Social Security (Miscellaneous Provisions) Act 1977

Adjustment of benefit

5 Alteration of earnings rule

(1) In sections 30(2), 45(4) and 66(5) of the principal Act (under which the amount of weekly earnings which must be exceeded before certain benefits are reduced by reference to the earnings is to be increased from £35 to £50 in 1977) the words " 1977 ... ... ... £50 " shall be omitted; and accordingly in section 124(1)(d) of that Act (which refers to the provisions aforesaid) the words " and (2) " , " and (4) " and " and (5) " shall also be omitted.

(2) In section 11 of the Pensions Act (which provides that the rate of a retirement pension from which deductions may be made under the earnings rule is its rate exclusive of the additional component) after the words " additional component" there shall be inserted the words " , of any increase under Schedule 1 to this Act so far as attributable to additional component ".

6 Review of earnings rule operation

The Secretary of State shall review the operation of the earnings rule for retirement pensioners and the wives of retirement and invalidity pensioners and the cost of its abolition, including the extent to which it acts as a disincentive to work, and shall lay a report of his review before Parliament by 31st October 1978.

7 Review of limits relating to earnings

(1) In section 125 of the principal Act (which requires the Secretary of State to determine in each tax year whether the sums specified in the provisions mentioned in paragraphs (a) and (b) of subsection (1) of that section have retained their value in relation to the general level of earnings or prices in Great Britain and, if they have not, to provide for them to be increased by an order approved by a resolution of each House of Parliament) after the said paragraph (b) there shall be inserted the following paragraph—

(c) sections 30(1), 45(3) and 66(4) of this Act, excluding paragraphs (a) and (b) of those provisions.

(2) At the end of subsection (2) of the said section 125 (under which the Secretary of State is required, in making a determination as to value under that section, to have regard in certain cases to prices only and in other cases to earnings or prices, whichever he considers more advantageous to beneficiaries) there shall be inserted the words " and shall have regard only to earnings as respects the sums specified in the provisions mentioned in subsection (1)(c) of this section ".

(3) At the end of section 126(4) of the principal Act (which among other things authorises the Secretary of State, in preparing a draft up-rating order, to round any sum up or down as he thinks fit having regard to the nature and amount of the relevant benefit) after the words " having regard " there shall be inserted the words " , in the case of a sum specified in a provision mentioned in section 125(1)(a) or (b), ".

(4) In section 126(5) of the principal Act (which requires a draft of an up-rating order to provide, except in certain cases, that the increase which the order makes of any sum comes into force within 12 months of the coming into force of the provision fixing that sum) after the words "of 12 months" there shall be inserted the words " or, in the case of the first increase by order of a sum specified in a provision mentioned in section 125(1)(c), the prescribed period ".

8 Other adjustments of benefit

(1) A Category A or Category B retirement pension which is payable by virtue of section 33(2) of the principal Act (which enables benefit to be made payable in cases where the first of the relevant contribution conditions is satisfied but the second of them is not) and a widowed mother's allowance which is so payable shall not be increased on account of a child if the pension or allowance contains no basic component in consequence of a failure to satisfy a contribution condition.

(2) Where a person is entitled to unemployment benefit or sickness benefit at a rate determined under section 14(6) of the principal Act (which relates to persons over pensionable age) or to an invalidity pension at a rate determined under section 15(4) of that Act (which also relates to such persons) and the retirement pension by reference to which the rate of the said benefit or invalidity pension is determined—

(a) would have been payable only by virtue of section 33 of that Act (which provides for the payment of reduced benefit in cases where contribution conditions are only partly satisfied); and

(b) would, in consequence of a failure to satisfy a contribution condition, have contained no basic component,

the said benefit or invalidity pension shall not be increased on account of a child.

(3) Where a person—

(a) is entitled to an invalidity pension at a rate determined under the said section 15(4); and

(b) would have been entitled only by virtue of the said section 33 to the retirement pension by reference to which the weekly rate of the invalidity pension is determined,

the amount of an increase of that weekly rate under section 45 or section 46 of the principal Act (which relate to increases for wives and for women with the care of children) shall be the same as the amount of the increase which, by virtue of the said section 45 or 46, would have been made in the weekly rate of the retirement pension if that pension had been payable.