure that they maintain their value in earnings terms. This revaluation (under section 130 of the Administration Act) is in line with the increase in national average earnings up to the year before the year in which state pension age is reached. Thirdly, the revalued surpluses in each band are to be multiplied by the relevant percentage in the tables in sub-paragraph (3) or (4). Finally, the totals for each band are added together to give the total for the year.
This calculation differs from that used for SERPS because of the application of different accrual rates to the surplus in the earnings factor falling within different bands of surplus earnings factors. Under SERPS a person reaching pensionable age from 6 April 2009 onwards would have had one accrual rate of 20 per cent. on his surplus earnings factor. Under State Second Pension the same person will have an accrual rate of 40 per cent. on the surplus in his earnings factor falling within Band 1. Band 1 covers surpluses in the earnings factor which correspond to the amount of earnings between the QEF and the LET. This band will include those low earners, carers and disabled people with broken work records who, under section 44A(2) of the Contributions and Benefits Act, are treated as if they had an earnings factor of £9,500 in a qualifying year.
Surpluses in a person's earnings factor falling within Band 2 will have an accrual rate of 10 per cent. Band 2 covers twice the amount of surplus falling within Band 1, rounded to the nearest £100. Thus, if the QEF is £3,432 (52 times the 1999-2000 weekly LEL) and the LET is £9,500, the amount of surplus falling within Band 1 will be £6,068. This means that the amount of surplus falling within Band 2 will be £12,136 and the upper limit of Band 2 will be £9,500 + £12,136, rounded to the nearest £100, which is £21,600. A person earning £21,600 will receive the same amount from State Second Pension as he would have received from SERPS, because the higher accrual rate on the surplus in his earnings factor falling within Band 1 will be entirely offset by the lower accrual rate in Band 2. Those earning less than £21,600 will receive more from State Second Pension than they would have received from SERPS.
Surpluses in a person's earnings factor falling within Band 3 will have an accrual of 20 per cent., the same as under SERPS. Band 3 covers surpluses in the earnings factor which correspond to earnings which are above the surplus falling within Band 2, but not exceeding the UEL.
A person reaching state pension age before 6 April 2009 would have had an accrual rate higher than 20 per cent. under SERPS. Changes made by the Social Security (Northern Ireland) Order 1986 (the 1986 Order) reduced the accrual rate in SERPS from 25 per cent. to 20 per cent. for those retiring between 2000-01 and 2009-10 (in respect of accruals from 1988-89). There will be similar transitional arrangements for State Second Pension and Table 1 shows the accrual rate for those retiring before 6 April 2009. A person reaching state pension age before then will have accrual rates which give an extra 1 per cent. on the surplus in his earnings factor falling within Band 1, 0.25 per cent. on the surplus in his earnings factor falling within Band 2, and 0.5 per cent. on the surplus in their earnings factor falling within Band 3 for each year by which the year in which he reaches state pension age is earlier than 2009-10. For instance, someone reaching state pension age in the year beginning 6 April 2008 will have accrual rates of 41 per cent. on the surplus in his earnings factor falling within Band 1 (twice what it would have been under SERPS), 10.25 per cent. on any surplus falling within Band 2 (half what it would have been under SERPS) and 20.5 per cent. on any surplus falling within Band 3 (the same as it would have been under SERPS).

Sub-paragraph (5) will enable regulations to be made to bring in Stage 2 of State Second Pension for people with a significant part of their working life ahead of them. Anyone coming within the scope of Stage 2 will earn entitlement to State Second Pension as if he had an earnings factor of £9,500, regardless of his actual earnings. This means that low earners, carers and long-term disabled people with broken work records will continue to be deemed to have an earnings factor of £9,500. However, anyone earning more than £9,500 will only earn entitlement to State Second Pension on the surplus in his earnings factor falling within Band 1, that is the amount between the prevailing QEF and the LET (the deemed earnings factor under new section 44A, which is £9,500, or the prevailing level at the time Stage 2 is introduced). This will only apply to entitlement accrued after the "second appointed year", which will be the year in which Stage 2 is introduced. Any entitlement under Stage 1 will be preserved. It is intended that Stage 2 will not be brought in until stakeholder pension schemes are well established.

Paragraph 3: contracted-out employment, etc. - introduction

Paragraph 3 provides for Part III, rather than Part II, to apply to any year throughout which the person is contracted-out of the state scheme and in an occupational or personal pension scheme.

Paragraph 4: the amount

Paragraph 4 provides for the calculation of the amount for that year (for the purposes of the calculation in paragraph 1) under State Second Pension for someone who is in contracted-out employment (amount C) to be the amount of AP he would have received if he had not been contracted-out of State Second Pension (amount A) less the amount of pension he is deemed to receive in respect of his contracted-out NICs rebate (amount B).

Paragraph 5: amount A

Paragraph 5 defines amount A as the amount a person would have received from State Second Pension if he had not been contracted-out. The calculation is the same as in paragraph 2, except that there is no provision to move to a flat-rate scheme as in Stage 2 of State Second Pension. This is because those who are contracted-out will continue to receive earnings related rebates and their top-up (if any) will be based on the earnings-related first stage of State Second Pension.

Paragraph 6: amount B (first case)

Paragraph 6 (amount B: first case) applies to those who are contracted-out by an occupational salary-related or money purchase scheme, including an employer's occupational-based stakeholder pension. It is the amount of contracted-out second pension which a person is treated as receiving in respect of his NICs rebate.
A person in a contracted-out occupational pension scheme receives a NICs rebate which is calculated to reflect the cost of providing benefits of an actuarial value equivalent to that of the state benefit given up. Currently, under SERPS, the benefit given up is 20 per cent. of life-time earnings for someone who reaches state pension age on or after 6 April 2009.
Under State Second Pension a person in a contracted-out occupational scheme will continue to receive a rebate calculated on this basis. Therefore, amount B, the amount to be deducted from what the person would have earned if he had not been contracted-out of the state scheme, is 20 per cent. (or 20 + N per cent. for someone retiring before 6 April 2009) of the "assumed surplus" in his earnings factor for the year.
For all those earning less than the upper limit of Band 2 (£21,600 in 1999-2000 terms) there will be a surplus when amount B (first case) is deducted from amount A. This is because State Second Pension is more generous than SERPS for those earning less than the upper limit of Band 2. Those earning below the LET benefit from the boost to that threshold, and moderate earners continue to benefit from the increased accrual on their Band 1 earnings until earnings reach the upper limit of Band 2. The surplus of amount A over amount B represents the extra a person would have received in State Second Pension from the low earners' boost. The surplus will be paid as a top-up to the state pension when the person reaches state pension age.

Paragraph 7: amount B (second case)

Paragraph 7 (amount B: second case) applies to those who are contracted-out by reason of membership of an appropriate personal pension scheme, including a non-occupational stakeholder scheme. It is the amount of contracted-out pension which a person is treated as receiving in respect of the NICs rebate.
For those contracted-out into appropriate personal pension schemes, including stakeholder pension schemes, the amount of rebate paid to the scheme will be increased when State Second Pension is introduced to reflect the 3 part accrual rate in State Second Pension itself. This is reflected in Table 5 (for those reaching state pension age before 6 April 2009) and Table 6 (for those reaching state pension age on or after 6 April 2009).
This means that for all those earning at or above the LET, amount B (the revalued assumed surplus) will be the same as amount A (the revalued surplus calculated as if the person had not been contracted-out). Where earnings are above the annual LEL, but below the LET, for the year there will be a surplus when amount B (second case) is deducted from amount A. This surplus represents the extra a person would have received in State Second Pension from the low earner's boost. The surplus will be paid as a top-up to the state pension when the person reaches state pension age.

Paragraph 8: interpretation

Paragraph 8 contains definitions.

Paragraph 9: other cases

Paragraph 9 provides for regulations to be made for calculating the amount of State Second Pension in a year for cases not covered by paragraphs 2 to 7. These will generally be cases where a person's circumstances change during the course of a year. For instance, a person may move between contracted-out and not contracted-out employment or from an occupational pension scheme to a personal pension scheme during the year.
In such cases it will be necessary to apportion the amounts calculated according to the amounts of employment in each circumstance. The guiding principle for these regulations will be to provide a top-up from the state scheme if the person would have received more from State Second Pension than the amount he is treated as receiving in respect of his NICs rebate.
Paragraph 9 also provides for regulations to be made in respect of such other cases as the Department thinks fit. This provision will be used to prescribe how the provisions regarding the contribution equivalent premium and the restoration of state scheme rights will operate under, and interact with, State Second Pension provisions. These are the provisions which deal with the necessary calculations for those rights where state scheme rights are restored by the payment of such a premium.

Clause 31: calculation of Category B retirement pension

Subsection (1) adds subsection (3) to section 46 of the Contributions and Benefits Act (modifications of s. 45 for calculating the additional pension in certain benefits). It alters the method of calculating SERPS which a person who had received Widowed Parent's Allowance (WPA) or Bereavement Allowance (BA) can inherit from a deceased spouse when he reaches state pension age. The alteration is necessary to restore the policy intention that no-one will receive less AP with Category B RP than he would have done before the introduction of bereavement benefits, which are due to come into effect in April 2001.
Subsections (2) and (3) make consequential amendments to section 48BB(5) of the Contributions and Benefits Act and paragraph 4 of Schedule 8 to the 1999 Order.

Clause 32: revaluation

This clause inserts section 130A into the Administration Act.
Section 130A (revaluation of low earnings threshold) enables the Department to make an order, corresponding to an order made by the Secretary of State for Social Security in relation to Great Britain, revaluing the LET in line with increases in average earnings.

Clause 33: supplementary

Subsection (2) extends to State Second Pension the provision in section 21(5A) of the Contributions and Benefits Act whereby NICs paid or treated as paid have effect as if they had been paid on the whole of earnings up to the UEL.
Subsections (3), (4) and (7) insert references to Schedule 4A in sections 39, 39C and 44 of the Contributions and Benefits Act, which govern the rate of Widowed Mother's Allowance (WMA), WPA and BA.
Subsections (5), (6) and (8) clarify the provisions in sections 44(5A) and 45 of the Contributions and Benefits Act on calculating AP entitlement, where the date of death or reaching state pension age falls on or after 6 April 2000. The calculation is to be based on the "adjusted", that is, revalued amount of the surplus in the earnings factor. This has an effect on the calculations under Schedule 4A.
Subsections (9) to (13) insert references to Schedule 4A in sections 48A, 48B, 48BB, 48C and 51 of the Contributions and Benefits Act, which deal with Category B RP.
Subsection (14) inserts definitions of "first appointed year" and "second appointed year" in section 121(1) of the Contributions and Benefits Act. State Second Pension will commence from the "first appointed year", which will be specified by order.
Subsection (15) amends section 172 of the Contributions and Benefits Act to provide for orders appointing the first and second appointed years to be made without being subject to Assembly control.

Earnings factors

Clause 34: modification of earnings factors

Subsection (1) enables regulations to modify section 44(5A) of the Contributions and Benefits Act so that the SERPS calculation takes account of part-year earnings from employment which is not contracted-out.
Subsection (2) applies the modification to the calculation of AP payable with WPA, Category A RP where the pensioner reaches state pension age after 5 April 2000, and Category B RP where the claimant has previously received WPA or BA or where the spouse dies after 5 April 2000.
Subsection (3) provides for the existing regulations to continue to have effect from 6 April 2000 until new regulations are made and subsection (4) provides that references to section 44(5A) of the Contributions and Benefits Act are to be treated as references to section 44(5).
Subsection (5) enables the regulations to include provision for reviewing the calculations made under the old method and recalculating and paying pension in accordance with the new method.
Subsection (6) describes the circumstances in which persons will be affected because their pensions will be calculated using the old method after 5 April 2000.

Preservation of rights in respect of additional pensions

Clause 35: Preservation of rights in respect of additional pensions

Currently widows and, in certain circumstances, widowers may receive the full amount of a deceased spouse's SERPS. However, changes made by the 1986 Order and now consolidated in the Contributions and Benefits Act, halved the amount of SERPS a surviving spouse could receive. The change was due to take effect for those bereaved on or after 6 April 2000. The change was not fully publicised and some people claimed to be under the impression that on death the full amount of SERPS would be payable to the surviving spouse.
It has now been decided to postpone the reduction until 6 October 2002, and to set up an Inherited SERPS Scheme.
Article 49 of the 1999 Order enables the Department to make regulations, subject to the confirmatory procedure, to do one or more of the following:

provide for specified categories of widows and widowers to receive more than 50 per cent. of a deceased spouse's SERPS;
postpone the 50 per cent. reduction due to come into effect from 6 April 2000 to a later year;
set up a scheme to determine who has been misled by incorrect or incomplete information about the 50 per cent. reduction and who, or whose spouses may, as a result, suffer financial loss.

In the meantime the clause ensures that widows and widowers continue to inherit the full amount of a spouse's SERPS.
Clause 35 amends Article 49 of the 1999 Order to provide for the 50 per cent. reduction in inherited SERPS to come into effect in respect of deaths occurring on or after 6 October 2002, and also to provide that regulations may further postpone the change to a later date.
Subsections (1) and (2) change the implementation date for the 50 per cent. reduction in SERPS from 6 April 2000 to 6 October 2002, where entitlement to AP arises in WMA, WPA and Category B RP, including cases where this is increased because of deferred retirement.
Subsection (3) provides that regulations may defer the implementation date of 6 October 2002 to a later date.
Subsection (4) allows regulations to provide that a person can be eligible for the inherited SERPS scheme if, as a consequence of receiving incorrect or incomplete information, he did not consider either taking a step to safeguard the future financial position of his spouse that he might have taken, or refraining from taking such a step which he did take, but might not have taken had he received the right information.
Subsection (5) allows for regulations to prescribe matters which may be relied on, or presumptions that may be made, in the making of decisions under the preserved rights scheme.

Other provisions

Clause 36: home responsibilities protection

Clause 36 inserts sub-paragraph (7A) into paragraph 5 of Schedule 3 to the Contributions and Benefits Act. It provides for regulations to be made requiring those precluded from regular employment by responsibilities at home to supply the necessary information to enable this to be taken into account when assessing pension entitlement. This happens automatically for a person who receives CB for a child under 16 in any year where he does not meet the QEF. Anyone caring for a sick or disabled person will be required to supply the necessary information. Currently this information can be provided at any time up to state pension age, and awards can be backdated to 1978.
It is intended that regulations will require notifications to be made by the end of the third year following the year in which the qualifying activity took place. This requirement will only apply to qualifying periods following the introduction of State Second Pension. It is to ensure that entitlement to State Second Pension on the grounds of caring activity is established and recorded timeously. It will also determine any years to be excluded from the requisite number of years in the calculation of basic RP.

Clause 37: sharing of state scheme rights

Although the value of a pension can currently be taken into account by the courts in reaching a financial settlement on divorce or nullity of marriage, the pension itself can only be offset against other assets or "earmarked", that is the court can order part of a pension to be paid direct to a former spouse by a pension scheme when it comes into payment. "Earmarking" has been little used because it does not facilitate a clean break and the former spouse loses his or her intended retirement income if the ex-spouse whose pension has been "earmarked" dies first.
By contrast, pension sharing provides a former spouse with a pension in his or her own right, security of income throughout retirement and a clean break. It will also enable more couples to reach a fair settlement where the pension to be shared is the most significant asset in the marriage.
However, pension sharing will not be compulsory; it will be an additional option for couples to consider alongside offsetting and earmarking and it is expected that most couples will, as now, continue to offset their pension rights against other assets.
The pension sharing provisions in the 1999 Order broadly provide for all second-tier pensions (private and occupational pensions and SERPS, and in due course State Second Pension) to be sharable.
Clause 37 contains powers to enable the Department to set out in regulations how the cash equivalent of SERPS rights is to be calculated. The regulations will give the Department the power to require that the cash equivalent shall be calculated and verified in such a manner as may be approved by the Government Actuary, or by an actuary authorised by the Government Actuary to act on his behalf for that purpose. The Department will also have the power to require cash equivalents to be calculated and verified by adopting methods and making assumptions which are consistent with guidance published by the Institute of Actuaries and Faculty of Actuaries.
Subsection (1) substitutes paragraphs (4) and (4A) for paragraph (4) of Article 46 of the 1999 Order.
Subsections (2) to (4) make consequential changes to sections 45B, 55A and 55B of the Contributions and Benefits Act, which deal with the reduction in the AP of the member whose pension has been shared, the calculation of the AP acquired by the former spouse who was the beneficiary of the pension share (who receives a "shared AP") and the reduction of a shared AP which has itself been the subject of a pension sharing order or agreement.
Similar provisions are already in place for other pension sharing provisions in the 1999 Order, where a valuation of non-state pension rights is needed.

