2006 No. 741
The Pensions Increase (Review) Order 2006
Made
Laid before Parliament
Coming into force
In accordance with section 151(1) of the Social Security Administration Act 19921 the Secretary of State for Work and Pensions has given a direction2 under section 150(2) and section 190(1)(a) of that Act that the sums mentioned in section 150(1)(c) of that Act are to be increased;
Citation and commencement1
1
This Order may be cited as the Pensions Increase (Review) Order 2006 and comes into force on 10th April 2006.
2
This Order and the existing Orders may be cited together as the Pensions Increase (Review) Orders 1972 to 2006.
Interpretation2
1
In this Order—
“the 1971 Act” means the Pensions (Increase) Act 19715;
“the 1974 Act” means the Pensions (Increase) Act 19746;
“the 1975 Act” means the Social Security Pensions Act 1975;
“basic rate” and “derivative pension” have the meanings given by section 17(1) of the 1971 Act7;
“the existing Orders” means the Pensions Increase (Annual Review) Order 19728, the Pensions Increase (Annual Review) Order 19739, the Pensions Increase (Annual Review) Order 197410, the Pensions Increase (Annual Review) Order 197511, the Pensions Increase (Annual Review) Order 197612, the Pensions Increase (Annual Review) Order 197713, the Pensions Increase (Annual Review) Order 197814, the Pensions Increase (Review) Order 197915, the Pensions Increase (Review) Order 198016, the Pensions Increase (Review) Order 198117, the Pensions Increase (Review) Order 198218, the Pensions Increase (Review) Order 198319, the Pensions Increase (Review) Order 198420, the Pensions Increase (Review) Order 198521, the Pensions Increase (Review) Order 198622, the Pensions Increase (Review) Order 198723, the Pensions Increase (Review) Order 198824, the Pensions Increase (Review) Order 198925, the Pensions Increase (Review) Order 199026, the Pensions Increase (Review) Order 199127, the Pensions Increase (Review) Order 199228, the Pensions Increase (Review) Order 199329, the Pensions Increase (Review) Order 199430, the Pensions Increase (Review) Order 199531, the Pensions Increase (Review) Order 199632, the Pensions Increase (Review) Order 199733, the Pensions Increase (Review) Order 199834, the Pensions Increase (Review) Order 199935, the Pensions Increase (Review) Order 200036, the Pensions Increase (Review) Order 200137, the Pensions Increase (Review) Order 200238, the Pensions Increase (Review) Order 200339, the Pensions Increase (Review) Order 200440 and the Pensions Increase (Review) Order 200541;
“official pension” has the meaning given by section 5(1) of the 1971 Act42;
“pension authority” has the meaning given by section 7(1) of the 1971 Act;
“qualifying condition” means one of the conditions laid down in section 3 of the 1971 Act43;
“relevant injury pension”, “substituted pension” and “widow’s pension” have the meanings given by section 17(1) of the 1971 Act.
2
For the purposes of this Order the time when a pension “begins” is that stated in section 8(2) of the 1971 Act44, and the “beginning date” shall be construed accordingly.
3
Where, for the purposes of this Order, it is necessary to calculate the number of complete months in any period an incomplete month shall be treated as a complete month if it consists of at least 16 days.
Pension increases3
1
The pension authority may, if any of the conditions in subsection (2) are fulfilled, increase the annual rate of an official pension in respect of any period on or after 10th April 2006 as follows—
a
a pension beginning before 11th April 2005 may be increased by 2.7 per cent of the basic rate (as increased by the amount of any increase under section 1 of the 1971 Act or the existing Orders);
b
a pension beginning on or after 11th April 2005 and before 10th April 2006 may be increased by 2.7 per cent multiplied by
where
- i
A is the number of complete months in the period between the beginning date of the pension and 10th April 2006; and
- ii
B is 12.
2
Those conditions are—
a
a qualifying condition is satisfied;
b
the official pension is—
i
a derivative pension;
ii
a substituted pension; or
iii
a relevant injury pension.
Increases in certain lump sums4
1
This article applies to any lump sum or instalment of a lump sum which became payable on or after 11th April 2005 but before 10th April 2006.
2
The pension authority may increase a lump sum or instalment of a lump sum to which this article applies by 2.7 per cent of the amount of the lump sum or instalment (as increased by the amount of any increase under section 1 of the 1971 Act or the existing Orders) multiplied by
where
- a
A is the number of complete months in the period between the beginning date for the lump sum or, if later, 11th April 2005 and the date on which it became payable; and
- b
B is 12.
Reductions in respect of guaranteed minimum pensions
5
The amount by reference to which any increase in the rate of an official pension provided for by this Order is to be calculated shall, in the case of a person—
a
who is entitled to a guaranteed minimum pension on 10th April 2006; and
b
whose entitlement to that guaranteed minimum pension arises from an employment from which (either directly or by virtue of the payment of a transfer credit) entitlement to the official pension also arises,
be reduced by an amount equal to the rate of the guaranteed minimum pension unless the Treasury45 otherwise direct, in accordance with the provisions of section 59A of the 1975 Act.
6
The amount by reference to which any increase in the rate of a widow’s or widower’s pension provided for by this Order is to be calculated shall, where the pensioner becomes entitled on the death of the deceased spouse to a guaranteed minimum pension, be reduced in accordance with section 59(5ZA) of the 1975 Act.
Signatory text
(This note is not part of the Order)