My Lords, the amendment tabled by the noble Baroness, Lady Hollis, concerns the position of spouses or civil partners of service personnel who accompany them on overseas postings, a group in which I know the noble Baroness has a keen interest. The amendment would enable people in this position to be credited with national insurance contributions for the full 10 tax years between 2000-01 and 2009-10.
We have already taken steps to shore up the contribution records of this group. In 2010, arrangements were put in place to allow the spouses of Armed Forces personnel to gain a national insurance credit for time spent accompanying their spouse or civil partner on postings abroad. These credits are awarded for tax years from 2010-11 and provide entitlement to all contributory benefits, including the state pension. Their main purpose was to provide access to contributory working-age benefits to spouses and partners who might have difficulty in finding employment when they return home. I confirm to the noble Lord, Lord McKenzie, that no changes are planned to those crediting arrangements.
The amendment would enable a person to meet the minimum qualifying period for the new state pension and therefore qualify for a reduced single-tier pension. However, if we were to combine the qualifying years that could be gained under the 2010 credits with those available under this amendment, a person could be credited with up to 16 qualifying years.
We should caution that the existing arrangements incur administrative costs for HM Revenue and Customs and the Ministry of Defence. Applications for the existing national insurance credits need to be validated by service welfare officers and processed by HMRC. Similar arrangements would need to be put in place for these new credits, but that would involve more onerous administration because any validation would relate to periods some years past.
The noble Lord, Lord Browne, made a point about difficulties with take-up of the current credits. We are not aware of any difficulties but, on the back of his concern, we will check with the MoD on that.
Currently, around 500 to 600 people a year have been awarded the credits that have been in place since 2010, but it is unclear how many are likely to benefit for pension purposes from the noble Baroness’s proposed retrospection measure.