Clause 38: disclosure of state pension information

As part of the strategy of increasing public awareness of pensions, work has been ongoing to develop integrated pension statements combining state and private pension rights. The aim is to include details of current and projected state pension rights in annual pension or financial statements provided by employers and pension providers. The intention is to improve significantly the take-up of combined pension statements by employees and reduce substantially the administrative burdens on employers and pension providers.
Under existing legal arrangements the Department can only pass state pension details to employers and pension scheme providers with the express consent of employees and scheme members.
Employers and pension scheme providers have expressed concern that continued adherence to an express consent process would lead to a low take-up by individuals and would impose a significant administrative burden which would discourage them from providing combined forecasts.
The measures in the Bill are intended to address these concerns and to ensure that individual state pension details can be made available to third parties such as organisations which provide financial planning services if an individual wishes this to be done.
Clause 38 provides that state pension information can be passed to employers and pension scheme providers unless individuals have indicated that they do not want such information to be disclosed, by opting out.
It also provides that state pension details can be passed to third parties such as organisations which provide financial information services to help individuals identify the most appropriate pension or other saving arrangements provided their express consent has been obtained. In due course this will enable individuals to access their state pension details electronically through the comparative financial databases which are currently being developed.
Subsection (1) provides that the section will apply to state pension information held by the Department or by those providing services to the Department which are concerned with its social security functions.
Subsection (2) provides that regulations may allow the Department to disclose or permit the disclosure of state pension information to those specified in subsection (3) who have made an application for disclosure in the manner prescribed in regulations and in accordance with prescribed conditions.
Subsection (3) sets out the persons who can receive state pension information. These are the trustees and managers of occupational pension schemes, employers and appropriate third parties engaged in the provision of financial information services.
Subsection (4) sets out some of the conditions which must be included in regulations permitting the disclosure of state pension information. These conditions are that appropriate third parties engaged in the provision of financial information services obtain the consent to the disclosure of state pension information by the individual concerned and in the case of the other persons referred to in subsection (3) that either the conditions as to consent or the alternative condition referred to in subsection (5) applies.
Subsection (5) sets out the alternative condition referred to in subsection (4). It provides that steps are to be taken to ensure that individuals are made aware of their right to opt out of the procedures for the provision of state pension details. It also provides that steps are to be taken to ensure that individuals have adequate time to consider what is intended and to opt out if they wish.
Subsection (6) provides that for the purpose of making an application for state pension information, the applicant may disclose to the Department such information relating to an individual as is prescribed in regulations.
Subsection (7) sets out what constitutes state pension information relating to an individual for the purposes of clause 38, namely date of birth, and age at which state pension age is reached, amounts of basic and additional state pension already accrued and projected and additional pension entitlement.
Subsection (8) provides that regulations made under this section shall be subject to negative resolution.
Subsection (9) provides for Article 74(3) to (6) of the 1998 Order to apply to regulations made under this section, to allow the making of different provision for different groups and to make provision for incidental, supplemental and consequential matters. It also provides power for a discretion to be used in dealing with various matters.
Subsection (10) provides that for the purposes of section 115D of the Administration Act the Department's functions relating to social security shall include any power conferred by clause 38.
Subsection (11) contains definitions.

Selection of trustees and directors of corporate trustees

Clauses 39 to 42 amend Articles 16, 18 and 21 of the Pensions Order, provide for Articles 17, 19 and 20 to cease to have effect, and insert Article 18A. Under the current legislation, trustees are required to implement arrangements for at least one third of the scheme trustees to be member-nominated trustees, or where the trustee is a company, for one third of the directors to be member-nominated directors. However, the employer has the right to implement alternative arrangements, which do not include any member trustees or directors, provided the members agree. Under the new provisions all schemes will be required to have at least one third member-nominated trustees or directors, but there will be two ways to determine the nomination and selection arrangements; a flexible nomination and selection procedure laid out in regulations or, alternatively, by the employer proposing nomination and selection arrangements which are subsequently approved by scheme members.
Article 16 (as amended) will require trustees to ensure that arrangements are put in place for at least one third of the trustees to be nominated and selected by scheme members. There will be two routes under which member-nominated trustees can be nominated and selected, a statutory route, the nature of which can be determined by reference to Article 16 and regulations under that Article, where the trustees are responsible for the precise details of the arrangements and for their implementation and an alternative route under Article 18A where arrangements for the nomination and selection of the scheme trustees are proposed by the employer and implemented by the trustees. Article 16 and regulations made under Article 16(9) will apply to both routes (but Article 18A(3) allows provisions different from that made by regulations under Article 16(9) for the scheme-specific route). Equivalent provisions apply in relation to trustee companies.

Clause 39: member-nominated trustees

Clause 39 amends Article 16 of the Pensions Order to provide a revised regulatory framework for appointing member-nominated trustees.
Subsections (2) to (4) remove references to "appropriate rules".
Subsection (5) incorporates the substance of Article 20(3) of the Pensions Order into Article 16. Member-nominated trustees must serve a term of office of between three and six years and be eligible for re-selection.
Subsection (6) incorporates the substance of Article 20(5) of the Pensions Order by inserting paragraph (6A) into Article 16. An employer may require that a non-member can only stand for nomination as a member-nominated trustee if the employer approves.
Subsection (7) amends Article 16(8) to enable arrangements under Article 16 to provide for a trustee who changes category of membership (for example from active to deferred) to cease to be a trustee.
Subsection (8) adds paragraphs (9) and (10) to Article 16. Paragraph (9) is a regulation-making power which will be used to prescribe what is meant by "nominated" and "selected by members", and to further stipulate details of the arrangements trustees are required to make for nominating and selecting member-nominated trustees. It is intended to give trustees flexibility to adopt arrangements that best suit the circumstances of the scheme, for example, by dividing the membership into separate constituencies. Regulations will provide that all active and pensioner members must be given the opportunity to make nominations. Paragraph (10) incorporates the provisions of Article 17(4) of the Order. As now, the regulations will provide for exemptions for certain types of scheme. Schemes that are currently exempt will continue to be so.
Subsection (9) provides for Article 17 to cease to have effect.

Clause 40: corporate trustees

Clause 40 makes changes, similar to the changes made to Article 16 for individual trustees, to Article 18 of the Pensions Order for member-nominated directors in schemes where the trustee is a company.
In addition subsection (2)(a) extends the scope of Article 18 to include all schemes where there is a trustee company and there is no trustee of the scheme who is not a company.
Subsection (8) modifies Article 18(8) to ensure that the membership of different schemes will be aggregated where the trustee company is trustee for more than one scheme, unless the trustee company decides otherwise.
Subsection (10) provides for Articles 19 and 20 of the Pensions Order to cease to have effect.

Clause 41: employer's proposals for selection of trustees or directors.

Clause 41 inserts Article 18A into the Pensions Order.
Article 18A (employer's proposals for selection of trustees or directors) allows employers to propose for adoption nomination and selection arrangements, which are subsequently approved by scheme members.
Article 18A(1)(a) gives employers the right to propose arrangements for nominating and selecting trustees. Paragraph (1)(b) ensures that the arrangements provide for at least one third of the trustees to be member-nominated trustees, and that the other requirements of Article 16(3) to (7) apply. Paragraph (1)(d) requires that the proposal is approved by scheme members and includes a regulation-making power, similar to that in Article 21(7) of the Pensions Order, which will enable a statutory consultation procedure for seeking member approval for the proposal to be prescribed. This will be largely the same as the current procedure provided for in Schedule 1 to the Occupational Pension Schemes (Member-nominated Trustees and Directors) Regulations (Northern Ireland) 1996, although the procedure may be tightened to reduce any opportunity for abuse. Regulations made under paragraph (1)(e) will impose additional conditions on employers, for example to give notice to the trustees of the intention to propose arrangements. Article 18A(2) makes equivalent provision for trustee companies. Once approved, the trustees are charged with implementing the arrangements.
Article 18A(3) allows regulations governing arrangements under an employer's proposal to provide for different nomination and selection arrangements from those made under the statutory route. For example, the employer will be able to propose that nominations for trustees are made by organisations representing members (such as Trades Unions and pensioner organisations) as well as members themselves.
Article 18A(4)(a) provides the power to make regulations governing the manner and time in which trustees must implement approved arrangements. This is similar to the current power in Article 21(3)(a). Trustees will be given six months following approval to ensure that the arrangements are made, and trustees appointed. Regulations under Article 18A(4)(b) will determine when approval of Article 18A arrangements ceases to have effect. As now, approval will last for six years. They will also determine what happens when approval of arrangements ceases to have effect without the existing arrangements having been re-approved or fresh arrangements approved.
Article 18A(5) enables regulations to be made about approval of arrangements for the purpose of Article 18A. Regulations under Article 18A(5)(a) will give OPRA the discretion to treat proposals as approved in certain circumstances where there is a breach of the requirements of the approval process. Regulations under Article 18A(5)(b) will provide for proposals to be treated as approved by persons who do not object. The existing Article 21(7)(b) allows the approval process to operate in this way. Regulations will, as now, provide for proposals to be approved if not more than 10 per cent. of those consulted object.
Article 18A(6) permits nominations for a member-nominated trustee or director to be made by an organisation of a prescribed description which represents the interests of members of the scheme. It also permits nominations by such organisations to be the only nominations. It is intended that regulations will prescribe that recognised Trades Unions and pensioner organisations, for example, can make such nominations.
Article 18A(7) disapplies the Article as far as it applies to member-nominated trustees in cases where all the trustees comprise all the members, or where there is only a corporate trustee, or trustees.
Article 18A(8) is a regulation-making power to disapply the Article for schemes of a prescribed description. This provision is required in addition to the exemptions from Articles 16 and 18 because those Articles impose a mandatory requirement on all trustees, whereas this Article only applies if the employer chooses to propose some scheme-specific arrangements. In practice, Article 18A will be disapplied for the same classes of scheme that are exempt from Articles 16 and 18.
Subsections (2) and (3) make consequential amendments to Articles 68 and 114 of the Pensions Order.

Clause 42: non-compliance in relation to arrangements or proposals

Clause 42 makes consequential amendments to Article 21 of the Pensions Order.
All references to appropriate rules are removed, together with references to Articles 17 and 19.
Paragraph (2A) is inserted in Article 21 to allow the Occupational Pensions Regulatory Authority (OPRA) to impose sanctions on an employer who fails to carry out the statutory consultation procedure properly. The equivalent provision is currently in Articles 17(5) and 19(5). OPRA already have the power under Article 21 to impose sanctions on trustees who fail, without good cause in the case of individual trustees, to comply with the requirements. OPRA can prohibit a trustee or impose a financial penalty.

Winding-up of schemes

Clause 43: information to be given to the Authority

Clause 43 inserts Articles 26A, 26B and 26C into the Pensions Order. It also amends Article 115 to allow these Articles to be modified by regulations to impose the duties on other people. These measures aim to speed up the process of winding-up by introducing accountability into the winding-up process and by giving OPRA a more active role in the process than at present.
Scheme rules or the trust deed setting up the scheme set out the events which may trigger the cessation and winding-up of an occupational pension scheme. These generally are the employer's insolvency, notice from the employer that he no longer wishes to sponsor the scheme or failure by the employer to pay contributions within a specified period. It is the trustees or managers who are required to carry out the winding-up.
Winding-up can be a time-consuming task, sometimes taking many years, particularly where scheme records have not been well kept. During this time members may feel particularly vulnerable.
The measures aim to ensure that a trustee is in place following the insolvency of the employer so that decisions can be made about the future of the scheme. Where winding-up has started, trustees or managers will be required to make reports to OPRA if winding-up is not completed within a specified period of time and OPRA will be able to direct action to speed the process along. OPRA will also be able to modify scheme rules where they need to be changed to allow winding-up to proceed.
Articles 26A, 26B and 26C set out circumstances in which trustees or managers of schemes, or scheme administrators are required to notify OPRA during the insolvency of the employer.
Subsection (1) amends references in Article 22 of the Pensions Order to include Article 26A. Subsection (2) inserts Articles 26A, 26B and 26C into the Pensions Order.
Article 26A (information to be given to the Authority in relation to a scheme to which Article 22 applies) sets out the circumstances in which the trustees or persons involved in the administration of a scheme must make a report to OPRA where the scheme has to have an independent trustee during the insolvency of the employer.
Article 26A(1) requires the trustees of a scheme, where the scheme has to have an independent person in place as trustee during the insolvency of the employer, to notify OPRA that there appears to be no independent trustee, unless they have been told by the insolvency practitioner or official receiver that he is satisfied that one of them satisfies the independence test, or that they have reasonable grounds for believing that the practitioner or official receiver is satisfied that one of them does so. The notification must be made as soon as reasonable practicable.
Article 26A(2) places on those involved with the administration of the scheme a requirement similar to that in paragraph (1) where there are no trustees.
Article 26A(3) sets out the circumstances where notification to OPRA is not required. These are when it appears that the insolvency practitioner or official receiver intends to appoint an independent trustee and that he will do so within a specified period.
Article 26A(4) removes the requirement for a report to be made under paragraph (2) by those involved with the administration of the scheme where it appears that OPRA are already aware that the scheme has no trustees.
Article 26A(5) ensures that the requirement in paragraph (1) covers later situations where the practitioner or official receiver is no longer satisfied that the independence test is met, even though he may previously have told the trustees that it was met.
Article 26A(6) defines whether the practitioner or receiver is satisfied as to a person's independent status by reference to the independence test in Article 23.
Article 26A(7) provides that Article 10 of the Pensions Order applies to trustees who fail to take reasonable steps to ensure compliance with the requirements to notify OPRA regarding the independent trustee. Article 10 allows OPRA to impose financial penalties.
Article 26A(8) provides that Article 10 applies to anyone who fails to comply with the paragraph (2) requirement to notify OPRA that there are no trustees.
Article 26B (information to be given in cases where Article 22 disapplied) sets out the circumstances in which reports must be made to OPRA on the insolvency of the employer where the scheme is not required to have an independent trustee.
Article 26B(1) requires the persons involved, if any, in the administration of a trust scheme, where there is no requirement for an independent trustee, to notify OPRA where the employer of the scheme is the sole trustee and he becomes insolvent, unless they have an assurance from the employer. For multi-employer schemes this will apply only where all the employers are insolvent.
Article 26B(2) provides that, for the purposes of this Article, an employer=s assurance has been received if he has told the persons involved in the administration of the scheme that there is no reason why the employer should not continue to act as a trustee of the scheme, he does not withdraw that statement, and the trustees of the scheme have not changed since the employer made that statement.
Article 26B(3) removes the requirement for a report to be made under paragraph (2) where it appears that OPRA are already aware of the situation or where the prescribed period has not elapsed, or at any other time which is prescribed.
Article 26B(4) provides that Article 10 of the Pensions Order applies to anyone who fails to comply with the requirements of this Article.
Article 26C (construction of Articles 26A and 26B) sets out further details relating to the requirements in Articles 26A and 26B.
Article 26C(1) lists the categories of people considered to be involved in the administration of the scheme for the purpose of the requirements in Articles 26A and 26B. For example, persons who are involved in the administration of the scheme in a professional capacity, such as actuaries and auditors, the fund manager, the employer of the scheme, their employees, agents or contractors who carry out administration tasks, are not considered to be involved in the administration of the scheme.
Article 26C(2) provides that regulations may add to the list of those who are not considered to be involved in the administration of a scheme.
Article 26C(3) provides that any requirement in Article 26A or 26B to do something "as soon as reasonably practicable" may be replaced by time limits specified in regulations.
Subsection (3) inserts a reference to Articles 26A to 26C into Article 115(2) of the Pensions Order to allow regulations to exempt schemes from the requirements of these Articles.
Subsection (4) adds paragraph (3) to Article 115. This allows for regulations to modify Articles 26A and 26B so as to impose the notification duty on persons other than trustees and other than those involved in the administration of the scheme.
Subsection (5) amends section 173 of the Pensions Schemes Act so that regulations may prescribe who is to be treated as a trustee for the purposes of Articles 22 to 26C of the Pensions Order.

Clause 44: modification of a scheme to secure winding-up

Clause 44 inserts Article 71A into the Pensions Order.
Article 71A (modification by Authority to secure winding-up) extends OPRA's existing powers to modify scheme rules, to enable winding-up to continue.
Article 71A(1) enables OPRA to modify scheme rules to ensure that the scheme is properly wound up, but only where the scheme is being wound up because the employer is insolvent.
Article 71A(2) only allows OPRA to modify scheme rules where they have been asked by the trustees or managers to do so. The request cannot be made in advance. As with the modification itself, the request may be made only while the scheme is being wound up and the employer is insolvent.
Article 71A(3) requires that, unless regulations provide otherwise, the application to OPRA must be in writing.
Article 71A(4) allows regulations to set out the detail of the information which is contained in, or documents which must accompany, the application. The regulations may also provide for certain people to be notified about the request for a modification, what the notification must contain, the time limit within which they will have to contact OPRA to make representations and how OPRA must deal with the request for modification.
Article 71A(5) limits OPRA's powers to modify scheme rules to the minimum necessary to enable the scheme to be wound up properly and for any modification to be restricted to those which would not have a significant adverse effect on accrued rights or benefit entitlement under the scheme.
Article 71A(6) makes it clear that any modification made by OPRA will be as effective in law as if it had been made under scheme rules and without any requirement to obtain consent before any modification can be made.
Article 71A(7) allows regulations to exempt certain types of schemes in particular circumstances or for the requirements in the Article to apply with modifications in particular circumstances.
Article 71A(8) sets out the circumstances in which an employer is to be treated as insolvent for the purposes of the Article. The circumstances are those which trigger the application of Article 22 of the Pensions Order (or would trigger it if that Article applied to the scheme), that is where an insolvency practitioner or official receiver takes up office.
Article 71A(9) excludes public service pension schemes from this Article.

Clause 45: reports about winding-up

Clause 45 introduces a number of provisions including a requirement for trustees or managers to make reports to OPRA, a definition of when a scheme begins to wind up and a requirement for records to be kept of a decision to wind up a scheme.
Clause 45(1) inserts Article 72A into the Pensions Order.
Article 72A (reports to Authority about winding-up) places a duty on the trustees or managers of a scheme which is being wound up to make periodic reports to OPRA.
Article 72A(1) introduces a requirement for trustees or managers of a scheme which began to wind up after a specified date to make regular reports to OPRA about the progress of winding-up.
Article 72A(2) allows regulations to specify when the first report should be made to OPRA. That period will be within a specified period of the date on which winding-up began, or the date on which the winding-up was brought within the Article, if later.
Article 72A(3) sets out the timing of subsequent reports to OPRA , which must be made at no more than twelve-monthly intervals after the date of the previous report. If the last report was made late, the next one must still be made no later than twelve months after the last one was due.
Article 72A(4) allows OPRA to extend the deadline for making any follow-up reports. OPRA can only extend the interval by up to twelve months (under paragraph (5)) and can only grant the extension within the time limit, not after it. There is no similar power to extend the time for the first report.
Article 72A(6) allows more than one extension of the deadline for the follow-up report, but the total extensions for that report must not exceed the twelve-month deadline mentioned in paragraph (5).
Article 72A(7) provides that regulations may make requirements as to the reports to OPRA, including how the reports should be made and what they must contain.
Article 72A(8) provides that regulations may provide for circumstances in which reports need not be made to OPRA, and may vary the twelve-monthly period in which subsequent reports must be made. It also provides that regulations may alter the periods in which follow-up reports must be made, and the period over which OPRA can extend the time limit for those reports.
Article 72A(9) applies Articles 3 and 10 of the Pensions Order, so that OPRA may prohibit from being a trustee someone who fails to take reasonable steps to ensure compliance and may impose a financial penalty on a trustee or manager who fails to comply with the requirements.
Subsection (2) adds paragraphs (4) to (8) to Article 121 of that Order (interpretation of Part II) to set out when winding-up begins for the purposes of Part II of that Order.
Subsection (3) inserts Article 49A into the Pensions Order.
Article 49A (record of winding-up decisions) requires trustees or managers of an occupational pension scheme to keep written records of any decision to wind up the scheme, decisions about when steps should start to be taken for the purposes of winding-up the scheme, and of any decision to defer winding-up. It provides that regulations may extend the requirements to any person who, although not a trustee or manager, can nevertheless make a decision to wind the scheme up. It also allows regulations to specify requirements about the form and content of the record. Sanctions under Articles 3 and 10 can be imposed for non-compliance. Where regulations extend the requirements to other persons, sanctions may be provided for in regulations.

