Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Incapacity benefit
In Part II of the Social Security Contributions and Benefits Act 1992 (contributory benefits), after section 30 insert—.
In Schedule 3 to the Social Security Contributions and Benefits Act 1992 (contribution conditions for entitlement to benefit), in the heading before paragraph 2 and in sub-paragraph (1) of that paragraph for “sickness benefit" substitute “ short-term incapacity benefit ”.
In Part II of the Social Security Contributions and Benefits Act 1992, after section 30A (inserted by section 1 above), insert—.
In Part I of Schedule 4 to the Social Security Contributions and Benefits Act 1992 (rates of benefit, &c.: contributory periodical benefits), for paragraph 2 (sickness benefit) substitute—; and after that paragraph insert—.
In section 150 of the Social Security Administration Act 1992 (annual up-rating of benefits), in subsection (1) (sums to be reviewed) after paragraph (a) insert—; and in subsection (3) (sums subject to mandatory up-rating), after “(a)(ii) or (iii)," insert “ (aa), ”.
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After section 86 of the Social Security Contributions and Benefits Act 1992 insert—.
In Part IV of Schedule 4 to the Social Security Contributions and Benefits Act 1992 (rates of benefit, &c.: increases for dependants), after paragraph 1 insert—and for paragraph 2 substitute—.
Any order under section 150 of the Social Security Administration Act 1992 (up-rating orders) made by the Secretary of State before the commencement of this section shall include provision—
making such increase (if any) in the sum specified in the provision inserted by subsection (2) above as the amount of short-term incapacity benefit at the higher rate as is necessary to make that sum equal to the higher rate or, if there is only one such rate, to the rate of statutory sick pay payable after the order comes into force; and
making such increases in the other sums specified in the provisions inserted by subsections (2) and (6) above in Schedule 4 to the Social Security Contributions and Benefits Act 1992 as would have been required if the provisions in question had been in force at all material times.
In Part II of the Social Security Contributions and Benefits Act 1992, after section 30B (inserted by section 2(1) above) insert—.
In Schedule 3 to the Social Security Contributions and Benefits Act 1992 (contribution conditions for entitlement to benefit), at the end of paragraph 2 (conditions for entitlement to short-term incapacity benefit) add—.
The Secretary of State may by regulations make such provision as appears to him to be necessary or expedient for the purposes of, or in connection with, the transition to incapacity benefit from sickness benefit and invalidity benefit. Nothing in the following provisions of this section shall be construed as restricting the generality of that power.
In this section—“commencement” means the commencement of sections 1 to 3 above and the consequent repeal of the provisions of the Social Security Contributions and Benefits Act 1992 relating to sickness benefit and invalidity benefit; and“prescribed” means prescribed by regulations under this section.
Regulations under this section may provide that where a person was entitled to sickness benefit or invalidity benefit immediately before commencement any award of sickness benefit or invalidity benefit shall have effect after commencement, in accordance with the regulations and subject to such modifications as may be prescribed, as an award of incapacity benefit. In the following provisions of this section such awards are referred to as “transitional awards” of incapacity benefit.
The reference in subsection (3) above to a person who was entitled to sickness benefit or invalidity benefit includes a person who would have been so entitled but for being disqualified by virtue of regulations under section 32 or 59 of the Social Security Contributions and Benefits Act 1992; and regulations under this section may provide that any such disqualification shall have such corresponding effect as may be prescribed in relation to the transitional award.
Regulations under this section may provide that a person’s entitlement under a transitional award of incapacity benefit shall, except as may be prescribed, be subject to satisfying the conditions of entitlement to incapacity benefit, and may in particular provide—Excepted cases may be defined, in particular, by reference to the age of the person on commencement and whether he was receiving invalidity benefit on 1st December 1993 (the date of the announcement of the new scheme).
for the determination in accordance with Part XIIA of the Social Security Contributions and Benefits Act 1992 of the question whether that person is incapable of work; and
for the termination of his entitlement on his attaining pensionable age.
Regulations under this section may provide—Such provision may be made for the purposes of a transitional award of incapacity benefit or of enabling a claim for incapacity benefit to be made after commencement on the basis that a day of incapacity for work after commencement forms part of a period of incapacity for work beginning before commencement; and such cases are referred to in the following provisions of this section as “transitional cases”.
that days before commencement which were days of incapacity for work for the purposes of sickness benefit or invalidity benefit, and such other days as may be prescribed, shall be treated as having been days of incapacity for work for the purposes of incapacity benefit, and
that days of entitlement to sickness benefit or invalidity benefit, and such other days as may be prescribed, shall be treated as having been days of entitlement to incapacity benefit.
