Social Security (Uprating of Benefits) Bill 2019-21
Briefing on the Social Security (Uprating of Benefits) Bill 2019-21, which would enable uprating of the State Pension and the Pension Credit Guarantee in the event of earnings falling year-on-year in the three months to July 2020
The Social Security (Uprating of Benefits) Bill 186 2019-21 was published on 23 September 2020 and is scheduled to go through all its House of Commons stages on 1 October 2020.
Its purpose is to enable the uprating in 2021/22 of: the basic State Pension: the full rate of the new State Pension: the Standard Minimum Guarantee in Pension Credit: and, survivors’ benefits in Industrial Death Benefit.
Without the Bill, it will probably not be possible to increase these benefit and pension rates next year. That is because the Social Security Administration Act 1992, which the Bill will amend, prevents the Secretary of State from bringing forward an Uprating Order where earnings growth is negative. Evidence from the Office for National Statistics (ONS) indicates that earnings fell by -1.0% year-on-year in the three months to July 2020 as a result of the pandemic. The ONS will confirm or amend this in its next release due on 13 October 2020.
The Government says that the Bill will allow it to meet the requirements of the ‘triple lock’: a commitment from the Government to increasing the state pension in line with wages, earnings, or 2.5%, whichever is higher. (Bill 186 2019-21-EN, paras 1-5).
The Bill will only amend the Act as it applies to a review of earnings conducted this year (Bill 186 2019-21-EN, para 23-25).
The amounts by which social security benefits and the State Pension will ultimately increase in April 2021 will be announced in November, in order to meet hard IT delivery deadlines (Bill 186 2019-21-EN, paras 1-5). The announcement will follow a review by the Secretary of State in mid-October based on inflation data for September and earnings data for the three months to July.
Further background can be found in the following Library Briefing Papers: Benefit uprating 2020 CBP 8806, April 2020; State Pension Uprating CBP 5649, April 2020; and State Pension triple lock, CBP 7812, June 2020.