Clause 46: directions for facilitating winding-up

Clause 46 inserts Articles 72B and 72C into the Pensions Order.
Articles 72B (directions by Authority for facilitating winding-up) and 72C (duty to comply with directions under Article 72B) allow OPRA to direct that specific information should be provided, or action taken within a prescribed timescale, where a scheme has begun winding-up and imposes sanctions on those not complying with OPRA's directions.
Article 72B(1) provides that where a scheme has begun winding-up, OPRA will have power to give directions if they feel it is appropriate to do so on any of the grounds in paragraph (2).
Article 72B(2) sets out grounds which OPRA may take into account. It also allows regulations to prescribe further circumstances in which OPRA may give directions.
Article 72B(3) limits OPRA's powers of direction to where the first report has been made, or should have been made, to OPRA under Article 72A, unless regulations prescribe otherwise.
Article 72B(4) allows regulations to provide that in certain circumstances OPRA may only give directions when asked to do so by the trustees or managers of schemes.
Article 72B(5) provides that a direction from OPRA must be given in writing to trustees or managers, persons involved in the administration of the scheme or persons prescribed in regulations.
Article 72B(6) sets out requirements that can be imposed by a direction. They include providing information to the trustees or managers, or persons involved in the administration of the scheme, or persons prescribed in regulations (which may include OPRA) and requiring other steps to be taken.
Article 72B(7) allows OPRA to extend the time limit for persons to comply with the direction, on more than one occasion if necessary, where OPRA consider it appropriate to do so.
Article 72B(8) allows for regulations to limit what OPRA may require in their directions and sets out requirements as to when and how applications must be made for an extension to the period for complying with the direction.
Article 72B(9) specifies the persons involved in the administration of the scheme. This is identical to Article 26C(1) of the Pensions Order.
Article 72B(10) provides that regulations may add to the list of those who are not considered to be involved in the administration of the scheme. This is identical to Article 26C(2) of the Pensions Order.
Article 72C deals with the duty to comply with directions under Article 72B.
Article 72C(2) provides for Article 3 of the Pensions Order to apply to any trustee who fails to take reasonable steps to ensure compliance and has no reasonable excuse.
Article 72C(3) applies Article 10 to any trustee or manager who fails to take reasonable steps to ensure compliance, and has no reasonable excuse.
Article 72C(4) applies Article 10 to anyone else who fails to comply with a direction, and has no reasonable excuse.
Article 72C(5) provides that any duty of non-disclosure is not a reasonable excuse for failure to supply information in accordance with directions from OPRA. The statutory duty to comply with directions will mean that a person complying with a direction will not be in breach of the non-disclosure duty.

Other provisions

Clause 47: restriction on index-linking where annuity tied to investments

Rights which accrue from 5 April 1988 in respect of guaranteed minimum pension (GMP) and protected rights have to be indexed by reference to the retail prices index (RPI), capped at 3 per cent. If inflation is above 3 per cent. SERPS is fully indexed.
All rights accrued from 6 April 1997 in salary-related and money purchase schemes have to be indexed by reference to the RPI, capped at 5 per cent. Protected rights in appropriate personal pension schemes are also subject to the same level of indexation. Additional voluntary contributions and personal pensions are not subject to an indexation requirement.
Investment-linked annuities enable the annuitant to benefit from growth in a range of underlying investments after retirement, although this goes hand in hand with a risk of possible falls in pension income if investment performance is poor. Although an investment-linked annuity will not guarantee to produce an increase in the pension each year, such annuities have performed better overall than the traditional index-linked annuity in recent years.
The measures in the Bill will give members of defined contribution occupational pension schemes the option of using the non-protected rights elements of their accumulated pension fund accrued from April 1997 to buy an investment-based annuity instead of an index-linked annuity. They will continue to be able to choose a traditional index-linked annuity if they wish. The clause also provides for a power to prescribe the conditions which investment-based annuity products must satisfy, although it is not envisaged that this power will be used in the short term. Regulations will only be considered necessary if investment-based products were, in future, designed in such a way that they provided a high starting income with little prospect for future increases.
Clause 47 sets out the circumstances when an investment-linked annuity can be used to satisfy the indexation requirements which are currently contained in Article 51(2) of the Pensions Order.
Subsection (1) provides for Article 51A of the Pensions Order to supersede the requirement to increase a pension in payment annually by the published RPI figure, capped at 5 per cent.
Subsection (2) inserts Article 51A into the Pensions Order.
Article 51A (restriction on increase where annuity tied to investments) applies to pensions under a money purchase scheme.
Article 51A(1) provides that an annual increase under Article 51 is not required in respect of the element of money purchase scheme funds described in sub-paragraphs (a) to (c):

sub-paragraph (a) stipulates that the alternative pension is payable from an investment-linked annuity;
sub-paragraph (b) prevents the inclusion of benefits in respect of protected rights; and
sub-paragraph (c) provides that regulations may prescribe conditions to be satisfied for investment-linked annuity products.

Article 51A(2) provides for the option of an investment-linked annuity, whether provided under an annuity contract or payable from the funds of money purchase schemes.
Article 51A(3) provides for the new rule to apply to increases after the date appointed for the coming into operation of Article 51A.

Clause 48: information for members of schemes

It is intended to amend the regulations which require annual benefit statements to be sent to members of occupational and personal pension schemes with money purchase benefits.
In addition to the existing information about contributions paid and the current value of the "pot", they will be required to include an illustration of the likely value of the "pot" at retirement age, and the benefits it might provide, expressed in today's prices.
Clause 48 amends section 109 of the Pension Schemes Act.
Subsection (1) inserts paragraph (ca) into section 109(1) to permit regulations to require an annual benefit statement in a money purchase scheme to include an illustration of the future benefits which might become payable under the scheme.
Subsection (2) inserts subsections (3A) and (3B) into section 109. Subsection (3A) will allow the basis for calculating any forecast of future benefits to be determined by reference to guidance notes. This will allow the Department to delegate responsibility for deciding the method of calculation to a suitable professional body, such as the Institute of Actuaries and the Faculty of Actuaries. Subsection (3B) will provide for regulations made under section 109 to allow OPRA to extend time limits for compliance with requirements set out in regulations, in relation to cases where schemes are being wound up.

Clause 49: jurisdiction of the Pensions Ombudsman

The Social Security Act 1990 established the office of the Pensions Ombudsman, by inserting provisions into the Social Security Pensions Act 1975. The Social Security (Northern Ireland) Order 1990 inserted into the Social Security Pensions (Northern Ireland) Order 1975 provisions relating to the functions of the Pensions Ombudsman in relation to Northern Ireland and these functions are now contained in sections 141 to 148 of the Pension Schemes Act. The Pensions Ombudsman can investigate complaints of injustice caused by maladministration and disputes of fact and law brought by members of occupational and personal pension schemes, and their spouses and dependants, against trustees, managers or employers of those schemes. Complaints can also be brought by the same people against the administrators of schemes. The Pensions Ombudsman is also able to investigate complaints and disputes from employers against trustees or managers in relation to the same scheme and vice versa for complaints (but not disputes) and investigate complaints from trustees or managers of one scheme against the trustees or managers of another scheme.
Clause 49 amends section 142 of the Pension Schemes Act to extend the jurisdiction of the Pensions Ombudsman.
Subsection (2) inserts paragraph (ba) into section 142(1). This paragraph allows the Pensions Ombudsman to investigate complaints made by the independent trustee (the trustee who is required under the Pensions Order to be in place when the sponsoring employer of a final salary occupational pension scheme is insolvent) alleging maladministration by the other trustees, or the former trustees, of a scheme. This will enable an independent trustee, if he believes that the actions of other trustees, or former trustees, constitute maladministration which would have a detrimental effect on the scheme members, to refer the matter to the Pensions Ombudsman.
Subsection (3) inserts paragraphs (e) to (g) into section 142(1). These paragraphs set out additional types of disputes or complaints which the Pensions Ombudsman can investigate.

Paragraph (e) allows trustees of the same scheme to refer disputes between themselves to the Pensions Ombudsman. This will include "friendly" disputes, where the trustees are seeking a direction as to how they should act.
Paragraph (f) allows the Pensions Ombudsman to investigate a dispute between the independent trustee and other trustees, or former trustees, of the scheme. This will mean that an independent trustee, who has concerns about the actions of the trustees or former trustees prior to his appointment, will be able to refer the matter to the Pensions Ombudsman. At present, the independent trustee and the other trustees of the scheme are barred from referring such matters to the Pensions Ombudsman.
Paragraph (g) allows a sole trustee to raise a question with the Pensions Ombudsman about the carrying out of his functions. This will enable sole trustees to obtain a direction from the Pensions Ombudsman as to how they should act, in the same way as trustees in "friendly" disputes can.

Subsection (4) inserts subsections (1A) and (1B) into section 142.
Subsection (1A) prevents the Pensions Ombudsman from investigating the complaints or disputes listed in subsection (1)(c) to (g) unless they are referred to him by specific people, as provided for in paragraphs (a) to (e).

Paragraph (a) reproduces the effect of existing subsection (1)(c). It prevents the Pensions Ombudsman from investigating a dispute between a scheme member or another beneficiary and the trustees or employer unless it is referred to him by the member or beneficiary. This prevents employers or trustees referring disputes with members to the Pensions Ombudsman.
Paragraph (b) prevents the Pensions Ombudsman from investigating a dispute between employers and trustees or the trustees of different schemes unless the dispute is referred to him by one of the employers or the trustees. This removes the bar on trustees referring disputes with the scheme's sponsoring employer to the Pensions Ombudsman, which is the unintentional effect of section 142(1)(d).
Paragraph (c) limits the Pensions Ombudsman to investigating a dispute between trustees of the same scheme where half or more of the trustee board have agreed to refer it to him. Having at least half of the trustee board agree to refer the matter will prevent a minority of the board delaying the actions of the majority. It will also allow trustees to seek clarification without having to go to court. This will be particularly useful when a scheme is winding-up, as it will reduce costs on the scheme at a time when it needs to conserve its resources.
Paragraph (d) allows only the independent trustee, and not the other trustees, of a scheme subject to insolvency procedures to refer a dispute to the Pensions Ombudsman.
Paragraph (e) ensures that the Pensions Ombudsman will not accept a question referred to him about the functions of a sole trustee unless it is referred to him by that sole trustee.

Subsection (1B) ensures that the Pensions Ombudsman can treat a question referred to him by a sole trustee as if it were a reference to him, or determination by him, of a dispute.
Subsection (5) will extend to members of personal pension schemes the facility to complain about actions of the employer. At present, if an employer is involved in the running of a personal pension scheme, particularly a group personal pension scheme, members of the scheme cannot refer complaints to the Pensions Ombudsman.
Subsection (6) makes provision in respect of one of the circumstances where the Pensions Ombudsman cannot currently investigate. At present, if a case has gone to an industrial tribunal or a court, even in error, the issue cannot then be referred to the Pensions Ombudsman. The new provision will allow the Pensions Ombudsman to accept a complaint or dispute for investigation where the subject matter has previously gone before an industrial tribunal or a court, and the case has been discontinued. Subsection (10) ensures that the changes made by subsection (6) to the Pensions Ombudsman's remit will not apply to any cases which were referred to him before the new provisions come into operation.
Subsection (7) provides that a person entitled to a pension credit as against the trustees or managers of a scheme can be considered an actual or potential beneficiary within the meaning of section 142(7), for the purposes of making a complaint or referring a dispute to the Pensions Ombudsman. This will allow those who have entitlement to a pension credit, but who will not become a member of the scheme awarding the credit, to make a complaint or refer a dispute to the Pensions Ombudsman.
Subsection (8) inserts a definition of "independent trustee" into section 142(8). The independent trustee will be the trustee appointed as such by the insolvency practitioner under Article 23(1)(b) of the Pensions Order.
Subsection (9) replaces the words "complaints and disputes" in section 142(1) with the word "matters". This ensures that the Pensions Ombudsman can consider questions from sole trustees which could not be regarded as disputes. It also replaces part of section 142(1)(b) to clarify the position regarding the identity of the scheme to which the complaint relates in cases where complaints of maladministration are made by the trustees of one scheme against the trustees of another scheme. This subsection also removes the words "which arises" from sections 142(1)(c) and (d). This will allow disputes between current and former trustees to be considered by the Pensions Ombudsman.

Clause 50: investigations by the Pensions Ombudsman

As a result of a court judgement, under the current legislation, the Pensions Ombudsman should not accept a case if the investigation of it would impact upon the interests, particularly the financial interests, of those not involved directly in the case. This is because those not directly involved in the case are currently not able to make representations to the Pensions Ombudsman and are not, therefore, bound by his determinations. Clause 50 amends sections 144, 145 and 147 of the Pension Schemes Act.
Subsection (2) inserts paragraphs (ba) and (bb) into section 144(4). These paragraphs extend the meaning of "party to an investigation" for the purposes of staying court proceedings. These paragraphs allow the Pensions Ombudsman to link to a case those whose interests may be affected by the complaint or dispute or its outcome.
Subsection (3) substitutes subsections (1) to (1B) for section 145(1).

Subsection (1) lists the persons to whom the Pensions Ombudsman is obliged to give an opportunity to comment, with regard to matters being investigated by him. The Pensions Ombudsman is obliged to give those who are being complained against, those who are responsible for the management of schemes to which the dispute relates and those whose interests are, or may be, affected, the opportunity to put their point of view to him.
Subsection (1A) ensures that the Pensions Ombudsman is not required to give an opportunity to make representations to someone who (as the person making the complaint or reference) has had adequate opportunity to comment or whose interests are being represented by a person appointed to do so.
Subsection (1B) makes clear that if a person has been appointed to represent a group, after making initial representations on his own behalf, that person should also be given the opportunity to make comments as a representative of that group.

Subsection (4) inserts paragraph (ba) into section 145(3), which lists those matters which can be covered in the Pensions Ombudsman's procedure rules. This paragraph allows rules to be made permitting the Pensions Ombudsman to appoint a person to represent a group of those who have the same interest in a complaint, for instance, a group such as all the pensioner members. The appointed person will then make representations on behalf of that group. The precise manner in which this representative will be appointed will be set out in the Personal and Occupational Pension Schemes (Pensions Ombudsman) (Procedure) Rules (Northern Ireland). The procedure for selection will ensure that anyone nominated to represent a particular group can satisfy the Pensions Ombudsman that he is truly representative of that group and does not have a conflict of interest in the particular case.
Subsection (5) inserts paragraph (d) into section 145(3). This adds an additional item to the list of matters which can be included in procedure rules. This will enable the rules to include provision to allow the Pensions Ombudsman to order that the cost of legal expenses in a particular case can be met from the funds of the scheme. It is envisaged that such orders will be made when the case is particularly complex and involves the interests of several groups. The procedure rules may state that the order should cover only certain expenses up to a certain limit.
Subsection (6) inserts subsection (8) into section 145. This is intended to ensure that those whose interests may be affected by any determination, or any directions the Pensions Ombudsman may give in relation to the dispute, will also have the opportunity to make representations rather than just those with a direct interest in the complaint or dispute.
Subsection (7) adds paragraph (c) to section 147(1). Section 147(1) specifies who should be given notice of the Pensions Ombudsman's determination in a particular case. The additional provision requires the Pensions Ombudsman to issue a copy of his determination in a particular case to all those who could have commented on the allegations. Therefore, determinations will be sent to those against whom the allegations are made and to those who could have made representations to the Pensions Ombudsman. These would be either those identified by the Pensions Ombudsman as able to make representations directly to him on their own behalf, or those who are representing groups of individuals who have the same interest.
Subsection (8) inserts paragraphs (ba) and (bb) into section 147(3). Section 147(3) sets out who is bound by the Pensions Ombudsman's determination. This ensures that those who have had the opportunity to comment or make representations, either as individuals or via an appointed person, will be bound by the Pensions Ombudsman's determination. Those who are bound by the determination can appeal against it on a point of law to the Court of Appeal.
Subsection (9) provides that changes to the remit of the Pensions Ombudsman will not apply to any cases which were referred to him before the provisions come into operation.

Clause 51: prohibition on different rules for overseas residents, etc.

The Council of the European Union adopted Council Directive 98/49/EC on 29 June 1998. Its purpose is to safeguard the occupational pension rights of employed and self-employed workers who move within the European Community, and thereby promote the free movement of workers. Occupational pension schemes in the United Kingdom already operate within the spirit of the Directive, but existing legislation does not currently oblige schemes to comply with two specific requirements of the Directive. Clause 51 is intended to ensure compliance with the Directive by:

preventing occupational pension schemes from having scheme rules which allow the accrued pension entitlement of members or beneficiaries to be altered because the member or beneficiary wants payment to be made anywhere outside the United Kingdom; and
allowing workers who work outside the United Kingdom to continue membership of their employer's United Kingdom occupational pension scheme. Any such scheme members, and the sponsoring employer, will be able to continue to make contributions to the scheme, subject only to limitations imposed by the Inland Revenue.