Regulations under this section may provide—
for the rate of short-term incapacity benefit under a transitional award to be increased, in such cases as may be prescribed, as if that benefit were sickness benefit and the provisions of Part IV of the Social Security Contributions and Benefits Act 1992 (increases for dependants) continued to apply to that benefit; and
for the payment in transitional cases, in such circumstances as may be prescribed, of long-term incapacity benefit to persons over pensionable age.
Regulations under this section may provide that in transitional cases the rate of short-term incapacity benefit at the higher rate or of long-term incapacity benefit shall be calculated—
by reference to the rate of invalidity benefit, and of any relevant related allowance, addition or increase, paid or payable immediately before commencement, with such up-rating (if any) as may be provided for in accordance with the regulations (whether by applying the provisions of section 150 of the Social Security Administration Act 1992 or otherwise), and
without any increase or addition which would otherwise be payable with incapacity benefit.
If regulations make provision of the kind mentioned in subsection (8) above they may also make with respect to any additional pension element of incapacity benefit provision corresponding to any of the provisions in force before commencement with respect to the additional pension element of invalidity pension.
Regulations under this section may provide, in relation to transitional cases where the rate of incapacity benefit falls to be calculated by reference to the rate of dependency allowance paid or payable before commencement, that any old saving provisions shall have effect subject to the regulations or shall cease to have effect in accordance with the regulations. For the purposes of this subsection—“dependency allowance” means an allowance of the kind provided for in Part IV of the Social Security Contributions and Benefits Act 1992, and“old saving provisions” means provisions of any description, including administrative provisions, in connection with a previous change affecting entitlement to or the amount of dependency allowances, preserving a person’s position in any respect.
For the period of four years from Royal Assent a statutory instrument which contains (whether alone or with other provisions) any regulations under this section shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.
A statutory instrument—shall be subject to annulment in pursuance of a resolution of either House of Parliament.
which contains (whether alone or with other provisions) any regulations made under this section, and
which is not subject to any requirement that a draft of the instrument be laid before and approved by a resolution of each House of Parliament,
Test of incapacity for work
In the Social Security Contributions and Benefits Act 1992 (general provisions), after section 171 insert—.
In the Social Security Contributions and Benefits Act 1992, after the sections inserted by section 5 above, insert—.
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For the period of four years from Royal Assent a statutory instrument which contains (whether alone or with other provisions) any regulations made under any of the following provisions shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House—
in the Social Security Contributions and Benefits Act 1992—section 171A(2), (3), or (4), section 171B(4)(d), (6), (7) or (8), section 171C(2) or (3), section 171D, section 171E(1), (2) or (3), or section 171G(1)(c);
in the Social Security Administration Act 1992, section 61A(2), (3) or (4).
The Secretary of State may by regulations make such provision as appears to him to be necessary or expedient for the purposes of, or in connection with, the transition to the test of incapacity for work provided for by sections 5 and 6 above. Nothing in the following provisions of this section shall be construed as restricting the generality of that power.
In this section—“commencement” means the commencement of those sections; and“prescribed” means prescribed by regulations under this section.
Regulations under this section may provide—
that days of incapacity for work before commencement, and such other days as may be prescribed, shall be taken into account for the purposes of section 171B(3) of the Social Security Contributions and Benefits Act 1992 (period after which the all work test applies);
that a person’s continued enjoyment after commencement of any allowance or other advantage under any provision for the purposes of which Part XIIA of the Social Security Contributions and Benefits Act 1992 applies shall, except as may be prescribed, be subject to satisfying the test of incapacity for work under that Part; and
for the determination in accordance with that Part of the question whether the person is incapable of work.
For the period of four years from Royal Assent a statutory instrument which contains (whether alone or with other provisions) any regulations under this section shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.
A statutory instrument—shall be subject to annulment in pursuance of a resolution of either House of Parliament.
which contains (whether alone or with other provisions) any regulations made under this section, and
which is not subject to any requirement that a draft of the instrument be laid before and approved by a resolution of each House of Parliament,
Statutory sick pay
In section 157(1) of the Social Security Contributions and Benefits Act 1992 (statutory sick pay: rates of payment), for the words following “at the weekly rate of" substitute “ £52.50 ”.
