Legal background
- The following gives a brief overview of the existing legislation that is referenced by this Act. Further explanation if required is provided in the section by section commentary.
- The 1992 Act provides for the annual up-rating of social security benefits specified in sections 150, 150A and 151A.
- Section 150(1) of the 1992 Act requires the Secretary of State to review social security benefits, to determine whether they have retained their value in relation to the general level of prices. If the benefits have not retained their value, subsection (2)(a) requires the Secretary of State to bring forward a draft up-rating order to up-rate some of them by at least as much as the increase in the general level of prices. The main benefits affected are Attendance Allowance, Carer’s Allowance, Disability Living Allowance, Personal Independence Payment and the Additional State Pension. The Secretary of State has a discretion under subsection (2)(b) as to whether or not to increase other benefits in the draft up-rating order. The main benefits affected are the working age benefits.
- Section 151A of the 1992 Act requires the inherited increments of the old State Pension and certain amounts exceeding the full rate of the new State Pension (payable under transitional arrangements) to be increased in line with prices if there has been an increase in prices over the review period.
- Under section 150(1) and 151A (8) the Secretary of State has discretion as to how to measure changes in the general level of prices. In recent years she has decided to measure the increase in prices over the review period using the CPI.
- Section 150A of the 1992 Act requires the Secretary of State to review certain benefits, to determine whether they have retained their value in relation to the general level of earnings. If the benefits have not retained their value, subsection (2) requires the Secretary of State to bring forward a draft up-rating order to up-rate them by at least as much as the increase in the level of earnings. Benefits affected are: the basic State Pension, the full rate of the new State Pension, the Standard Minimum Guarantee element of Pension Credit, and survivors’ benefits in Industrial Death Benefit.
- Under section 150A (8) the Secretary of State has discretion over how to measure changes in the general level of earnings and has decided to measure the increase over the appropriate period using the AWE index for the quarter ending July in any given year.