Clause 51 inserts Article 66A into the Pensions Order.
Article 66A (prohibition on different rules for overseas residents, etc.) prevents an occupational pension scheme from having different rules for payment of benefits to persons living overseas.
Article 66A(1) provides that the Article applies to an occupational pension scheme which has any rule which contravenes the requirements in paragraphs (2) and (3) in respect of scheme membership, payment of scheme benefits and the payment of contributions.
Article 66A(2) prevents discrimination in respect of the entitlement to pension benefits of a member or beneficiary, and prevents any discrimination in respect of the payment of those benefits according to whether or not a place outside of the United Kingdom is to be the destination of that payment.
Article 66A(3) stops occupational pension schemes having a rule to prevent workers who are posted to work in a place outside the United Kingdom from continuing to remain eligible to be members of that occupational pension scheme. Members may not be prevented from making contributions to their occupational pension scheme. That occupational pension scheme must not have a rule which prevents the scheme from accepting contributions from the sponsoring employer in respect of members who are posted to work wholly or partly outside the United Kingdom.
Article 66A(4) and (5) provides for provisions contravening paragraphs (2) and (3) to have effect on any day on or after the day on which the Bill receives Royal Assent as if they did not contravene those paragraphs. This means that payment of pension benefits to a member or beneficiary of an occupational pension scheme must be on the same basis, irrespective of the destination of the payment.
Article 66A(6) allows for deductions, such as income tax, to be made from pension benefits due to members and beneficiaries, notwithstanding any discriminatory effect. Similarly, it is made clear that schemes continue to comply with the conditions for approval, exemption of tax relief given or available under the Tax Acts.

Clause 52: miscellaneous amendments and alternative to anti-franking rules

Clause 52 gives effect to Schedule 5, which makes amendments to the Pension Schemes Act and the Pensions Order.

Part I: miscellaneous amendments

Paragraph 1: guaranteed minimum pension for widows and widowers

Paragraph 1 amends the provisions of the Pension Schemes Act dealing with GMPs for widows and widowers.
Sub-paragraph (1) inserts subsection (4A) into section 13. This amendment is consequential upon the introduction of bereavement benefits by the 1999 Order.

Subsection (4A)(a) provides that the scheme must provide a GMP for the widow or widower for any period for which a Category B RP is payable by virtue of the earner's contributions, or would have been payable but for the overlapping benefit provisions in section 43(1) of the Contributions and Benefits Act. This restates the existing law.
Subsection (4A)(b) ensures that a GMP is payable for any period for which WPA or BA is payable to the widow or widower by virtue of the earner's contributions.
Subsection (4A)(c) ensures that where a person ceases to be entitled to WPA or BA when over 45, that person will continue to receive a GMP, provided that he or she is not cohabiting with a person of the opposite sex and provided that he or she has not remarried. Currently a person entitled to widows' benefits (WMA or WP) when over the age of 45 continues to receive those benefits and, accordingly, a GMP, until state pension age, unless she remarries or cohabits with a person of the opposite sex.
Subsection (4A)(c) thus preserves the current position regarding GMPs, even though the position regarding entitlement to bereavement benefits is to change.

Sub-paragraphs (2) and (3) make minor amendments to ensure that people whose entitlement to widows' benefits continues under the existing law also continue to be entitled to GMPs under the existing law.

Paragraph 2: transfer of rights to overseas personal pension schemes

Paragraph 2 amends sections 16(1) and 24(2)(b) of the Pension Schemes Act to allow the transfer of accrued rights to an overseas pension arrangement. Sub-paragraph (3) inserts a definition of "overseas arrangement" into section 176(1).

Paragraph 3: protected rights

Paragraph 3 amends section 24 of the Pension Schemes Act.
Protected rights are that part of a member's fund within a personal pension or occupational money purchase scheme that is derived from the NICs rebate. Section 24 provides that effect may only be given to protected rights in the way specified in that section. It permits effect to be given to protected rights by way of a lump sum only in limited circumstances and, in particular, not before the member has reached age 60.
Sub-paragraph (3) inserts subsections (4A) and (4B) into section 24.

Subsection (4A) provides for effect to be given to a member's protected rights in an occupational pension scheme by way of a lump sum where the trustees or managers of the scheme are satisfied that the member, whatever his age, is terminally ill and likely to die within a year.
Subsection (4B) restricts the amount payable under subsection (4A) where the member is a married person on the date on which the lump sum becomes payable. The balance of the protected rights will then go to provide for survivors' benefits. The amount payable under this subsection is restricted to no more than one half of the member's protected right.

Paragraph 4: use of cash equivalent for annuity

Paragraph 4 removes the prohibition on annuity purchase in section 91(4) of the Pension Schemes Act and gives the member a further option for the use of his cash equivalent transfer value. At present, where a member of a contracted-out money purchase occupational pension scheme exercises his right to take a cash equivalent value of his accrued rights, he may only ask for the cash equivalent transfer value to be transferred to another suitable occupational pension scheme or an appropriate personal pension scheme.

Paragraph 5: transfer values where pension in payment

Subject to limited exceptions, members of occupational pension schemes are prohibited from taking their pensions before they actually retire or leave service. The Inland Revenue proposes to use its discretion so that occupational pension scheme members may receive all or part of their accrued pension while still continuing in pensionable employment. Scheme members taking up this option would lose their right to a cash equivalent transfer value, since section 94(7) of the Pension Schemes Act removes this right if any part of a pension is in payment.
Paragraph 5 amends section 94(7) of the Pension Schemes Act to enable a member to take a transfer of those of his rights which have not come into payment. It also amends section 93(2) to allow regulations to take account of the pension already in payment when calculating a cash equivalent. The definition of pensioner member in Article 121(1) of the Pensions Order is amended to exclude a person with pension rights accruing as an active member of a scheme.

Paragraph 6: information about contracting-out

Paragraph 6 substitutes section 152 of the Pension Schemes Act, to make further provision for the information which may be supplied to pension scheme administrators in the light of changes made to contracting-out arrangements by the Pensions Order. At present, section 152 allows the Department or the Inland Revenue to provide information to pension scheme administrators in connection with any GMP or its calculation. It does not apply to appropriate personal pension schemes (APPs) and specifically excludes money purchase schemes.
As substituted, section 152(1) enables the Department or the Inland Revenue to provide trustees or managers of any occupational pension scheme or APP with the information they are likely to need to enable them to discharge their obligations under the contracting-out arrangements in Part III of the Pension Schemes Act. This will include, for example, the information which scheme administrators need to help them determine the correct level of benefit.
Section 152(2) enables the Department or the Inland Revenue to provide the same information to other persons in categories specified in regulations.

Paragraph 7: trustees of schemes

Paragraph 7 amends section 173 of the Pension Schemes Act by including a power to make regulations to prescribe who is to be treated as a trustee for purposes of provisions of that Act and of the Pensions Order.

Paragraph 8: register of disqualified trustees

Article 29(3) of the Pensions Order specifies the circumstances in which OPRA may disqualify a person from being a trustee of an occupational pension scheme. Article 30(7) of the Pensions Order requires OPRA to keep a register of all persons they disqualify, except automatic disqualifications under Article 29(1). OPRA must, where they receive a request to do so, disclose whether a person named in the request is included in the register as being disqualified in respect of the scheme named in the request. This means that OPRA may only answer "yes" or "no" to the enquiry and cannot volunteer other information which may be relevant. There is no requirement for the register to be open to public inspection.
Paragraph 8 inserts a requirement for OPRA to make the register available for inspection in person by the public. It expands on the requirement for OPRA to respond to requests. OPRA still cannot volunteer information, but, if requested to do so, must disclose whether a person named in the request is disqualified in respect of the scheme specified in the request or in respect of all schemes. It also allows OPRA to publish, in a medium of its choosing, lists of those who appear in the register, and whether they are disqualified from being a trustee of all schemes, some schemes or a single scheme. The full name (including initials and title) and date of birth must be listed if OPRA have a record of them, even if those matters are not recorded in the register itself. The schemes themselves will not be named.
This will provide easier access to the register for those responsible for appointing trustees and will thus reduce the risk of disqualified people being appointed as trustees. A person's name will not be published in respect of any particular disqualification until either time limits for appeals and for applications to review that disqualification are passed, or (where the time limit has not passed) it is unlikely that there will be an appeal or application for review, or where an appeal or review is pending.

Paragraph 9: conditions of payment of surplus to employer

Paragraph 9 makes technical changes to Article 37 of the Pensions Order to allow occupational pension schemes which are making payments from surplus funds to an employer to use their own scheme rules to make increases to pensioner members from the surplus. Occupational pension schemes which have pension funds which are in surplus are required to take steps to reduce the surplus. If the employer wants to take a refund, the scheme must first award increases to pensioner members' pensions. These amendments will allow schemes to avoid recalculating increases which have already been granted under scheme rules. Pensioner members will not suffer any loss as a result of these changes.

Paragraph 10: duties relating to statements of contributions

The trustees or managers of every occupational pension scheme are required to appoint an auditor to obtain audited accounts and a statement about the prompt payment of contributions under the scheme during the preceding scheme year. In an "earmarked scheme" (a money purchase occupational pension scheme (OPS) under which all the benefits provided are secured by one or more contracts of insurance, or by annuity contracts which are specifically allocated to the provision of benefits to, or in respect of, individual members) the auditor is only under a statutory obligation to produce a statement about contributions.
Paragraph 10 substitutes paragraphs (5), (5A) and (5B) for paragraph (5) of Article 41 of the Pensions Order (provision of documents for members). Paragraph (5) provides for regulations to permit earmarked schemes to obtain a statement about contributions from a prescribed person or body as an alternative to the scheme appointing an auditor for this purpose. Paragraph (5A) enables regulations to impose a duty on the trustees or managers of earmarked schemes to provide the person making the statement about contributions with sufficient information to enable him to do so. Paragraph (5B) allows for the imposition of civil penalties by OPRA on any trustee or manager of an earmarked scheme who fails to provide the information which he is required to provide by regulations under paragraph (5A).
Paragraph 10 also adds paragraphs (5) and (6) to Article 86 of the Pensions Order. Paragraph (5) places a duty on the person providing the statement to report to OPRA if contributions have not been paid on time during the course of the scheme year. Paragraph (6) allows OPRA to impose a civil penalty on any person who fails to make a report within the time limit set out in regulations.

Paragraph 11: orders and regulations

Paragraph 11 amends Article 167(3) of the Pensions Order to make regulations made under Article 10(2) of that Order subject to the negative resolution.

Part II: alternative to anti-franking rules

Paragraphs 12 to 15 introduce a minimum benefits test, which replaces the anti-franking provisions set out in sections 83 to 88 of the Pension Schemes Act. The existing anti-franking legislation prohibits occupational pension schemes from funding increases to GMPs from other scheme benefits. This principle is reflected in paragraphs 12 to 15 and the protection is extended to rights built up on or after 6 April 1997. Rights accrued after the end of a period of contracted-out service and late retirement enhancements will no longer be protected. The new provisions prevent schemes from offsetting pre-April 1997 pensions against post-April 1997 pensions. However, schemes will be allowed, as at present, to fund the first increase to the GMP required in the tax year after the one in which it comes into payment, from the scheme pension.

Paragraph 12: cases in which alternative applies

Paragraph 12 provides that the new provisions will apply to all occupational pension schemes which provide GMP rights, subject to exceptions to be set out in regulations. All members who left pensionable service, or died, after the date on which the new provisions come into operation and whose pensions, or survivors' pensions, become payable after that date will have their benefits calculated under the new arrangements. However, the scheme managers or trustees will be able to elect, in a manner to be prescribed, to operate the new rules for members who left pensionable service before those provisions come into operation. Where a scheme elects to calculate early leavers' preserved pensions by reference to the new arrangements, the election must apply to all deferred members, and is a once and for all choice.

Paragraph 13: alternative rules

Paragraph 13 sets out the method of determining whether the level of pension payable to a scheme member under the scheme's own formula meets the statutory minimum. This requires a notional calculation, as follows.

Step 1: Calculate the member's GMP entitlement. For the purpose of this calculation, the amount of GMP will include increases for deferment required under section 11 of the Pension Schemes Act, statutory revaluation under section 12 and increases in payment under section 105.
Step 2: Calculate the amount of GMP at the termination of salary-related pensionable service, exclude any increases required under section 11 or 105 of the Pension Schemes Act, or early leaver revaluation under section 12(3), but include any revaluation under section 12(1). The revaluation of the GMP, for the purposes of this step, is to be calculated up to the tax year before the one in which the member left salary-related pensionable service in the scheme, or the tax year before the one in which he reached state pension age, whichever is the earlier.
Step 3: Determine whether there are any benefits in excess of the GMP which derive from pre-April 1997 rights. This is done by deducting the amount in step 2 from the benefits that are attributable to all the pre-April 1997 rights.
Step 4: Calculate the amount of any such benefits in excess of the GMP. The level of earnings used must not be lower than that used to calculate the post-April 1997 benefits under step 6.
Step 5: Revalue the pre-April 1997 excess over the GMP, in accordance with the rules in Chapter II of Part IV of the Pension Schemes Act.
Step 6: Calculate any benefits accruing in the scheme after 6 April 1997.
Step 7: Revalue post-April 1997 benefits in accordance with the rules on revaluation set out in Chapter II of Part IV of the Pension Schemes Act and index them as required by Article 51 of the Pensions Order.
Step 8: Add together the GMP in step 1, the revalued excess over the GMP in step 5 and the post-April 1997 rights in step 7. This is the minimum pension payable.

Paragraph 14: relationship between alternative rules and other rules

Paragraph 14 provides that the minimum benefits rule does not apply to the calculation of alternatives to short service benefits provided under section 69(2)(b) of the Pension Schemes Act. However, the short service benefit on which the alternative is based must itself be calculated in compliance with the minimum benefits test. The new test overrides scheme rules, where the two conflict. For the purposes of calculating transfer values, schemes will be treated as having these provisions within their rules. The test must be undertaken before the level of a member's pension is adjusted to take account of commutation, forfeiture, suspension, charges, liens or set offs.

Paragraph 15: supplemental

Paragraph 15 contains definitions and allows the Department to modify by order the provisions of paragraphs 10 to 12. Such orders are subject to negative resolution.

Part III: Social Security

Loss of benefit

Clause 53: loss of benefit for breach of community order

A person who is found guilty of certain criminal offences may be the subject of a community sentence imposed by the court. Community sentences include probation orders, community service orders and combination orders.
If the terms of the sentence are not met, the Probation Service will refer the matter to court, which will decide whether the offender has breached the order, and, if so, what further penalty should be imposed for the breach, or whether the order should be revoked and the offender re-sentenced for the original offence.
About 2300 offenders are sentenced to probation orders, community service orders and combination orders each year in Northern Ireland, of whom currently about 900 are returned to court as a result of breach proceedings.
The measures in the Bill will give the Department power to withdraw or reduce benefit where a person fails to comply with a designated community sentence. The sanction will be for a fixed period, to be set in regulations, and will commence after a court has determined that a community sentence has been breached. Similarly, the Department of Higher and Further Education, Training and Employment (DHFETE) will be able to withdraw or reduce a training allowance. Court powers in respect of breach cases will not be affected by these proposals.
In the first instance, the measures will be piloted in separate areas in England and Wales to test the links between social security offices and the Probation Service within a single criminal justice system, and to assess the behavioural impact on offenders. For the duration of the pilots the sanction period will be set at four weeks.
There is no intention to pilot these measures in Northern Ireland and they will not be applied until after careful consideration of the evaluation of the pilots being run in England and Wales.
The Bill provides for these measures to apply to IS, JSA and training allowance. Any extension of these measures to other benefits can only be made by regulations subject to the confirmatory procedure.
Clause 53 provides for benefit to be reduced or withdrawn where an offender is in breach of a community sentence.
Subsection (1) provides that clause 53 applies where a court has determined that an offender has failed without reasonable excuse to comply with the terms of his community sentence and the offender is, or becomes, entitled to a relevant benefit.
Subsection (2) allows regulations to set a prescribed period, which is the time for which benefit will be reduced or withdrawn; initially this will be four weeks.
Subsection (3) provides for IS to be paid at a reduced rate for the prescribed period, rather than be completely withdrawn. It also allows for details of the reduction to be set out in regulations. The intention is that the reduction will be similar to that in JSA cases where hardship is established.
Subsection (4) enables regulations to provide that JSA claimants will be eligible for a reduced rate of benefit during the prescribed period if certain conditions are satisfied.
Subsection (5) provides that payments made under section 1 of the Employment and Training Act (Northern Ireland) 1950 to participants on certain training schemes and employment programmes will not be payable for the prescribed period, except to the prescribed extent.
Subsection (6) provides that where the determination of a court is quashed or otherwise set aside by a decision of a court, or any other court, all payments which would have been made but for the sanction shall be made.
Subsection (7) sets a maximum of 26 weeks for the prescribed period.
Subsection (8) contains definitions.