Any order under section 150 of the Social Security Administration Act 1992 (up-rating orders) made by the Secretary of State before the commencement of this section shall include provision making such increase (if any) in the sum specified in the amendment made by subsection (1) above as the amount of statutory sick pay as is necessary to make that sum equal to the higher rate of statutory sick pay payable after the order comes into force.
In subsection (2) of section 157 of the Social Security Contributions and Benefits Act 1992 (power to make provision by order as to rates of payment, &c.), for paragraph (a) substitute—.
In sections 155(4) and 158(2)(b) of that Act for “the appropriate weekly rate set out in" substitute “ the weekly rate applicable in accordance with ”.
Other amendments
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In section 150 of the Social Security Administration Act 1992 (annual up-rating of benefits), in subsection (3) (sums subject to mandatory up-rating), in paragraph (a) for “paragraph 1, 2, 4, 5 or 6 of Part III" substitute “ paragraphs 1 to 6 of Part III ”.
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General
The enactments mentioned in Schedule 1 have effect subject to the amendments specified there which are consequential on the provisions of this Act. Part I contains amendments of the Social Security Contributions and Benefits Act 1992; and Part II contains amendments of the Social Security Administration Act 1992 and certain other enactments.
The enactments mentioned in Schedule 2 are repealed to the extent specified.
The Secretary of State may by regulations make such transitional provision, and such consequential provision or savings, as appear to him to be necessary or expedient in preparation for or in connection with the coming into force of any provision of this Act or the operation of any enactment repealed or amended by any such provision during any period when the repeal or amendment is not wholly in force.
A statutory instrument—shall be subject to annulment in pursuance of a resolution of either House of Parliament.
which contains (whether alone or with other provisions) any regulations made under this section, and
which is not subject to any requirement that a draft of the instrument be laid before and approved by a resolution of each House of Parliament,
The amendments of the Social Security Contributions and Benefits Act 1992 made by this Act shall be treated as repealing and re-enacting with modifications the provisions of that Act relating to incapacity for work, so that, subject to any amendment, repeal or revocation—
any reference in any enactment to any such provision shall be construed as a reference to the corresponding new provision or, as the case may be, to the provision as amended by this Act; and
subordinate legislation made under any such provision—
shall continue in force and have effect as if made under the corresponding new provision or, as the case may be, the provision as amended by this Act, and
shall be construed as if originally so made.
In any enactment, subject to any amendment—
any reference to sickness benefit shall be construed as a reference to short-term incapacity benefit at the lower rate, and
any reference to invalidity benefit or invalidity pension shall be construed as a reference to short-term incapacity benefit at the higher rate or long-term incapacity benefit.
In this section “enactment” includes an enactment contained in subordinate legislation, and “subordinate legislation” has the meaning given by section 21(1) of the Interpretation Act 1978.
An Order in Council under paragraph 1(1)(b) of Schedule 1 to the Northern Ireland Act 1974 (legislation for Northern Ireland in the interim period) which states that it is made only for purposes corresponding to those of this Act—
shall not be subject to paragraph 1(4) and (5) of that Schedule (affirmative resolution of both Houses of Parliament), but
shall be subject to annulment in pursuance of a resolution of either House of Parliament.
There shall be paid out of money provided by Parliament—
any expenses incurred by a Minister of the Crown in consequence of this Act; and
any increase attributable to this Act in the sums payable out of money so provided under any other enactment.
This Act may be cited as the Social Security (Incapacity for Work) Act 1994.
The other provisions of this Act come into force on such day as the Secretary of State may appoint by order made by statutory instrument, and different days may be appointed for different provisions and for different purposes.
Section 14 above, subsections (1) and (2) above and this subsection extend to Northern Ireland, but otherwise this Act does not extend there.
Consequential amendments
Amendments of the Contributions and Benefits Act
In section 4 of the Social Security Contributions and Benefits Act 1992 (payments treated as remuneration and earnings), in subsection (3) (meaning of “sickness payment") omit the words “within the meaning of section 57 below".
Section 20 of the Social Security Contributions and Benefits Act 1992 (descriptions of contributory benefits) is amended as follows.
In subsection (1) (list of benefits), for paragraphs (b) and (c) substitute—.
In subsection (2)—
in the definition of “long-term benefit" for paragraph (a) substitute—;
in the definition of “short-term benefit" for paragraph (b) substitute—.
Section 21 of the Social Security Contributions and Benefits Act 1992 (contribution conditions) is amended as follows.
