Annulment Motion

With the compliments of the British Age Pensioner Alliance

One of our strategies is to attempt to have the annual Social Security Uprating regulations annulled. Our target is the regulation which re-imposes the freezing regime every year.

Here is an example:

That an humble Address be presented to Her Majesty, praying that the Social Security Benefits Up-rating Regulations 2008 (S.I., 2008, No. 667), dated 9th March 2008, a copy of which was laid before this House on 13th March, be annulled.

There is a lot of misunderstanding about the effect of an annulment motion. People fear that if the annulment is carried we will only get uprating from the present level. For example, a man with a pension of £10 per week would get a rise of only 39 pence, even though he had contributed all his life.

Here are the reasons why I think that this fear is groundless.

(The figures here are based on the 2007 Uprating order. Although the figures have  changed since then the pattern and principles are the same)

The 2007 Uprating order, in respect of basic pension, said  for "£84.25" substitute "£87.30".
 
It does not say "the basic pension shall be increased by £3.05" nor does it say "the basic pension shall be increased by 3.6%". it is in fact saying "the basic pension shall be £87.30". (Of course, people with an incomplete contribution record would get a proportion of this.)
 
Section 44(4) of the Social Security Contributions and Benefits Act 1992 originally said "The weekly rate of the basic pension shall be £54.15". With all the later amendments (uprates) it now says "The weekly rate of the basic pension shall be £87.30".
 
Nevertheless we should have a look and see what the Regulations say.

Regulation 5 of the Social Security Benefit (Persons Abroad) Regulations 1975 (application of disqualification in respect of up-rating of benefit) shall apply to any additional benefit payable by virtue of the Up-rating Order.

 
What are the words of Regulation 5?
 

-            Regulation 5(7) – “…a person who…is not ordinarily resident in Great Britain shall, while absent from Great Britain, receive benefit at the same rate as previously…the amount appropriate to that person when he was last ordinarily resident in Great Britain…”

 

What this reg says is "you won't get the rate set out in the uprating order, you will only get the rate you got when last resident." If clause 3 of the annual regulations is annulled, then we will get the current rate instead of the rate that applied when we were last resident in Great Britain.

The increase set out in the Uprating Order is not an increase by so-much, nor by so-much percent. It is a straight substitution.

 
In respect of Graduated Retirement Benefit the Uprating Order says:
 
(a) the sum of 10.20 pence shall be increased by 3.6 per cent.; and

(b) from and including 9th April 2007 the reference in that provision to that sum shall have effect as a reference to 10.57 pence.
 
So although it uses 3.6% it translates that into 10.57 pence. The conversion rate for grb units shall be 10.57 pence. It does not say that grb pensions shall be increased by 3.6%. So if the freezing was lifted, all grb units would be converted at 10.57 pence.

Again a straight substitution.

 
For SERPS it does say increased by 3.6%, so maybe existing SERPS pensions would be increased only by 3.6%. But that would create an administrative nightmare for DWP.
 
So maybe an annulment prayer would have the effect that we want.

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