Pensions Bill

I am very happy to respond to Amendment No. 13. Noble Lords will already be aware that home responsibilities protection is currently awarded to a parent or person who is in receipt of child benefit, in order to protect pension entitlement. Currently, a person who is awarded child benefit can ask for it to be transferred to their partner. However, the individual must apply to transfer the child benefit award so that the transfer is completed within the first three months of a tax year—6 April to 6 July—to qualify for HRP for that year. As the noble Lord stressed, legislation does not allow the protection to be awarded retrospectively. In most cases, that operates successfully, but we are aware of a small number of cases in which a non-working parent misses out on HRP because their working partner receives child benefit. But for those affected—we have heard of only 80 appeals for 2005-06, which is a small number—the negative consequences on basic state pension entitlement can be severe. With the proposed replacement of HRP with weekly credits from 2010, the situation could be exacerbated because, unlike HRP, credits will count positively to benefit entitlement. To mitigate the effects, we intend to allow the new contributions credits to be utilised by the partner or parent who actually needs them; for example, in cases where the person awarded child benefit also has contributions from earnings but their partner does not. That measure was announced at Second Reading in the other place by my honourable friend, James Purnell, Minister for Pensions Reform. We made it clear in the delegated powers memorandum that the power to define those ““engaged in caring”” will be used to provide that important safeguarding measure for parents. It would apply to those reaching state pension age from 6 April 2010, the proposed start date of the coverage reforms. That safeguarding measure would allow HMRC, which administers child benefit, to deem that a parent is entitled to contributions credits throughout or for any part of a tax year in which they have a deficient contribution record if their partner, who was awarded child benefit, has a full contribution record for that year derived from paid or credited contributions and does not need the credits themselves. However, we will also extend the existing HRP regulations to ensure that the non-working partner can benefit from HRP awarded prior to 2010. The onus will be on the individual to tell us, either before or following the calculation of someone’s state pension entitlement, that their partner should have been awarded child benefit. The customer will need to inform the Pension Service or HMRC that the wrong partner was allocated child benefit. They will also be required to provide supporting evidence, either before or following calculation of benefit entitlement, within the normal time limits. We will be working with HMRC to ensure that people are made aware of the new provision and how it may affect individuals’ pension entitlement. While I am on my feet, and if I may be a little cheeky, I want to clarify a point about carers allowance. To be absolutely clear and put the question beyond doubt I should say that carers allowance, along with other social security benefits, can be paid only to people over 16. If I may slip back to another discussion, the Committee may be interested to know that the national carers strategy review has prioritised services for young carers and the setting of specific commitments to improve support for young carers. I thought that it would be helpful to the Committee to know that. Given the information that I have provided, I hope that the noble Lord will feel able to withdraw the amendment.