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Statutory Instruments

1992 No.198

PENSIONS

The Pensions Increase (Review) Order 1992

Made

6th February 1992

Laid before Parliament

13th February 1992

Coming into force

6th April 1992

Whereas by virtue of section 23(2)(1) of the Social Security Pensions Act 1975(2) a direction has been given(3) under section 63(2) and section 83(3)(d) of the Social Security Act 1986(4) by the Secretary of State for Social Services that the sums mentioned in section 63(1)(b) of the Social Security Act 1986 are to be increased;

Now therefore the Treasury, in exercise of thepowers conferred by section 59(1), (2), (5) and (5ZA) of the Social Security Pensions Act 1975(5) and now vested in them(6), and all other powers enabling them in that behalf, hereby make the following Order:

Citation and commencement

1. This Order may be cited as the Pensions Increase (Review) Order 1992 and shall come into force on 6th April 1992.

Interpretation

2.-(1) In this Order-

"the 1971 Act" means the Pensions (Increase) Act 1971(7);

"the 1974 Act" means the Pensions (Increase) Act 1974(8);

"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 Act(9);

"the existing Orders" means the Pensions Increase (Annual Review) Order 1972(10) the Pensions Increase (Annual Review) Order 1973(11), the Pensions Increase (Annual Review) Order 1974(12), the Pensions Increase (Annual Review) Order 1975(13), the Pensions Increase (Annual Review) Order 1976(14), the Pensions Increase (Annual Review) Order 1977(15), the Pensions Increase (Annual Review) Order 1978(16), the Pensions Increase (Review) Order 1979(17), the Pensions Increase (Review) Order 1980(18), the Pensions Increase (Review) Order 1981(19), the Pensions Increase (Review) Order 1982(20), the Pensions Increase (Review) Order 1983(21), the Pensions Increase (Review) Order 1984(22), the Pensions Increase (Review) Order 1985(23), the Pensions Increase (Review) Order 1986(24), the Pensions Increase (Review) Order 1987(25), the Pensions Increase (Review) Order 1988(26), the Pensions Increase (Review) Order 1989(27), the Pensions Increase (Review) Order 1990(28), and the Pensions Increase (Review) Order 1991(29);

"official pension" has the meaning given by section 5(1) of the 1971 Act;

"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 Act(30);

"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 Act(31), and the "beginning date" shall be construed accordingly.

(3) Where, for the purposes of thisOrder, 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 increases

3. The annual rate of an official pension may, if a qualifying condition is satisfied or the pension is a derivative or substituted pension or a relevant injury pension, be increased by the pension authority in respect of any period on or after 6th April 1992 as follows-

(1) a pension beginning before 8th April 1991 may be increased by 4.1 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;

(2) a pension beginning on or after 8th April 1991 and before 6th April 1992 may be increased by 4.1 per cent multiplied by

where

A is the number of complete months in the period between thebeginning date of the pension and 6th April 1992, and

B is 12.

Increases in certain lump sums

4. In respect of any lump sum or instalment of a lump sum which became payable before 6th April 1992 but on or after 8th April 1991 there may be paid an increase of 4.1 per cent of the amount of the lump sum or instalment (as increased by the amount under section 1 of the 1971 Act or under the existing Orders) multiplied by

where

A is the number of complete months in the period between thebeginning date for the lump sum or, if later, 8th April 1991 and thedate on which it became payable; and

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 minimumpension on 6th April 1992, 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 Treasury(32) shall, in accordance with the provisions of section 59A of the 1975 Act, otherwise direct.

6. The amount by reference to which any increase in the rate of awidow'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.

Irvine Patnick

Thomas Sackville

Two of the Lords Commissioners of Her Majesty's Treasury

6th February 1992

Explanatory Note

(This note is not part of the Order)

Under section 59 of the Social Security Pensions Act 1975 as amended, and as modified by section 59A of the 1975 Act the Treasury (in whom the functions conferred by those provisions are now vested) are required to provide by order for the increase in the rates of public service pensions. The increase is the percentage (or in some circumstances a fraction of the percentage) by which the Secretary of State for Social Security has, by direction given under the provisions of section 23(2) of the Social Security Pensions Act 1975 (as amended by Schedule 10, paragraph 91 of the Social Security Act 1986), increased the sums referred to in section 63(1)(b) of the Social Security Act 1986. These are the sums which are the additional pensions in long term benefits, namely the additional pension entitlements accruing to employees in respect of earnings after 5th April 1978.