Clause 54: loss of joint-claim jobseeker's allowance

Clause 54 sets out how the loss of benefit provisions will apply to a couple claiming JSA under the joint-claim provisions.
Schedule 7 to the 1999 Order introduced the concept of joint-claims for JSA by couples. (These provisions have not yet been commenced.) The requirement to make a joint claim will impact initially on couples without children, where one or both partners is in the 18 to 24 age range when the provisions come into operation. It will be extended to cover people born on or after a certain date, so older couples without children will be included as time passes. Under the joint-claim provisions, both members of the couple will have to claim JSA and satisfy labour market conditions.
Subsection (1) provides for subsections (2) and (3) to apply where there is entitlement, or there becomes entitlement, to JSA for a couple on the basis of the joint-claim provisions and the community sentence sanction is applicable to at least one of the couple.
Subsection (2) provides that no joint-claim JSA will be payable where both members of the couple are subject to community sentence sanctions, or where one member is subject to a community sentence sanction and the other is already subject to a sanction pursuant to Article 22A of the Jobseekers (Northern Ireland) Order 1995 (the Jobseekers Order). Article 22A provides for sanctions to apply to members of joint-claim couples where they have unreasonably caused or prolonged their own unemployment.
Subsection (3) provides that where only one member of the couple is subject to a community sentence sanction and the other member is not subject to certain other sanctions, the amount of JSA payable will be reduced to an amount calculated in a prescribed way, and will be paid to the other member of the couple.
Subsection (4) enables regulations to provide for JSA to be payable at a reduced rate or subject to certain conditions where one or each of a couple are subject to certain sanctions.
Subsection (5) prescribes that the reduced amount payable, referred to in subsection (3), will be calculated in the same way as described in Article 22A of the Jobseekers Order.
Subsection (6) provides for clause 53(6) to apply for the purposes of clause 54 in relation to any determination relating to one or both members of a joint-claim couple as it applies for the purposes of clause 53 in relation to a determination relating to the offender.
Subsection (7) sets a maximum length of 26 weeks for "the prescribed period".
Subsection (8) contains definitions.

Clause 55: information provision

Clause 55 deals with the provision of information. It enables regulations to be made which will allow information to be exchanged between the Chief Probation Officer for Northern Ireland, the Department and DHFETE.
Subsection (1) provides that a court will be required to explain to an offender the benefit sanction arising from the consequences of failing to comply with a community sentence.
Subsection (2) enables the Department to make regulations requiring the Chief Probation Officer for Northern Ireland to notify the Department or DHFETE, in a prescribed time and manner of the following:

that a complaint has been made by a member of staff of the Probation Board in relation to a breach of a community sentence;
that a court has made a determination that the offender has failed without reasonable excuse to comply with his community sentence;
information about the offender; and
any circumstances whereby any adjustment or repayment may need to be made, as specified in clauses 53(6) and 54(5).

Subsection (3) imposes an obligation on the Department to notify the offender when a complaint has been made or proceedings commenced that he will suffer a loss of benefit if the court determines that he has breached his order.
Subsection (4) requires this notification to be given as soon as reasonably practicable.
Subsection (5) allows regulations to specify:

how a person listed in subsection (6) uses information relating to community orders or social security benefits;
how people exchange information; and
the purposes for which a person may use the information supplied.

Regulations under this subsection will prescribe how the Probation Service and the benefit office will exchange information and the uses to which the information can be put. The intention is to allow exchange of information on, for example, benefit receipt, identity and address, as well as the making of a complaint and the outcome of the court proceedings, between the Probation Service, the Department, DHFETE and private sector providers. The information exchanged will need to be sufficient to identify the offender and to ensure these provisions are properly implemented. The information will not include details of the original offence in respect of which the original order was made. Information for evaluation, statistical and research purposes will also be included, which may go wider than that required for implementation purposes.
Subsection (6) lists the persons authorised under subsection (5).
Subsection (7) allows regulations to be made covering how exchanged information can be used and passed on.
Subsection (8) contains definitions.

Clause 56: loss of benefit regulations

Clause 56 allows for the making of regulations by the Department.
Subsection (2) enables regulations to specify the time from which any period prescribed in regulations is to run.
Subsection (3) provides for regulations, other than those referred to in subsection (4), to be subject to negative resolution.
Subsection (4) provides for the confirmatory procedure to apply to any regulations specifying:

a reduced amount of IS or income-based JSA to be paid to a claimant who is subject to a sanction for a breach of a community sentence;
a reduced amount of joint-claim JSA to be payable where one member of the couple is subject to a sanction;
the circumstances in which hardship payments are to be made, and the amount of the payment where the sanction applies to a single claimant or to both members of a joint-claim couple;
additional benefits to which the loss of benefit provisions apply; or
additional community orders, breach of which will result in loss of benefit.

Subsection (5) allows regulations to make different provisions for different classes of case, imposing conditions or creating exceptions and to include incidental, consequential and transitional provisions.

Clause 57: appeals relating to loss of benefit

Clause 57 amends the 1998 Order to provide that an appeal lies against a decision to withdraw or reduce benefit under clause 53 or 54.

Investigation powers

Clause 58: investigation powers

Section 104 of the Administration Act sets out provisions relating to the appointment and powers of social security fraud inspectors. Sections 104A and 104B of that Act set out provisions relating to the appointment and powers of Housing Executive fraud inspectors in relation HB. Article 34 of the Jobseekers Order sets out provisions relating to the powers of social security fraud inspectors in relation to JSA.
These powers allow inspectors to elicit and inspect information. For example, the inspector may ask an employer about his employees in order to establish whether there is benefit fraud. The information inspectors request could include information on earnings, tax, NICs and pensions, and, in the case of self-employed persons or landlords, their business records. Inspectors may visit those from whom they require information, or they may write to them.
The legislation governing inspectors' powers was introduced with the National Insurance system. It has been added to and amended over the years and as a result is now piecemeal and inconsistent. This has led to employers, employees and the Data Protection Registrar being unclear as to what inspectors are and are not allowed to do under these powers.
Clause 58 gives effect to Schedule 6, which replaces all the present legislation dealing with inspection and investigation. In the new provisions, the term "inspector" is replaced by "authorised officer".

Paragraph 2: replacement for inspector's powers

Paragraph 2 of Schedule 6 substitutes sections 103A, 103B and 103C for section 104 of the Administration Act.
Section 103A (authorisations for investigators) provides for the Department to authorise officers and sets out the purposes for which an individual may be authorised and the purposes for which authorised officers may use the powers in sections 103B and 103C.
Section 103A(1) allows the Department to authorise officers to exercise powers set out in sections 103B and 103C.
Section 103A(2) sets out the purposes for which authorised officers may exercise the powers in sections 103B and 103C. The purposes are:

ascertaining whether a social security benefit is or was payable in an individual case;
investigating the circumstances of accidents, injuries or diseases giving rise to claims for industrial injuries benefit and other benefits;
ascertaining whether the provisions of the relevant social security legislation have been, are being or are likely to be contravened (in individual cases or more generally); and
preventing, detecting and securing evidence of the commission of criminal offences in relation to the relevant social security legislation (in individual cases or more generally).

The circumstances in which investigators may wish to make general investigations include widespread contravention of the law in a particular workplace.
Section 103A(3) sets out the requirements relating to an authorisation. The Department must have granted the authorisation for the purposes set out in subsection (2) and the person given the authorisation must also fall into one of the categories set out in this subsection. The Department may authorise an official of a government department, an individual employed by the Housing Executive or an individual authorised to carry out functions of the Housing Executive. This enables the Department to make use of personnel and expertise in other organisations and promotes closer working between the government departments and the Housing Executive in anti-fraud work.
Section 103A(4) sets out further requirements regarding authorisations. It:

provides that an individual's authorisation must be contained in a certificate that is given to him as evidence of his entitlement to exercise the powers in sections 103B and 103C;
provides that the authorisation may contain provisions as to the period for which the authorisation is to have effect; and
allows the Department to restrict the powers exercisable by virtue of the authorisation. This allows the prohibition of the use of the powers except for particular purposes and in particular circumstances or in relation to particular benefits or provisions of relevant social security legislation.

Section 103A(5) allows the Department to withdraw an authorisation at any time.
Section 103A(6) concerns circumstances where an individual working for the Housing Executive, or a person administering HB on behalf of the Housing Executive, is granted an authorisation under this section. It:

provides for the Department and the Housing Executive to enter into such arrangements as they see fit with regard to the exercise of these powers; and
allows the Department to make payments to the Housing Executive if it considers it appropriate to do so.

Section 103A(7) provides that the matters on which an individual is authorised to report under section 128A of the Administration Act shall include work under this section carried out by an individual working for the Housing Executive or an individual authorised to carry out functions of the Housing Executive in relation to HB.
Section 103A(8) provides that authorised officers may exercise their powers in relation to persons employed by the Crown and conduct enquiries about persons employed by the Crown and in premises owned or occupied by the Crown.
Section 103B (power to require information) sets out the circumstances in which a person may be required to provide information to the authorised officer.
Section 103B(1) provides that an authorised officer may by written notice request information from a person if he has reasonable grounds for suspecting that:

the person falls into one or more of the categories set out in subsection (2);
the person has, or may have access to, information about a matter which is relevant to at least one of the purposes set out in section 103A(2).

The authorised officer may require that person to provide all the information set out in the notice which is in the person's possession or to which the person has access. It must also be reasonable for the officer to require the information for the pursuit of at least one of the purposes set out in section 103A(2).
Section 103B(2) sets out the persons who may be required to produce information under this section.
Section 103B(3) provides that a person has complied with a request when he has provided the required information within the time and in the format specified in the notice. He will not be deemed to have failed to comply if he does not provide information to which he does not have access or which he does not possess.
Section 103B(4) makes it clear that authorised officers may require the persons in subsection (2) to produce and hand over the information requested, including copies or extracts of it, for example, if an employer of casual labour claims not to keep a record of his staff, the authorised officer could require him to compile one. Authorised officers' requests must be reasonable.
Section 103B(5) protects a person from being required to provide information which may incriminate himself or his spouse.
Section 103C (powers of entry) provides an authorised officer's power to enter premises in order to obtain information for the purposes set out in section 103A(2).
Section 103C(1) provides that the authorised officer may enter premises if they are liable to inspection under this section and where it is reasonable for him to do so in exercise of powers under this section. The authorised officer may be accompanied by anyone he considers necessary to take with him and he may only enter premises at a reasonable time.
Section 103C(2) provides that, once an authorised officer has entered any premises liable to inspection under this section, he may look around those premises and conduct any enquiry which he considers appropriate in his investigation for any of the purposes set out in section 103A(2).
Section 103C(3) provides that, once an authorised officer has entered any premises liable to inspection under this section, he may question anyone whom he finds on the premises, require them to provide documents that he may reasonably require for the purposes set out in section 103A(2) and take possession of, and remove, those documents. He may require the person to produce, hand over and create documents or copies and extracts of documents. Under this section authorised officers also have power to make their own copies of documents. Anything done by authorised officers once they enter premises must be reasonable.
Section 103C(4) sets out the premises liable to inspection under this section.
Section 103C(5) provides that where the authorised officer seeks to enter any premises under this section he must, if requested to do so, produce the certificate containing his authorisation.
Section 103C(6) protects a person from being required to provide information which might incriminate him or his spouse.
In sections 103B and 103C a notice is to be taken to be in writing where it is transmitted by electronic means, such as fax or e-mail, provided that the notice is received by the recipient in a form which is legible and capable of being recorded for future reference. The term "document" includes anything in which information is recorded in electronic or other format.

Paragraph 3: exercise of powers on behalf of the Housing Executive

Paragraph 3 substitutes section 104A for sections 104A and 104B.
Section 104A (authorisations by the Housing Executive) sets out the purposes for which persons authorised by the Housing Executive may exercise the powers contained in sections 103B and 103C.
Section 104A(1) provides that a person who has the authorisation of the Housing Executive may, subject to subsection (7), exercise any of the powers set out in sections 103B and 103C for the purposes set out in subsection (2).
Section 104A(2) sets out the purposes for which a person authorised by the Housing Executive may use the powers set out in sections 103B and 103C. The purposes are:

ascertaining whether or not HB is or was payable in a particular case;
ascertaining whether the provisions of the relevant social security legislation relating to HB have been, are being or are likely to be contravened (in cases involving particular individuals, as well as more generally); and
preventing, detecting and securing evidence of the commission of criminal offences in relation to HB (in cases involving particular individuals, as well as more generally).

Investigators may wish to investigate whether there is widespread contravention of the law in a particular workplace. They may ask for a list of all employees, where an employer has a history of colluding with his staff in order that they can commit benefit fraud. Such a list would be cross-referenced against benefit records.
Section 104A(3) sets out the requirements for the Housing Executive's authorisation. The Housing Executive must have granted the individual an authorisation for the purposes set out in subsection (2). The person given the authorisation must fall into one of the categories set out in that subsection.
Section 104A(4) provides that the provisions in section 103A(4) also apply to Housing Executive authorisations. An authorisation must be contained in a certificate and the Housing Executive may restrict the extent of the authorisation.
Section 104A(5) allows the Housing Executive or the Department to withdraw an authorisation at any time.
Section 104A(6) provides that the Housing Executive has a duty to comply with directions given by the Department. These directions relate to:

whether or not the Housing Executive may make any authorisations for the purposes of subsection (2);
the period for which authorisations granted by the Housing Executive shall have effect;
the number of authorisations the Housing Executive may make; and
how the Housing Executive should use the power to restrict authorisations in section 103A(4)(c).

Section 104A(7) provides that officers authorised under this section may use the powers in sections 103B and 103C, with the following differences:

that the purposes for which these powers may be used are those set out in subsection (2) of this section and not section 103A(2); and
that the powers may be used in relation to the relevant social security legislation only in so far as it relates to HB.

Paragraphs 4 to 9: consequential amendments

Paragraph 4 makes a consequential amendment to section 105 (delay, obstruction, etc. of inspector).
Paragraphs 5 and 6 make consequential amendments to sections 105A (dishonest representations for obtaining benefit, etc.) and 106 (false representations for obtaining benefit, etc.).
Paragraph 7 makes consequential amendments to section 107 (breach of regulations).
Paragraph 8 inserts section 115CA (interpretation of Part VI) into the Administration Act.
Section 115CA(1) defines "relevant social security legislation".
Section 115CA(2) defines "authorised officer".
Section 115CA(3) sets out what is meant by references to "document" and what is meant by notices being given in writing.
Section 115CA(4) sets out the meaning of "premises". It makes clear that premises include moveable structures, vehicles, offshore installations and places of any other description, whether or not they are occupied as land and that anyone present is regarded as an occupier.
Section 115CA(5) defines "benefit", "benefit offence" and "compensation payment".
Section 115CA(6) makes clear that where the Housing Executive has contracted out some of its HB work, those working for the contractor or a sub-contractor can be authorised to act in accordance with the provisions of Part VI of the Administration Act.
Paragraph 9 makes a consequential amendment to Schedule 7 to the Administration Act.

Housing benefit

Clause 59: housing benefit: revisions and appeals

HB is an income-related social security benefit which is administered by the Housing Executive and the Department of Finance and Personnel (DFP). Under current legislation the Housing Executive or DFP may review a decision in relation to a HB claim at any time if there has been a change of circumstances, or the Housing Executive or DFP considers that the decision was made on the basis of an error of fact or law. Where a person wishes to dispute a decision of the Housing Executive or DFP on a HB claim, regulations provide for an initial, internal review by the Housing Executive or DFP, with a right to a further review by a Review Board. The decision of a Review Board may be challenged by way of judicial review.
The measures in the Bill will align the arrangements for decision-making in HB with those introduced last year in relation to other social security benefits. They provide clearly defined procedures for changing decisions on benefit entitlement and other matters, and place greater emphasis on claimants' own responsibilities for exercising their rights promptly and ensuring that information held on their claims is accurate. They also introduce a right of appeal to an appeal tribunal against decisions on HB.
Clause 59 gives effect to Schedule 7, which sets out the detail of the proposed new provisions for decision-making and appeals in relation to HB. The majority of the provisions mirror those contained in the 1998 Order in relation to other social security benefits.

Paragraph 1: introductory

Paragraph 1 defines "relevant authority" and "relevant decision" for the purposes of the Schedule. It also provides that references to a relevant decision do not include a decision under paragraph 3 to revise a relevant decision.
Sub-paragraph (1) provides that "relevant authority" means the Housing Executive or DFP.
Sub-paragraph (2) provides that "relevant decision" for the purposes of Schedule 7 means:

a decision of a relevant authority on a claim for HB:
a decision under paragraph 4 which supersedes a decision of a relevant authority or a decision of an appeal tribunal or a Commissioner.

Paragraph 2: decisions on claims for benefit

Paragraph 2 provides that, once a decision has been made on a claim for HB, that claim ceases to exist. This means that if a person's claim fails, but his circumstances subsequently change and he again wishes to apply for HB, he must make a fresh claim.

Paragraph 3: revision of decisions

Paragraph 3 provides powers for a relevant authority to revise a HB decision, whether as originally made, or as superseded under paragraph 4, either on application or on its own initiative. Regulations will prescribe the cases, circumstances and period within which a decision can be revised and for the date from which a decision can be revised. The paragraph also provides for the date from which the decision takes effect; a revised decision will normally take effect from the same date as the decision being revised, with regulations varying that date in certain circumstances. It further provides for the lapsing of appeals where the decision appealed against is lapsed.
Sub-paragraph (1) provides for the relevant authority to revise any HB decision, either on application by a person affected, or on its own initiative. It enables regulations to prescribe the period within which, and the cases or circumstances in which, a decision can be revised. In line with the regulations applying to other social security benefits, it is intended that a person will normally have one month in which to apply for revision of a HB decision. Regulations will provide for an extension of the time limit in special circumstances, with an overall time limit of 13 months.
Sub-paragraph (2) provides that when revising a decision the relevant authority need only consider the particular issue raised by the application for revision, or, if acting on its own initiative, which caused it to consider revising the decision.
Sub-paragraph (3) provides that a revision will take effect from the day on which the original decision took effect, unless regulations under sub-paragraph (4) provide otherwise, or if the revision was made after a decision in another case had held that a decision was wrong in law.
Sub-paragraph (4) allows for regulations to prescribe cases or circumstances in which the revision will take effect from a date other than the date of the original decision. An example would be where the original decision took effect from the wrong date.
Sub-paragraph (5) provides that the period within which an application for appeal may be made runs from the date on which the revision was made.
Sub-paragraph (6) provides that, where an appeal has been lodged against a decision which is subsequently revised, the appeal will lapse, except in circumstances set out in regulations. It is intended that regulations will provide that an appeal will continue where the revised decision is not advantageous to the claimant.