In subsection (1) (benefits which are subject to contribution conditions being satisfied) for “other than invalidity benefit" substitute “ other than long-term incapacity benefit under section 30A below or short-term or long-term incapacity benefit under section 40 or 41 below ”.
In subsection (2), in the first part of the table (classes of contributions relevant in relation to benefits), for “Sickness benefit" substitute “ Short-term incapacity benefit under section 30A below ”.
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For section 40 of the Social Security Contributions and Benefits Act 1992 (invalidity pension for widows) substitute—.
For section 41 of the Social Security Contributions and Benefits Act 1992 (invalidity pension for widowers) substitute—.
For section 42 of the Social Security Contributions and Benefits Act 1992 (entitlement to invalidity pension on termination of employment after period of entitlement to disability working allowance) substitute—.
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In section 46 of the Social Security Contributions and Benefits Act 1992 (modifications of section 45 for calculating additional pension in certain cases), omit—
subsection (1); and
in subsection (2), the words “or 41(4)".
In section 47 of the Social Security Contributions and Benefits Act 1992 (increase of Category A retirement pension for invalidity), in subsections (1) and (5) for “invalidity allowance" substitute “ age addition to long-term incapacity benefit by virtue of regulations under section 30B(7) above ”.
Omit section 57 of the Social Security Contributions and Benefits Act 1992 (determination of days for which benefit is payable).
Omit section 58 of the Social Security Contributions and Benefits Act 1992 (incapacity for work: work as councillor to be disregarded).
Omit section 59 of the Social Security Contributions and Benefits Act 1992 (invalidity benefit: disqualifications, &c.).
Section 61 of the Social Security Contributions and Benefits Act 1992 (exclusion of increase of benefit in case of failure to satisfy contribution conditions) is amended as follows.
In subsection (2) for paragraph (b) substitute—.
In the same subsection omit—
paragraph (c) and the word “or" preceding it; and
the words “or invalidity pension" (twice).
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Omit section 86 of the Social Security Contributions and Benefits Act 1992 (increase of wife’s invalidity pension for dependent husband).
Section 87 of the Social Security Contributions and Benefits Act 1992 (rate of increase where associated retirement pension is attributable to reduced contributions) is amended as follows.
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For the words in subsection (1) following paragraph (b) substitute— “ the amount of any increase of the benefit attributable to sections 82 to 86A above shall be determined in accordance with regulations under this section. ”.
For section 88 of the Social Security Contributions and Benefits Act 1992 (pension increases to be in respect of only one adult dependant) substitute—.
In section 89 of the Social Security Contributions and Benefits Act 1992 (references to earnings to include occupational and personal pensions) for “sections 82 to 86 above" substitute “ sections 82 to 86A above, and in regulations under section 86A above, ”.
In section 91(1) of the Social Security Contributions and Benefits Act 1992 (effect of trade disputes on entitlement to increases: increases to which section applies), in paragraph (a) for “under sections 82 to 88 above" substitute “ under or by virtue of sections 82 to 88 above ”.
In section 93 of the Social Security Contributions and Benefits Act 1992 (dependency increases on termination of employment after period of entitlement to disability working allowance)—
for paragraph (a) substitute—;
in paragraph (b) and the closing words for “pension or" (four times) substitute “ benefit or ”.
Omit section 102 of the Social Security Contributions and Benefits Act 1992 (sickness benefit in respect of industrial injury).
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In section 126(1) of the Social Security Contributions and Benefits Act 1992 (income support: trade disputes), in the closing words, omit “by reason of disease or bodily or mental disablement".
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In section 150(1) of the Social Security Contributions and Benefits Act 1992 (qualifying benefits for purposes of Christmas bonus for pensioners), for paragraph (b) substitute—.
In section 151(4) of the Social Security Contributions and Benefits Act 1992 (employer’s liability to pay statutory sick pay: days to be treated as days of incapacity for work), for the words from “a day shall not be treated as a day" to “unless on that day" substitute “ a day of incapacity for work in relation to a contract of service means a day on which ”.
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Schedule 3 to the Social Security Contributions and Benefits Act 1992 (contribution conditions for entitlement to benefit) is amended as follows.
In paragraph 2(6)(b) (meaning of “relevant benefit year" for purposes of contribution conditions for short-term incapacity benefit), for “period of interruption of employment" substitute “ period of incapacity for work ”.
In paragraph 5(6) (widowed mother’s allowance, widow’s pension and Category A and B retirement pensions), for “an invalidity pension" substitute “ long-term incapacity benefit ”.
