54.The provisions of this Act will increase the number of people who are deemed to be earning at the low earnings threshold, and so accruing state second pension as if they had Band 1 earnings until the proposed new simplified state second pension is introduced.
55.The changes allow persons to be deemed to be earning at the low earnings threshold for a tax year starting with that commencing 6 April 2010, if they satisfy any of three conditions:
the first is that the person has earnings equal to or greater than the qualifying earnings factor for the year but less than the low earning threshold;
the second is that the person has earnings less than the qualifying earnings factor but is entitled to enough new earnings factor credits to bring his earnings factor up to the qualifying earnings factor;
the third is that a person has no earnings but is entitled to 52 of the new credits for the year.
56.The new earnings credits, of 1/52 of the qualifying earnings factor for the year, are available in respect of each week in which a person was:
awarded child benefit for a child under 12;
a foster parent;
caring for someone with a qualifying disability benefit for at least 20 hours a week; or
entitled to carer’s allowance;
entitled to severe disablement allowance or long-term incapacity benefit. The labour market attachment test would no longer apply to disabled people from 6 April 2010.
57.People earning at or above the low earnings threshold will continue to accrue state second pension according to the band of earnings they are in until the new simplified state second pension is introduced (see paragraphs 58 – 63 below).