Paragraph 4: decisions superseding earlier decisions

Paragraph 4 allows a relevant authority to supersede its decision (whether as originally made or as revised under paragraph 3), or, in prescribed circumstances, a decision made by an appeal tribunal or a Commissioner. A decision which superseded an earlier decision will not normally take effect from the date of the decision being superseded. The relevant authority will supersede a decision in cases where a revision under paragraph 3 is inappropriate (for example, because there had been a change of circumstances, or in a case where a person did not apply for a revision within one month of the disputed decision). A new decision may be made either in response to an application or on the relevant authority's own initiative.
Sub-paragraph (1) provides for a relevant authority to supersede its own decisions, or a decision of an appeal tribunal or a Commissioner, both on application or on its own initiative.
Sub-paragraph (2) provides that in superseding a decision the relevant authority need only consider the particular issue raised by the application for superseding or, if acting on its own initiative, which caused it to consider superseding the decision.
Sub-paragraph (3) allows regulations to prescribe cases, circumstances and procedures to enable decisions to be superseded. In line with regulations applying to other social security benefits, it is proposed that, unless a decision falls to be revised, it will be superseded where it is wrong in fact or in law. A decision will also be superseded where there has been a relevant change of circumstances.
Sub-paragraph (4) provides that, generally, a supersession will take effect from the day on which it is made or, where applicable, the day on which the application was made, unless regulations under sub-paragraph (5) provide otherwise, or if the revision was made after a decision in another case had held that an authority's decision was wrong in law.
Sub-paragraph (5) allows regulations to specify the cases or circumstances in which a decision to supersede an earlier decision will take effect from a date other than the date on which the decision is made or an application is made. In line with other social security benefits, where a decision is superseded by a decision which is to the claimant's advantage because of a change of circumstances, it is intended that regulations will provide that the new decision may take effect from the date of change where the change is notified within one month. Otherwise the new decision will take effect from the date the change is notified, or the date of the decision, where there is no notification. Where a new decision was disadvantageous, it will always take effect from the date of change.
Sub-paragraph (6) defines "appropriate relevant authority" for the purposes of paragraph 4 as the authority which made the decision being superseded or appealed.
It is also intended that regulations under sub-paragraphs (3) and (5) will include provision for the relevant authority to supersede a decision of an appeal tribunal or a Commissioner where that decision was made in ignorance of, or based on a mistake as to, a material fact, and where the decision of the tribunal was based on a determination of a Commissioner or court in another case which has subsequently been overturned by a higher court.

Paragraph 5: use of experts by relevant authorities

Paragraph 5 provides that a relevant authority may have the assistance of one or more experts, where it appears to it that a question of fact in relation to a decision requires special expertise. This provision will enable the Housing Executive or DFP to seek advice from, for example, an accountant, where there is an issue surrounding income from self-employment.

Paragraph 6:appeal to appeal tribunal

Sub-paragraph (1) of paragraph 6 sets out those decisions which may be appealed, namely relevant authority decisions (whether as originally made, or as revised under paragraph 3 or superseded under paragraph 4), on claims for, or awards of, HB and other prescribed decisions (subject to the provisions of sub-paragraph (2)).
Sub-paragraph (2) provides that no appeal lies against:

a decision terminating or reducing an award of HB made in consequence of a decision made under regulations under section 2A of the Administration Act (work-focused interviews);
a decision determined by the rate of benefit provided for by law (for example the rate of personal allowance used in the calculation of benefit entitlement, which is set annually by the Department); and
any other decision prescribed in regulations. (It is proposed that the regulations will, in line with other benefits, cover decisions which may broadly be termed "administrative", for example, the method of paying benefit).

Sub-paragraph (3) provides that a person affected by a relevant authority decision to which paragraph 6 applies has a right of appeal to an appeal tribunal.
Sub-paragraph (4) provides that sub-paragraph (3) shall not confer a right of appeal against a prescribed decision, or against determinations which are embodied in the final decision.
Sub-paragraph (5) clarifies the nature and limitations of the regulation-making power in sub-paragraph (4). It is explicit that the regulations shall not include any decision which relates to the conditions of entitlement to HB for which a claim has been validly made.
Sub-paragraph (6) provides that, where there is a decision that there is an overpayment of HB which is recoverable, any person from whom the relevant authority decides the overpayment is recoverable shall have a right of appeal to an appeal tribunal.
Sub-paragraph (7) provides for a person with a right of appeal to be given notice of the decision and right of appeal, as prescribed in regulations.
Sub-paragraph (8) provides for regulations to set out the manner and time for making appeals. It is intended that the regulations will provide for a time limit of one month from the date of the decision within which to ask for a revision of a decision or to bring an appeal. If a person asks for a revision, he will have a further month from the date on which the relevant authority notifies him of its reconsideration in which to bring an appeal. These time limits will bring HB into line with other social security benefits.
Sub-paragraph (9) provides that an appeal tribunal need not consider issues which are not raised on the appeal, and shall not take account of any changes of circumstances which have occurred since the appealed decision was made.

Paragraph 7: redetermination, etc. of appeals by tribunal

Paragraph 7 provides for cases to be redetermined by the same tribunal or determined by a differently constituted tribunal where the tribunal has made an error of law or where the parties to the appeal agree that the tribunal has made an error of law.
Sub-paragraph (1) provides for cases in which an appeal tribunal can redetermine an appeal as being those where an application for leave to appeal to a Commissioner has been made.
Sub-paragraph (2) allows the person who constituted, or was the chairman of, the tribunal when the decision was given (or, in prescribed circumstances, such other person as may be prescribed), to set aside the decision under appeal if he considers that there was an error of law, and to refer the case for redetermination by the same, or a differently constituted, tribunal.
Sub-paragraph (3) requires that a decision be set aside and redetermined by a differently constituted tribunal where each of the principal parties to the appeal expresses the view that there was an error of law.
Sub-paragraph (4) defines the principal parties to an appeal, for the purposes of sub-paragraph (3) and for paragraph 8, as:

the Department, where it is the applicant for leave to appeal from the decision of the appeal tribunal to the Commissioner, or in circumstances prescribed in regulations;
the relevant authority against whose decision the appeal to the appeal tribunal was brought;
the person affected by the decision, or by the tribunal's decision on appeal.

It is intended that regulations under sub-paragraph (4)(a) will allow the Department to bring to the attention of an appeal tribunal any case where, although it is not the applicant for leave to appeal, it believes that there may have been an error of law.

Paragraph 8: appeal from tribunal to Commissioner

Paragraph 8 sets out the powers of a Commissioner and who may appeal to a Commissioner, on what grounds, when and how. This paragraph mirrors provision in Article 15 of the 1998 Order. It is intended that the Social Security Commissioners (Procedure) Regulations (Northern Ireland) 1999, made under that Article, will be amended to take account of HB.
Sub-paragraph (1) provides that there is a right of appeal from any decision of an appeal tribunal to a Commissioner on the ground that the decision of the tribunal was erroneous in point of law.
Sub-paragraph (2) specifies that the persons who have a right of appeal to a Commissioner are the Department, the relevant authority against whose decision the appeal to the appeal tribunal was brought and a person affected by that decision.
Sub-paragraph (3) provides that a Commissioner may set aside a decision of an appeal tribunal and refer the case to another tribunal for a fresh determination, provided all the principal parties to the appeal express the view that the original decision was erroneous in point of law.
Sub-paragraph (4) provides for a Commissioner to set aside a decision of an appeal tribunal where he holds that the decision appealed against was erroneous in point of law.
Sub-paragraph (5) enables a Commissioner, where he has set aside the decision of an appeal tribunal, to give the decision he considers the tribunal should have given, if he can do so without making fresh or further findings of fact, to make such findings of fact and, in the light of them to give the decision he considers appropriate or to refer the case to a tribunal with directions for its determination.
Sub-paragraph (6) provides that references made under sub-paragraphs (3) or (5) shall be to an appeal tribunal differently constituted from the tribunal which gave the original decision, unless otherwise directed by the Commissioner.
Sub-paragraph (7) provides for leave to appeal to be given by the person who constituted, or was the chairman of, the tribunal when the decision was given or, in prescribed circumstances, by another person prescribed in regulations or by a Commissioner.
Sub-paragraph (8) provides for regulations to make provision as to the manner and time within which appeals and applications for leave to appeal should be made.

Paragraph 9: appeal from Commissioner on point of law

Paragraph 9 sets out provisions in respect of appeals to the Court of Appeal from the decision of a Commissioner, what may be appealed, when and how. This paragraph mirrors provisions of section 22 of the Administration Act. It is intended that the Social Security Commissioners (Procedure) Regulations (Northern Ireland) 1999 will be amended to take account of HB.
Sub-paragraph (1) allows an appeal on a point of law to the Court of Appeal from any decision of a Commissioner.
Sub-paragraph (2) provides that appeals can only be made with the leave of a Commissioner, either the Commissioner who gave the decision or, in prescribed cases, by another Commissioner, or if the Commissioner refuses leave, with the leave of the Court of Appeal.
Sub-paragraph (3) specifies the persons who may apply for leave to appeal, namely a person who was entitled to appeal to the Commissioner, any other person who was a party to the proceedings, and any other person authorised by regulations to apply for leave. It also allows for regulations to make provision in relation to manner, time limit and procedure as to applications for leave to appeal.

Paragraph 10: procedure

Paragraph 10 provides for regulations to set out procedures relevant for the purposes of Schedule 7.
Sub-paragraph (1) enables provision to be made by regulations as to procedural matters for HB decision-making and appeals. These will mirror regulations made under Schedule 4 to the 1998 Order.
Sub-paragraph (2) provides that the procedure regulations shall provide for the hearing to be in public, unless the Commissioner, for special reasons, otherwise directs.
Sub-paragraph (3) provides that the power to prescribe procedure includes power to provide for appellants to be represented at hearings by another person, irrespective of whether that person has professional qualifications and for the Department to have the right to be heard in any proceedings before a Commissioner to which it is not already a party.
Sub-paragraph (4) provides that, if a matter before a Commissioner involves a question of special difficulty, the Commissioner may direct that he should have expert assistance from one or more persons with relevant knowledge or experience.
Sub-paragraph (5) provides that the Chief Commissioner, or if he is unable to act, another Commissioner who has been nominated to act in his place, can direct that an appeal, or an application for leave to appeal, which involves a question of law of special difficulty be heard by a tribunal of two or more Commissioners.
Sub-paragraph (6) provides that, if the decision of a tribunal of Commissioners is not unanimous, the decision of the majority shall be the decision of the tribunal. In a case where the votes are equally divided, the presiding Commissioner shall have a casting vote.
Sub-paragraph (7) ensures that the reference in paragraph 8(7)(b) to applications for leave to appeal being determined by a Commissioner may be construed as a reference to a tribunal of Commissioners, where appropriate.
Sub-paragraph (8) provides that Part I of the Arbitration Act 1996 (which relates to arbitration pursuant to arbitration agreements) shall not apply to any proceedings under Schedule 7.

Paragraph 11: finality of decisions

Paragraph 11 provides that any decision made under the preceding paragraphs of Schedule 7 is final unless it is revised, superseded or appealed.

Paragraph 12: matters arising as respects decisions

Paragraph 12 provides for regulations in respect of matters arising while an appeal is pending and those arising out of a revision of, or an appeal from, a decision. It is intended that the regulations will allow an interim decision pending a decision by the relevant authority, an appeal tribunal or a Commissioner which relates to a claim for entitlement to HB. The regulations will also provide for matters arising out of the revision of such a decision.

Paragraph 13: suspension in prescribed circumstances

Paragraph 13 provides for regulations to be made for suspending payments of HB.
Sub-paragraph (1) enables regulations to set out the circumstances in which payments of HB may be wholly or partially suspended and to prescribe the circumstances in which any or all of the suspended payments are to be restored.
Sub-paragraph (2) provides that the regulations may, in particular, cover cases:

where there is a doubt as to whether the conditions of entitlement to benefit are met;
where there is a question as to whether a decision may need to be revised or superseded;
an appeal against a decision of an appeal tribunal, a Commissioner or a court is pending; or
the relevant authority considers that an award of HB might need to be revised or superseded after a decision in a different case is given on appeal by a Commissioner or the court.

Sub-paragraph (3) defines "pending" for the purposes of sub-paragraph (2).
Sub-paragraph (4) clarifies that the reference in sub-paragraph (2)(d) to a different case includes a case involving a different relevant authority, but does not include a case relating to a benefit other than HB.

Paragraph 14: suspension for failure to furnish information, etc.

Paragraph 14 provides a regulation-making power so that payments of benefit may be suspended where a person fails to provide information needed to determine whether a decision on a claim for benefit should be revised or superseded.
Sub-paragraph (1) provides that the power to suspend applies to failure to comply with information requirements.
Sub-paragraph (2) enables regulations to set out the circumstances in which payments of HB may be wholly or partially suspended and prescribe the circumstances in which any or all of the suspended payments are to be made. It is intended that, in line with other social security benefits, regulations will provide that benefit may be suspended in whole or in part if a person fails to provide the requested information within a month.
Sub-paragraph (3) defines "information requirement" for the purposes of paragraphs 14 and 15, as being a requirement under regulations made under section 5(1)(hh) of the Administration Act, with respect to the provision of information and evidence needed to determine whether a decision on an award of HB should be revised or superseded.

Paragraph 15: termination in cases of a failure to furnish information, etc.

Paragraph 15 provides for regulations enabling a person's entitlement to benefit to be terminated when payment has been suspended in accordance with regulations under paragraph 13 and the person has subsequently failed to comply with an information requirement or, in the case of paragraph 14, the person has persisted in his failure to comply with an information requirement.
In line with other social security benefits, in the case of suspension under paragraph 14, regulations will provide that HB will be suspended until the claimant provides the requested information, up to a maximum period of one month. If at the end of a month the information is not provided then entitlement to benefit will be terminated from the date suspension commenced. In the case of a suspension under paragraph 13, regulations will provide a maximum period of one month following the notification of the information requirement. The one month period may be extended if special reasons apply.

Paragraph 16: decisions involving issues that arise on appeal in other cases

Paragraph 16 makes provision for cases which turn on a point of law which is to be considered by a court on appeal in another case. The relevant authority may defer making a decision in such cases or make it in prescribed cases on such basis as may be prescribed.
Sub-paragraph (1) provides that paragraph 16 applies where a decision falls to be made (including a decision revising or superseding an earlier decision) which turns on an issue of law which is challenged in another case ("the lead case") through the court.
Sub-paragraph (2) provides that the relevant authority need not make a decision where it considers that the outcome of the lead case might mean that there would be no entitlement to benefit.
Sub-paragraph (3) provides that if the relevant authority considers it possible that the outcome of the lead case might affect the decision in the case in some other way, it need not make the decision while the appeal is pending, except in prescribed cases or circumstances, or may make the decision on such basis as may be prescribed.
Sub-paragraph (4) requires the relevant authority, where it has made a decision on the prescribed basis, to revise that decision, where appropriate, once the lead case is finally decided.
Sub-paragraph (5) defines when an appeal is pending in a lead case for the purposes of paragraph 16. Regulations made under sub-paragraph (5) will cover cases where an appeal has been brought, or an application for leave to appeal has not been made, but the time limit for doing so has not expired. This will cover the situation where the relevant authority has received a decision of an appeal tribunal or a Commissioner and is considering whether it should seek leave to appeal against it.
Sub-paragraph (6) clarifies that a reference to an appeal against a decision or to an application for leave to appeal against a decision includes a reference for judicial review under section 18 of the Judicature (Northern Ireland) Act 1978 or for leave to apply for judicial review.
Sub-paragraph (7) clarifies that the reference to another case in sub-paragraph (1) includes a case involving a decision made by a different relevant authority, but does not include a case relating to a benefit other than housing benefit.

Paragraph 17: appeals involving issues that arise on appeal in other cases

Paragraph 17 deals with appeals which turn on an issue of law which is being challenged in another case ("the lead case").
Sub-paragraph (1) provides that paragraph 17 applies where an appeal is made to an appeal tribunal or Commissioner and that appeal turns on an issue of law which is being challenged in the lead case through the court.
Sub-paragraph (2) provides that the relevant authority may serve notice requiring the appeal tribunal or, as the case may be, the Commissioner, to refer the appeal to it, or to deal with the appeal in accordance with sub-paragraph (4).
Sub-paragraph (3) provides that the relevant authority shall, if and as appropriate, revise or supersede the decision in a case referred to it under sub-paragraph (2)(a), in accordance with the decision in the lead case, once that case is finally decided.
Sub-paragraph (4) provides that, where the relevant authority issues a notice under sub-paragraph (2)(b), the appeal tribunal or Commissioner shall either stay the appeal, or having regard to the interests of the appellant, decide it as if the lead case were decided in the way most unfavourable to the appellant. A decision in the latter case would allow any benefit which would not be affected by the decision in the lead case to be paid.
Sub-paragraph (5) requires the relevant authority, if appropriate, to supersede any decision of the appeal tribunal or Commissioner under sub-paragraph (4)(b), once the lead case is finally decided.
Sub-paragraph (6) sets out when an appeal is pending in a lead case for the purposes of paragraph 17. Regulations to be made under this sub-paragraph will cover cases where an appeal has not been brought, or an application for leave to appeal has not been made, but the time limit for doing so has not expired. Regulations will cover the situation where the relevant authority has received a decision of a Commissioner or court and is considering whether there appears to be an error of law in the decision and whether it should seek leave to appeal against it.
Sub-paragraph (7) provides that the reference to an appeal to a Commissioner in sub-paragraph (1)(a) includes a reference to an application for leave to appeal to a Commissioner. It also clarifies that the reference in sub-paragraph (1)(b) to a different case includes a reference to a case involving a different relevant authority, but does not include a case relating to a benefit other than HB. It further provides that the reference to an appeal or an application for leave to appeal in sub-paragraph (6) includes an application for judicial review to the Court of Appeal
Sub-paragraph (8) defines "appellant" for the purposes of sub-paragraph (4).
Sub-paragraph (9) enables regulations to make provision supplementing paragraph 17.