In paragraph 8 (persons deemed to satisfy contribution conditions by virtue of entitlement to another short-term benefit) for “sickness benefit" (twice) substitute “ short-term incapacity benefit ”.
In Schedule 4 to the Social Security Contributions and Benefits Act 1992 (rates of benefit, &c.)—
in Part I (contributory periodical benefits), omit paragraph 3; and
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Schedule 7 to the Social Security Contributions and Benefits Act 1992 (industrial injuries benefits) is amended as follows.
In paragraph 3 (restriction on increase of unemployability supplement)—
in sub-paragraph (2) omit “or an invalidity pension"; and
in sub-paragraph (3) omit “or invalidity pension".
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In Part I of Schedule 8 to the Social Security Contributions and Benefits Act 1992 (workmen’s compensation and industrial diseases benefit in respect of employment before 5th July 1948: nature and amount of benefit under industrial diseases benefit schemes), in paragraph 6(4)(d)—
for “section 82" substitute “ section 86A ”; and
for “sickness benefit" substitute “ short-term incapacity benefit ”.
Schedule 11 to the Social Security Contributions and Benefits Act 1992 (circumstances in which entitlement to statutory sick pay does not arise) is amended as follows.
In paragraph 2, for sub-paragraphs (d) and (e) substitute—.
Omit paragraph 5.
Schedule 12 to the Social Security Contributions and Benefits Act 1992 (relationship of statutory sick pay with benefits and other payments, &c.) is amended as follows.
In paragraph 1 (day of entitlement to statutory sick pay not to count as day of incapacity for work for certain purposes), after “period of interruption of employment" insert “ for the purposes of unemployment benefit or a period of incapacity for work for the purposes of incapacity benefit ”.
For paragraphs 3 and 4 (sickness benefit) substitute—.
For paragraph 5 substitute—.
Schedule 13 to the Social Security Contributions and Benefits Act 1992 (relationship between statutory maternity pay and other benefits) is amended as follows.
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For paragraph 2 (invalidity) substitute—.
Amendments of the Administration Act and other enactments
Social Security Administration Act 1992 (c.5)
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In section 130 of the Social Security Administration Act 1992 (duties of employers: statutory sick pay and claims for other benefits), in subsection (1) (claims for purposes of which information may be required)—
for paragraph (a) substitute—; and
for paragraph (c) substitute—.
In section 132 of the Social Security Administration Act 1992 (duties of employers: statutory maternity pay and claims for other benefits), in subsection (1) (claims for purposes of which information may be required)—
in paragraph (b) for “sickness benefit" substitute “ short-term incapacity benefit ”; and
in paragraph (c) for “invalidity pension under section 33" substitute “ long-term incapacity benefit under section 30A ”.
In section 170 of the Social Security Administration Act 1992 (Social Security Advisory Committee) in the definition of “relevant enactments" in subsection (5), for “and this Act" substitute “ , this Act and the Social Security (Incapacity for Work) Act 1994 ”.
In section 191 of the Social Security Administration Act 1992 (interpretation: general), omit the definition of “invalidity benefit".
In Schedule 2 to the Social Security Administration Act 1992 (supplementary provisions with respect to tribunals, &c.), in paragraph 7(2) (persons to whom remuneration and travelling and other allowances may be paid), after paragraph (a) insert—.
Employment Protection (Consolidation) Act 1978 (c.44)
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Criminal Justice Act 1991 (c.53)
In section 24(4) of the Criminal Justice Act 1991 (recovery of fines, &c. by deduction from income support: interpretation), in the definition of “income support" for “sickness or invalidity" substitute “or incapacity".
Pension Schemes Act 1993 (c.48)
Section 46 of the Pension Schemes Act 1993 (effect of entitlement to guaranteed minimum pensions on payment of social security benefits) is amended as follows.
In subsection (1), for “, a widow’s pension or a widower’s invalidity pension" substitute “ or a widow’s pension ”.
Omit subsection (2).
For subsection (3) substitute—.
In subsection (6), omit paragraph (b)(i).
In subsection (8), omit paragraph (a) and the word “and" immediately following it.
Omit subsection (9).
In section 47(1) of the Pension Schemes Act 1993 (further provisions concerning entitlement to guaranteed minimum pensions for the purposes of section 46), omit the words from “in any case" to “construed".
In section 48(2) of the Pension Schemes Act 1993 (reduced benefits where minimum payments or minimum contributions paid), for “sections 34(4) and" substitute “ section ”.
Repeals