For pensionswhich began before 8th April 1991 the increase is 4.1 per cent. For pensions which began on or after 8th April 1991 the increases are as follows-

Pensions Beginning	Percentage Increase	Pensions Beginning	Percentage Increase
8th April 1991 to 21st April 1991	4.1%	22nd September 1991 to 21st October 1991	2.05%
22nd April 1991 to 21st May 1991	3.76%	22nd October 1991 to 21st November 1991	1.71%
22nd May 1991 to 21st June 1991	3.42%	22nd November 1991 to 21st December 1991	1.37%
22nd June 1991 to 21st July 1991	3.08%	22nd December 1991 to 21st January 1992	1.03%
22nd July 1991 to 21st August 1991	2.73%	22nd January 1992 to 21st February 1992	0.68%
22nd August 1991 to 21st September 1991	2.39%	22nd February 1992 to 21st March 1992	0.34%

Deferred lump sums beginning on or before 21st March 1992 and which be comepayable after 5th April 1992 receive the same percentage increase as pensions which began on the same date. Article 4 of the Order provides for increases on certain deferred lump sums which became payable on or after 8th April 1991 and before 6th April 1992.

The Order also makesprovision for the amount by reference to which any increase in the rate of an official pension is to be calculated to be reduced by the amount equal to the rate of the guaranteed minimum pension entitlement deriving from the employment which gives rise to the official pension. This is required by section 59(5) of the Social Security Pensions Act 1975 but by virtue of section 59A of that Act and the Transfer of Functions (Minister for the Civil Service and Treasury) Order 1981 the Treasury is empowered to direct that in respect of specified cases or classes of case either no such reduction be made or the reduction shall be less than the rate of the guaranteed minimum pension. Section 59(5ZA) was inserted into section 59 by section 5 of the Pensions

(1)

Section 23(2) was amended by Schedule 10, paragraph 91 to the Social Security Act 1986 (c. 50).

(2)

)1975 c. 60.

(3)

The direction is contained in S.I. 1991/2910.

(4)

1986 c. 50; section 83(3) was amendedby section 17(2)(b) of the Social Security Act 1989 (c. 24); section 1 of the Social Security and Housing Benefits Act 1983 (c. 36) made provision for increases to reflect actual, rather than estimated, rises in the general level of prices.

(5)

Section 59(1)was amended by the Social Security Act 1986, Schedule 10, paragraph 93 and section 1(7) of the Pensions (Miscellaneous Provisions) Act 1990 (c. 7). Section 59(5) was amended by section 11 of the Social Security Act 1979 (c. 18) and the Social Security Act 1985 (c. 53), Schedule 5, paragraph 33. Section 59 was also amended by the Social Security Act 1979, sections 11 and 21(4) and Schedule 3, paragraph 20, section 9(8) of the Social Security Act 1986 and section 5 of the Pensions (Miscellaneous Provisions) Act 1990, which inserted sub-section (5ZA). Section 59 is modified by section 59A, which was inserted by section 11 of the Social Security Act 1979 and amended by section 9(9) of the Social Security Act 1986.

(6)

S.I. 1981/1670.

(7)

1971 c. 56.

(8)

1974 c. 9.

(9)

Section 17(1) was amendedby sections 1(3) and 3(3) of the 1974 Act and by section 1(6) of the Pensions (Miscellaneous Provisions) Act 1990.

(10)

S.I. 1972/1298.

(11)

S.I. 1973/1370.

(12)

S.I. 1974/1373.

(13)

S.I. 1975/1384.

(14)

S.I. 1976/1356.

(15)

S.I. 1977/1387.

(16)

S.I. 1978/1211.

(17)

S.I. 1979/1047.

(18)

S.I. 1980/1302.

(19)

S.I. 1981/1217.

(20)

S.I. 1982/1178.

(21)

S.I. 1983/1264.

(22)

S.I. 1984/1307.

(23)

S.I. 1985/1575.

(24)

S.I. 1986/1116.

(25)

S.I. 1987/130.

(26)

S.I. 1988/217.

(27)

S.I. 1989/477.

(28)

S.I. 1990/483.

(29)

S.I 1991/684.

(30)

Section 3 was amended by section 3(3) of the 1974 Act, section 1 of the Pensions (Miscellaneous Provisions) Act 1990 and by the Pensions Increase (Reduction of Qualifying Age) Order 1972, (S.I. 1972/1299).

(31)

Section 8(2) was amended by section 1(5) of the Pensions (Miscellaneous Provisions) Act 1990.

(32)

See S.I. 1981/1670, articles 2(1)(c) and 3(5).