Paragraph 18: restrictions on entitlement to benefit in certain cases of error

Paragraph 18 provides that, where the outcome of an appeal overturns an understanding of the law previously applied, with the effect that decisions in other cases are wrong, restrictions may be imposed on arrears of benefit which would otherwise fall to be paid.
Sub-paragraph (1) identifies those cases where entitlement to benefit is restricted because an understanding of the law has been overturned by a decision on appeal ("a relevant determination").
Sub-paragraph (2) identifies cases to which sub-paragraph (1) does not apply.
Sub-paragraph (3) provides that cases identified in accordance with sub-paragraph (1) are to be decided, so far as the period before the appeal decision is concerned, as though the relevant determination had not overturned the earlier understanding of the law.
Sub-paragraph (4) makes clear that appeal decisions of the courts, which determine that provisions in statutory rules are themselves unlawful, are relevant determinations for the purpose of sub-paragraph (1)(a). That is to say, even though a provision in a statutory rule is found to be ineffective by a decision on appeal, cases will be determined on the basis that it is effective so far as the period before that determination is concerned.
Sub-paragraph (5) provides that the restriction on the payment of arrears applies regardless of whether a claim or application for revision or supersession is made before or after the date of the determination of the appeal in the lead case.
Sub-paragraph (6) defines "court".
Sub-paragraph (7) clarifies that references to entitlement to benefit also cover entitlement to any increase in the rate of benefit and also that entitlement includes new, revised, increased benefit, or rates of benefit.
Sub-paragraphs (8) and (9) allow regulations to be made setting out how the date of the relevant determination is to be determined.

Paragraph 19: correction of errors and setting aside of decisions

Paragraph 19 permits regulations to define the circumstances in which accidental errors in decisions may be corrected and for the setting aside of decisions in cases where there is procedural irregularity.
Sub-paragraph (1)(a) provides for regulations to be made for the correction of accidental errors in a decision or record of a decision. Thus "slips of the pen", such as incorrectly written dates, can be corrected. Sub-paragraph (1)(b) enables regulations to provide for an appeal tribunal or Commissioner to set aside a decision and rehear a case in the interests of justice if a procedural error has occurred in the service or receipt of documents, or if a party to the proceedings was not present at the hearing.
Sub-paragraph (2) provides that any power exercised under this provision shall not derogate from any power to correct or set aside other decisions.
Sub-paragraph (3) defines "relevant provision".

Paragraph 20: regulations

Paragraph 20 contains provisions about subordinate legislation. In particular, it provides that regulations made under paragraph 6(2)(c) or (4) shall be subject to the confirmatory procedure and that regulations made by the Lord Chancellor shall be subject to annulment in pursuance of a resolution of either House of Parliament in the same manner as a statutory instrument.

Paragraph 21: consequential amendment of the Administration Act

Paragraph 21 amends section 5 of the Administration Act to provide for regulations with respect to the provision of information and evidence needed to determine whether a decision on an award of HB should be revised or superseded.

Paragraph 22: consequential amendments of the 1998 Order

Paragraph 22 provides for Articles 34(4) and (5) and 35 of the 1998 Order to cease to have effect. It also amends Schedule 1 to that Order to extend the payment of travelling and other expenses to people attending appeal tribunals and hearings before a Commissioner under the provisions of Schedule 7.

Paragraph 23: interpretation

Paragraph 23 defines terms used in Schedule 7 and provides for regulations to specify the circumstances in which a person is, or is not, to be considered as a person who is affected by any decision of a relevant authority. It also clarifies that decisions of persons authorised to carry out functions of a relevant authority are to be treated as decisions of that authority for the purposes of Schedule 7.

Clause 60: discretionary financial assistance with housing

Under these provisions relevant authorities will have discretion to provide people entitled to HB with additional financial assistance with their housing costs. These payments will help alleviate exceptional hardship which people may incur when their housing costs are above those met by HB.
The provisions will enable discretionary housing payments to be made by the relevant authority and paid in addition to benefit entitlement. The relevant authority will decide whether to make payment and the level of each payment will be based on the circumstances of each individual case. The total amount the relevant authority will be able to spend on the discretionary scheme in any one year will be part of the framework of the scheme determined by the Department, but the decision to pay in any particular case will be for the relevant authority. People requesting help from the discretionary scheme will be able to ask the relevant authority to review its decision if, for whatever reason, they are dissatisfied.
Subsection (1) allows regulations to confer power on the relevant authority to consider making payments to people entitled to HB who appear to the authority to need further financial assistance to meet their housing costs. It is intended that regulations will set out the information which will be required by the relevant authority to enable it to make decisions and provide for people to ask for decisions to be reviewed.
Subsection (2) allows for regulations to set out the conditions and circumstances under which these payments may be considered.

Paragraph (a) allows regulations to set out the circumstances under which discretionary housing payments may be made.
Paragraph (b) enables regulations to provide that decisions about whether to help particular persons, the amount of the payments and the period for which the help should be given, will be for the relevant authority.
Paragraph (c) enables regulations to impose a limit on the amount of the discretionary housing payment which may be made in any particular case. It is intended that the regulations will specify that the additional financial help given to any person should not exceed the eligible rent (contractual rent less ineligible charges).
Paragraph (d) enables regulations to be made to restrict the period for which discretionary housing payments may be made. It is intended that the payments will be considered for the same period as help with housing costs through the HB scheme.
Paragraph (e) enables regulations to set out the way in which people should apply for discretionary housing payments and the way in which the relevant authority should deal with those claims. The regulations may, for example, require the relevant authority to deal with the claims timeously and to notify its decisions within a set time.
Paragraph (f) enables regulations to be made to enable the relevant authority to gather such relevant information from the people as is reasonably required to enable it to make a decision.
Paragraph (g) enables regulations to be made in respect of the circumstances in which discretionary housing payments could cease, for example where the person is no longer entitled to HB, and will enable the recovery of overpayments.
Paragraph (h) enables regulations to be made to provide for the relevant authority to review its decisions in particular circumstances.

Subsection (3) provides for regulations made under this section to be subject to negative resolution.
Subsection (4) provides supplementary incidental powers to be used when making regulations under the provisions of this section.
Subsection (5) enables regulations to be made for different areas.
Subsection (6) contains definitions.

Clause 61: grants towards cost of discretionary housing payments

Clause 61 makes financial provision in respect of the discretionary housing payment scheme. It provides for the receipt and distribution of money by the Department to the Housing Executive in order to enable it to make discretionary housing payments.
Subsection (1) makes provision for the Housing Executive to be given Departmental funding towards discretionary housing payments and administrative expenditure.
Subsection (2) makes provision in respect of the amount and manner of payment of funding for discretionary housing payments by applying the provisions of section 127(2) and (3) of the Administration Act.
Subsection (3) defines "discretionary housing payment".

Clause 62: recovery of housing benefit

For tenants in the private rented sector, HB may be paid direct to the landlord or his managing agent in prescribed circumstances.
Tenants in receipt of HB are required to notify the Housing Executive of any change in their circumstances which could affect their entitlement. Landlords and agents receiving benefit direct are also required to notify the Housing Executive of any change in a tenant's circumstances which they might reasonably be expected to know could affect that tenant's entitlement to HB.
The Housing Executive often faces problems recovering HB debts if tenants simply disappear. The Housing Benefit (General) Regulations (Northern Ireland) 1987, therefore, allow the Housing Executive to recover from either the tenant or the landlord or agent (as the person to whom benefit was paid). The result is that in cases of tenant fraud the Housing Executive may, and often does, recover the debt from the landlord or his agent. Although such a recovery re-opens the tenant's rental liability to the landlord, in practice it means that the fraudulent tenant often suffers no consequence of his actions. This can act as a disincentive to landlords and agents to report suspected fraud, as they know that they could find themselves repaying any overpayment.
Clause 62 substitutes section 73(3) of the Administration Act. As substituted:

subsection (3)(a) provides that an overpayment is recoverable from the person to whom the benefit was paid, but allows for exceptions to this to be prescribed in regulations; and
subsection (3)(b) provides that in addition to the overpayment being recovered from the person to whom the benefit was paid, it may also be recovered from such other person as is prescribed in regulations.

Child Benefit

Clause 63: child benefit disregards

CB is only payable to a person who is responsible for a child in any given week. Section 139 of the Contributions and Benefits Act sets out the meaning of "person responsible for a child". One of the necessary conditions is that the child is living with that person in that week except where the absence can be disregarded. Clause 63 amends section 139(3)(c) to ensure that CB is payable, in prescribed circumstances, where a child is in residential accommodation under Articles 15 or 36 of the Health and Personal Social Services (Northern Ireland) Order 1972.

Social Security Advisory Committee

Clause 64: Social Security Advisory Committee

Clause 64 amends section 149(5) of the Administration Act by inserting paragraph (af) into the definition of "the relevant enactments". Paragraph (af) adds certain provisions of the Bill to the list of provisions on which the Department is required to consult with the Social Security Advisory Committee before making regulations. The requirement to consult does not apply where the regulations correspond to regulations made by the Secretary of State for Social Security in relation to Great Britain.

Part IV: miscellaneous and supplemental

Miscellaneous

Clause 65: tests for determining paternity

Part III of the Family Law Reform (Northern Ireland) Order 1977 enables the court to direct the use of blood tests in order to resolve a dispute about paternity which has arisen in the course of civil proceedings.
Regulations under that Order provide that samples may only be taken by a registered medical practitioner, or someone who has been appointed by the Lord Chancellor as a tester under that Order. They also set out the procedures for the taking of samples, set conditions for the secure dispatch of samples to a tester, and the fees payable to samplers.
Clause 65 replaces the present system of approving individual paternity testers by one based on the accreditation of laboratories. This will allow the Lord Chancellor to regulate laboratory conditions and set minimum qualifications for individual testers. The clause also makes an amendment to address an issue raised by a recent High Court judgement (re O and re J(Minors) (Blood Tests: Constraint) [2000] 2 W.L.R. 1284). Article 9(3) of that Order provides that a blood sample may be taken from a person under the age of 16 if the person who has care and control of the child consents. In the judgement it was held that the effect of this provision is that the court has no power to enforce a direction for the taking of a blood sample from a child under 16 to establish paternity, if the person with care of the child refuses to consent to the sample being taken.
Subsection (2) amends Article 8 of the Family Law Reform (Northern Ireland) Order 1977 to provide for tests to be carried out by a body which has been accredited either by the Lord Chancellor or by a body appointed by him for that purpose.
Subsection (3) amends Article 9(3) of that Order to provide that, where the person with care and control of a child under 16 does not consent to the taking of a blood sample, the sample may be taken if the court considers that it would be in the best interests of the child to do so.
Subsection (4) amends Article 10(1) of that Order, which sets out procedural matters on which the Lord Chancellor may make regulations, in two respects. First, the requirement that samples be taken by appointed individual medical practitioners is replaced by a provision enabling samples to be taken by registered medical practitioners or members of such professional bodies as may be prescribed in the regulations. In addition the Lord Chancellor is enabled to prescribe conditions which must be met by a body if it is to be eligible for accreditation.
Subsection (5) provides that nothing in the Bill will affect proceedings to determine the parentage of a child which are pending when these provisions come into operation.

Clause 66: declarations of status

Anyone can seek a declaration from the High Court, a county court or a court of summary jurisdiction that:

a named person is or was his parent;
he is illegitimate; or
he has or has not become a legitimised person.

Declarations may be sought to acquire nationality or citizenship, to establish rights of inheritance or to amend a birth certificate. Only the "child" in question (who in fact may be an adult) is entitled to apply for such a declaration. Both the child's parents, if they are alive, must be joined as respondents to the proceedings.
Clause 66 inserts Article 31B (declarations of parentage) into the Matrimonial and Family Proceedings (Northern Ireland) Order 1989 and amends Articles 34 and 36 of that Order.
Article 31B(1) provides that any person may apply for a declaration as to whether or not a person named in the application is or was the parent of another person named in the application. The application may be made to the High Court, a county court or a court of summary jurisdiction.
Article 31B(2) provides that the court can consider such an application only if either of the persons named in the application is domiciled in Northern Ireland on the date of the application, or has been habitually resident in Northern Ireland throughout the period of one year ending with that date, or if either of the persons named in the application has died and was at death domiciled in Northern Ireland or had been habitually resident in Northern Ireland for one year preceding his death.
Article 31B(3) and (4) will enable any person to apply for a declaration of parentage, subject to the requirement that if the applicant is not the child or one of the alleged parents concerned, then he or she will have to show sufficient personal interest in the determination of the application. If the court is not satisfied that this is the case, it must refuse to hear the application. A person with care must automatically be treated as having sufficient personal interest.
Article 31B(5) provides that the court may refuse to determine an application where one of the persons named in it is a child, and it considers that to determine the matter would not be in the best interests of that child.
Article 31B(6) provides that where the court has refused to hear an application it may order that the applicant is to require leave of the court to apply again for the same declaration.
Article 31B(7) provides for notification of a declaration of parentage to the Registrar General.
Subsection (3) removes the provision in Article 34(5)(b) of the Matrimonial and Family Proceedings (Northern Ireland) Order 1989 that no declaration may be made by any court that any person is or was illegitimate. This is because the effect of a declaration of parentage could be that a child is or was illegitimate, which is inconsistent with the existing provision.
Subsection (4) adds paragraph (6) to Article 36 to provide a right of appeal against the making by a court of summary jurisdiction of a declaration under Article 31B, any refusal by a court of summary jurisdiction to make such a declaration or any order under Article 31B(6) made on such a refusal.
Subsection (5) gives effect to Schedule 8, which makes consequential amendments to:

the Births and Deaths Registration (Northern Ireland) Order 1976;
the Magistrates' Courts (Northern Ireland) Order 1981;
the Matrimonial and Family Proceedings (Northern Ireland) Order 1989;
the Child Support Order; and
the Children (Northern Ireland) Order 1995.

Subsection (6) provides that nothing in the Bill will affect proceedings about parentage which are pending when clause 66 comes into operation.

Supplemental

Clause 67: repeals

Clause 67 gives effect to Schedule 9, which repeals certain existing legislation as a consequence of the measures in the Bill:

Part I: Child support;
Part II: State pensions:
Part III: Occupational and personal pension schemes;
Part IV: Loss of benefit;
Part V: Investigation powers;
Part VI: Housing benefit: and
Part VII: Tests for determining parentage and declarations of status.

Clause 68: commencement and transitional provisions

The Bill introduces a large number of measures, not all of which will come into operation at the same time. Subsection (2) provides for the provisions listed in subsection (1) to be brought into operation, possibly on different days and for different purposes, by order made by the Department or, in the case of the provisions specified in subsection (2)(b), by the Lord Chancellor. Those provisions which are not specified in, or excepted from, subsection (1) will come into operation on Royal Assent.
Subsection (3) allows the Department to make any necessary transitional arrangements in relation to the measures on selection of trustees, housing benefit revisions and appeals and discretionary housing payments.
Subsection (4) provides that regulations made under subsection (3) are to be subject to negative resolution and subsection (5) enables the regulations (among other things) to make different provision for different classes of cases, impose conditions or create exceptions.

Clause 69: short title and interpretation

Clause 69 sets out the title of the Bill and contains definitions of various terms and expressions used throughout the Bill.

Clause 69: short title and interpretation

Clause 69 sets out the title of the Bill and contains definitions of various terms and expressions used throughout the Bill.

FINANCIAL EFFECTS OF THE BILL

Overview

The financial effects of the Bill are set out below. They are in April 2000 prices and represent current best estimates. In some cases, inevitably, they are broad indicative figures only.
The measures which have the most significant financial effects are:

child support reform;
introduction of State Second Pension;
the changes in the rules for inherited SERPS;
provision of combined pension forecasts.

The impact of the remaining measures is relatively minor.

Start-up costs

Overall start-up costs are estimated to be approximately £3.7m for the reform of child support. It is estimated that in the medium to long term there will be a reduction in administrative running costs, as a result of the simpler system.
The total start-up costs, estimated to be £38 million throughout the United Kingdom, in respect of State Second Pension and combined pension forecasting will be borne by the Benefits Agency of the Department of Social Security. There are no plans at present for a charge to be imposed on the Department for the Northern Ireland costs of this service.

Administrative costs

There will be modest on-going administration costs in respect of supporting State Second Pension. These are estimated to be £100k in 2001-02 and £23k in 2002-03. These costs relate to planning, training and advertising. Pension forecasting is a service already provided free of charge to Northern Ireland by the Department of Social Security and there are no plans to charge for the expanded service.

Benefit expenditure

In the initial years (2001-02 to 2003-04) it is estimated that there will be a cumulative increase in benefit expenditure of around £18.25m. This increase is due to the measure to defer the implementation of the change to inherited SERPS until October 2002, offset by a decrease in expenditure of around £0.5m in 2002-03, due to child support reform. None of the other measures in the Bill are expected to have a significant effect on programme expenditure in the short term.
In the long run, the benefit expenditure costs of the Bill are estimated to rise overall, due to the additional benefit costs of State Second Pension, estimated to be £155m a year. The cost of other measures is estimated to be negligible.

Child support

The new child support arrangements are expected to begin to operate by April 2002. Initially, the new rules will apply only to new cases. Parents with an existing liability will be transferred at a later date, when it is clear that the new system is operating effectively, and there will be a five-year transition period as liabilities are phased to the new rates.
It is estimated that the proportion of lone parent families receiving maintenance while on IS will at least double by 2006-07, and that the proportion of maintenance due which is collected will increase from around two-thirds to at least three-quarters by 2003-04. Overall, the reforms are expected to result in reduced IS and JSA expenditure over the first five years of the scheme by approximately £9.25m. Annual savings are expected to reach £2.75m in the fifth year.
The simpler system of rates is also expected to result in lower average liabilities (for example, a reduction from £38 a week to £30.50 at today's rates). This will result in an additional cost of around £0.125m in 2006-07 for existing cases.
The overall effects of the reform are expected to result in cumulative programme savings of approximately £2.5m during the first five years. Annual savings are expected to reach £1m in the fifth year. The savings are expected to cover the expenditure needed to implement the reform.

