Every year the Work and Pensions Secretary is required to undertake a review of social security rates and subsequently can present to Parliament an up-rating order. However, the Social Security Administration Act 1992 does not currently allow ministers to bring forward an annual Up-rating Order for certain benefits, including the State Pension, if earnings have shown no growth.
Due to the impact of Covid-19 and subsequent challenging economic circumstances, average earnings are expected to show no growth this year. That is why we will today introduce a two clause Up-rating Bill which will give ministers powers to increase State Pension rates in 2021/22, as well as Pension Credit rates and the widows’ and widowers’ element in Industrial Death Benefit. Without this legislation, it would not be possible to increase these rates if, as expected, there is no growth in earnings in the relevant period. The final rates will be subject to the Secretary of State’s autumn review, as per the normal process.
This Bill largely covers reserved matters for Great Britain. Responsibility for the provision covered by the widows’ and widowers’ element in Industrial Death Benefit are devolved to the Scottish Government and we understand that Scottish Ministers will be laying a legislative consent motion next week. As announced by the Leader of the House of Commons, this Bill will be considered in the House of Commons on 1st October.
The Government has worked hard to protect all age groups during the pandemic, by strengthening the welfare safety net, introducing furlough and income protection schemes, as well as supporting those who have lost their jobs back into work. This Bill makes technical changes which will ensure State Pensions can still be up-rated, providing peace of mind to pensioners about their financial health and allowing the Government to maintain the manifesto commitment to the Pensions Triple Lock.
THE RT HON THERESE COFFEY MP
Secretary of State for Work & Pensions
GUY OPPERMAN MP
Minister for Pensions
and Financial Inclusion