State Second Pension

In the first two years after implementation State Second Pension is not expected to increase estimates of expenditure for SERPS. In the third year, 2004-05, it will result in a negligible increase in expenditure estimates. Entitlement to AP under State Second Pension will take some time to build up. On the assumption that everyone earning over £9,500 has contracted-out of State Second Pension by 2030, the additional benefit expenditure, including top-ups, is estimated to be £155m a year by 2050. This takes account of savings on income-related benefits in retirement. The increase in benefit costs falls on the National Insurance Fund.

Preservation of rights in respect of inherited SERPS

The costs arising from the refinements to the inherited SERPS scheme made by this Bill are estimated to be negligible. There will be programme costs estimated to be £1.5m in 2000-01, increasing to £4m in 2001-02, £6.5m in 2002-03 and £6.75m in 2003-04, and declining thereafter. By 2010 the in-year cost is expected to have declined to around £5.5m; by 2030 to around £1.5m, and by 2050 it will be negligible.

Disclosure of state pension information

The provision of combined pension forecasts is intended to encourage saving for retirement and, in the long-term, it is expected that this will contribute to a reduction in reliance on state provision; it is impossible to quantify this at present. There are no costs to the Department of developing the new forecasting service.

Other state pension matters

There are no financial effects arising from the measures dealing with the revaluation and modification of earnings factors.

Community sentences and benefits

It is not possible to provide a meaningful forecast of the likely impact on benefit expenditure in respect of the measures dealing with community sentences. The effect will depend on the number of benefit recipients who breach a community sentence after the measures come into operation, but it is clear that any effect will be to reduce benefit costs, as a consequence of the withdrawal of benefits.

Clarification and alignment of inspectors' powers

The measures in the Bill dealing with inspectors' powers are intended to clarify and align those powers, making them more robust. It is not anticipated that there will be any increase in the number of inspections carried out by the SSA as a result of the changes. However, it is estimated that there may be an increase of as much as 10 per cent. in Housing Executive inspections.

Housing benefit changes

There are no programme costs anticipated from the measures on HB decisions and appeals or discretionary housing payments, as these do not alter the structure of, or entitlement to, HB. The discretionary housing payments, although a new scheme, will, in operational terms, largely mirror the existing arrangements for discretionary payments and will be funded in a similar way.
HB overpayment recovery will not result in any Departmental costs, although there is some risk that the Housing Executive may be less successful in recovering overpaid benefit from the fraudulent tenant that from the landlord.

Staffing effects

It is anticipated that the effect on staffing of the changes in the Bill will be included in the overall costs for the implementation of the Welfare Reform Programme.

EFFECTS ON EQUAL OPPORTUNITY

The Bill will not unlawfully, unfairly or unjustifiably discriminate, directly or indirectly, against specified sections of the community.

HUMAN RIGHTS

The provisions of the Bill are compatible with the provisions of the Human Rights Act 1998.

EQUALITY IMPACT ASSESSMENT

The provisions of the Bill have been considered under the nine categories set out in section 75 of the Northern Ireland Act 1998. Some differential impacts have been identified:

It is estimated that about 71 per cent. of parents with care will benefit from the child support reform and that a corresponding percentage of non-resident parents will be worse off. 91 per cent. of parents with care are female. It is hoped that as a consequence of the simpler system a higher proportion of non-resident parents will actually pay the amount of child support assessed. Of persons with care who will gain from the reforms, 51 per cent. are estimated to be Protestant and 49 per cent. Catholic. It is estimated that the proportion of persons with care in the community is 53 per cent. Protestant and 47 per cent. Catholic.
19.3 per cent. of non-resident parents and 12.3 per cent. of persons with care are in receipt of a disability related benefit. 13.2 per cent. of working age adults in the community as a whole are in receipt of disability benefits.
The percentage of people who will be affected by the introduction of State Second Pension is estimated to be 44.5 per cent. Catholic and 55.5 per cent. Protestant. Working carers, who will benefit from these provisions are 67 per cent. Protestant and 33 per cent. Catholic. The provisions will also benefit workers on low incomes with children under 6 and ICA recipients, estimated to be 74 per cent. female and 26 per cent. male.
The new decision-making and appeals arrangements will affect all HB claimants.
The benefit sanctions for breach of community sentences will have a greater effect on young males, particularly those under 25. It is estimated that 91 per cent. of those affected will be male and 7 per cent. female. 63 per cent. are estimated to be aged 25 or under as compared with the 39 per cent. of the population as a whole falling into that age group.

SUMMARY OF THE REGULATORY APPRAISAL

Five of the measures in the Bill are expected to have either a moderate or significant effect on business. The main impact arises from measures to improve the framework for occupational and personal pensions.
The introduction of State Second Pension does not impact directly on employers. Although in the future changes to the contracting-out arrangements may result in additional costs for employers, the measures in this Bill do not create any such costs.

Child support

There will be costs to business as cases are transferred to the new scheme and deductions from earnings orders are reviewed to reflect the rate of maintenance payable. There may be more frequent reviews due to the adjustment of maintenance during the transitional period. There may also be a slight increase in the number of deductions from earnings orders issued as the child support case load expands. However, this will be offset as the clearer assessment of liability improves compliance by other collection methods.
A significant reduction in information required to make an assessment will generate significant savings for business. Less information will be required from employers on the circumstances of non-resident parents and income details for parents with care will no longer be required at all. These changes are not expected to increase business costs.

Combined pension forecasts

The majority of members of private pension schemes already receive annual pension statements of their rights from those schemes. It is intended that in future those in occupational or personal pension schemes will receive annual combined pension statements, which will include details of both state and private pension rights. The aim is to provide annual pension forecasts to employees who are not members of their employer's occupational pension scheme, but provision of combined pension forecasts by employers will be voluntary.

Occupational pension and personal schemes

Measures to speed up the winding-up of occupational pension scheme will lead to additional administrative costs for OPRA. As these costs are recovered by a levy on pension schemes, the costs will pass on to either the sponsoring employer or the pension schemes themselves. In addition schemes will be required to report to OPRA on the winding-up process.
Measures to increase the number of member-nominated trustees will impact on employers' costs in a number of ways, depending on how they chose to satisfy the requirements of the current legislation and the method they choose to satisfy the new requirements. Although there are increased costs, these will be compensated for by administrative savings.

Clarification and alignment of inspectors powers

On the whole, these measures should benefit employers, but there may be an increase in the number of inspections carried out by the Housing Executive. Any additional cost to employers is estimated to be minimal.

Recovery of housing benefit overpayments

This measure will reduce costs as landlords who report suspected fraud may no longer be expected to repay any subsequent overpaid benefit.

SECRETARY OF STATE'S CONSENT

The Secretary of State has consented under section 10(3)(b) of the Northern Ireland Act 1998 to the Assembly considering this Bill.

LEGISLATIVE COMPETENCE

The Minister for Social Development has made the following statement under section 9 of the Northern Ireland Act 1998:

"In my view the Child Support, Pensions and Social Security Bill would be within the legislative competence of the Northern Ireland Assembly."

DEFINITIONS

the 1986 Order means the Social Security (Northern Ireland) Order 1986 (NI 18), which introduced the provisions relating to inherited SERPS.
the 1995 Order means the Child Support (Northern Ireland) Order 1995 (NI 13), which amends the Child Support Order.
the 1998 Order means the Social Security (Northern Ireland) Order 1998 (NI 10), which introduced the new system of decision-making and appeals for child support and social security benefits other than HB. It was implemented in June 1999 for child support and between July and November 1999 for social security benefits.
the 1999 Order means the Welfare Reform and Pensions (Northern Ireland) Order 1999 (NI 11), which introduced a range of measures dealing with social security benefits and pensions.
the Administration Act means the Social Security Administration (Northern Ireland) Act 1992 (c. 8), which contains most of the rules and regulation-making powers relating to the claiming, payment and administration of social security benefits. It is a consolidation of pre-1992 legislation and has been extensively amended since then.
the Child Support Order means the Child Support (Northern Ireland) Order 1991 (NI 23), which contains the principal provisions relating to child support. It is extensively amended by the 1995 Order and the 1998 Order.
the Contributions and Benefits Act means the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7), which contains most of the rules relating to entitlement to social security benefits, with the exception of JSA. It is a consolidation of pre-1992 legislation and has been extensively amended since then.
the Jobseekers Order means the Jobseekers (Northern Ireland) Order 1995 (NI 15), which established JSA.
the Pensions Order means the Pensions (Northern Ireland) Order 1995 (NI 22), which provides a framework of statutory obligations on employers, trustees, scheme professionals and others connected to pension schemes, in order to provide greater security for scheme members.
the Pension Schemes Act means the Pension Schemes (Northern Ireland) Act 1993 (c. 49), which contains the rules relating to membership of occupational and personal pension schemes. It is a consolidation of pre-1993 legislation and has been extensively amended since then.
AA means attendance allowance, a non-contributory, non-means-tested, tax-free benefit paid to meet the extra costs arising from the care needs of elderly and disabled people. It is paid at two rates, higher rate (needing care day and night) and lower rate (needing care day or night).
AP means additional pension, the earnings related addition to the basic retirement pension, commonly known as SERPS.
APP means an appropriate personal pension scheme, which has been certified as appropriate for contracting-out of SERPS. APPs are not available to the self-employed. A personal pension scheme is an arrangement between an individual, who is self-employed, in non-pensionable employment, or who is not a member of an employer's occupational pension scheme, and a pension provider (such as an insurance company), which enables the individual to make provision for a pension on a money purchase basis.
BA means bereavement allowance, introduced by the 1999 Order and due to come into effect from April 2001. It will be payable to a person with no dependent children, who is aged between 45 and state pension age at the date of the spouse's death.
Benefit office means the office dealing with a claim for benefit.
CB means child benefit, a non-contributory non-means-tested, non-taxable benefit payable for each child in a family from birth up to age 19, or to a fixed termination date related to the end of non-advanced secondary education.
Community sentence means a sentence which consists of, or includes, one or more community orders. Community orders may be imposed by a court on persons aged 16 or over who have been convicted of an offence. A community service order is an order requiring a person to perform unpaid work for not less than 40 and not more that 240 hours. A probation order requires a person to be supervised by the probation service for a period of between 6 months and 3 years. A combination order comprises elements of both community service and probation orders.
Confirmatory procedure means the procedure under which regulations and orders are laid before the Assembly after making and come into effect on a specified date, but must be confirmed by a resolution of the Assembly within 6 months of that operative date, otherwise they cease to have effect.
Consolidated Fund means the Consolidated Fund of Northern Ireland.
Credits means Class 1 NICs credit of earnings for the purpose of assisting a person to satisfy the contribution conditions for basic RP, WB, IB or contribution-based JSA. A credit is available for weeks when a person is unable to work due to one of a number of specified contingencies, the most common being inability to work through illness or disability or unemployment, whilst available for, and actively seeking work. Additionally a credit may be awarded during periods of receipt of certain benefits, such as ICA or SMP. They are awarded automatically to a man who is within 5 years of pension age and who has no liability to pay contributions. Credits can only be awarded to the extent required to give a QEF for any one year.
CSA means the Child Support Agency, which is responsible for the operation of the child support system.
Deductions from earnings order means an instruction from the Department to the employer of a non-resident parent to make deductions from that parent's salary to meet child support liability. It is used where voluntary arrangements have broken down, but a non-resident parent may also choose to pay by this method.
the Department means the Department for Social Development.
DFP means the Department of Finance and Personnel.
DHFETE means the Department of Higher and Further Education, Training and Employment.
DLA means disability living allowance, a non-contributory, non-means-tested, tax-free benefit introduced in 1992 to meet the extra costs of care and mobility needs of people who become disabled before the age of 65. There are two components, a care component (paid at higher, middle and lower rate) and a mobility component (paid at higher or lower rate).
GMP means guaranteed minimum pension, means the element of a pension provided by an occupational pension scheme accrued before April 1997 and which is broadly equivalent to SERPS.
HB means housing benefit, an income-related benefit, administered by the Housing Executive, to assist people with housing costs.
Housing Executive means the Northern Ireland Housing Executive.
Home responsibilities protection ensures that the basic RP of a person caring for a child under 16 or a sick or disabled person is protected. It is not a NICs credit, but works by reducing the number of qualifying years needed for a full RP.
IB means incapacity benefit, a taxable contributory benefit introduced in April 1995 for people who are unable to work due to illness or disability. It is payable at a short-term lower rate to people who do not qualify for SSP, for the first 28 weeks of incapacity, at a short-term higher rate from the 28th to 52nd week of incapacity and a long-term rate after 52 weeks of incapacity.
ICA means invalid care allowance, a non-contributory, non-means-tested benefit for people who give up the opportunity of full-time work to provide care on a regular and substantial basis (at least 35 hours a week) to a severely disabled person.
IS means income support, an income-related benefit introduced in 1988 as successor to supplementary benefit, to support people not in remunerative work, whose net income is less than a minimum level. Rates are determined by age, family membership and other circumstances.
joint-claim couple means a married or unmarried couple who are not members of a family which includes a person in respect of whom a member of the couple is entitled to CB.
JSA means jobseeker's allowance, a benefit introduced in 1996 to replace contributory Unemployment Benefit and IS for all those needing financial support due to unemployment.
LEL means the lower earnings limit, the level of earnings below which there is no liability for employees to pay NICs. It is also the level at which people secure entitlement to contributory benefits. Earnings above this point up to the UEL accrue entitlement to SERPS or to contracted-out rebates.
LET means the low earnings threshold, to be introduced at the same time as State Second Pension. It will be up-rated annually in line with national average earnings. In 1999-2000 terms it would be £9,500 a year.
maintenance agreement means an agreement for the making, or securing the making, of child support maintenance payments to or for the benefit of any child.
negative resolution means subject to annulment in pursuance of a resolution of the Assembly.
NICs means National Insurance Contributions, which are payable by those in work and their employers into the Northern Ireland National Insurance Fund and are used to pay contributory social security benefits to people who satisfy contribution and other prescribed conditions. Self-employed people pay a lower rate of contributions, but have access to a more limited range of benefits.
Class 1 NICs means contributions paid by an employer and an employee.

Class 2 NICs means contributions paid by a self-employed person.

Non-resident parent means a parent who is not living in the same household as a child in respect of whom an application for child support maintenance has been made.
OPRA means the Occupational Pensions Regulatory Authority, a statutory body established by the Pensions Act 1995, which is responsible for ensuring that occupational pension schemes in Great Britain and Northern Ireland comply with the requirements of the relevant legislation. It has power to investigate and can impose a range of penalties for non-compliance, including prohibition from acting as a trustee, and imposition of fines. It may also institute criminal proceedings.
OPS means occupational pension scheme, a scheme organised by an employer, or on behalf of a group of employers, to provide pensions and other benefits for, or in respect of, one or more employees on leaving service or on death or retirement.
Parent with care means a parent living in the same household as a qualifying child, who usually provides day-to-day care of the child. A person caring for a child who is not the child's legal parent is referred to as a person with care.
Primary Threshold is the point at which employees begin to pay NICs. It will be increased over the 2 years beginning in April 2000 until it reaches the level of the Income Tax Personal Allowance. The Primary Threshold for 2000-01 will be £76.00 a week.
QEF means the qualifying earnings factor, an amount equal to 52 times the LEL for the year concerned.
Qualifying child means a child who is living apart from one or both parents and for whom an application for child support maintenance has been made.
Review Board means a Board constituted under the Housing Benefit (General) Regulations (Northern Ireland) 1987 to review determinations on claims for HB.
RP means retirement pension, the flat-rate pension payable to people who satisfy the contribution requirements. Married women, widows and some widowers can receive pensions based on their spouses' contribution records.

Category A RP means RP paid on a person's own contribution record.

Category B RP means RP paid on the contribution record of a spouse.

RPI means the retail prices index on which the level of the annual increase in the rate of benefits is based. It takes account of price changes each month in a wide range of different goods and services, including food, clothing, fuel, gas and electricity.
SDA means severe disablement allowance, a non-contributory, tax-free benefit for people incapable of work for at least 28 weeks who do not qualify for IB. SDA is being withdrawn from April 2001, but people already receiving benefit will continue to do so.
SERPS means the state earnings related pension scheme, the basis for calculating AP. AP is earned on contributions between the LEL and UEL.
SMP means statutory maternity pay, payable by employers for a period not exceeding 18 weeks to a woman who has ceased to work because of pregnancy or confinement.
SSA means the Social Security Agency, responsible for deciding claims for and payment of social security benefits.
SSP means statutory sick pay, payable by an employer for the first 28 weeks of absence from work due to illness.
Tax year means the period running from 6 April in any year to 5 April in the following year. It is the period over which liability to pay income tax is assessed.
Training allowance is a weekly allowance paid from public funds to people participating in certain courses of training, instruction or work experience, provided by, or in pursuance of, arrangements made with DHFETE under section 1 of the Employment and Training Act (Northern Ireland) 1950. A training allowance consists of a basic element equivalent to the participant's benefit entitlement when unemployed, plus, where appropriate, a training premium or top-up, reimbursement of travelling expenses and living away from home allowance.
UEL means the upper earnings limit, the level of weekly earnings above which there is no liability for employee NICs. It sets the upper limit for the weekly earnings on which AP accrues and which qualify for contracted-out rebates.
Widows' benefits are available to working age widows and entitlement is based on the NICs record of the deceased husband. From April 2001 they will be replaced by bereavement benefits, which will be available to both widows and widowers, based on the contribution record of a deceased spouse.
WMA means widowed mother's allowance payable to a widow with children for whom she received CB. It is due to be replaced in 2001 by WPA, but existing recipients at the point of change will continue to receive WMA.
WP means widow's pension payable to a widow aged between 45 and state pension age with no dependent children. It is due to be replaced in 2001 by BA, but existing recipients at the point of change will continue to receive WP.
WPA means widowed parent's allowance introduced by the 1999 Order and due to come into effect from April 2000. It will be payable to a surviving spouse with a child for whom CB is payable.