Summary of New Pensions and Care Bills
Pensions Bill
The shake-up of the UK pensions system under the Coalition Government continued with the announcement of a third Pensions Bill in three years
Following a draft Bill and scrutiny from Parliament’s Work and Pensions Select Committee, little is expected to have changed in the Bill when it is finally published over the coming weeks – though the Committeewill be looking for clarity around the end of contracting out and on how the forthcoming changes will be communicated to the public
The main elements of the Bill are:
A new single-tier state pension. The current state pension system (the basic state pension and the additional state pension) will be replaced with a new‘simpler’ single tier (flat rate) state pension. It will be introduced for those reaching retirement age after April, 2016
Changes to the state pension age. Two measures introduced:
- Bring forward the increase to state pension age to 67 by eight years, to take place between 2026 – 2028; and a regular review of state pension age. The draft Bill proposed a review every five years, with the first review taking place in the next parliament
- Introduce a system for automatic transfer of small pension pots and abolishing short service refunds: A framework for a system of automatic transfers so that an individual’s pension pot will follow them to their new pension scheme when they change jobs. It also provides for abolition of short-service refunds for defined contributions trust-based schemes for people who leave a scheme within two years.
New objective for the pensions regulator: A new statutory objective for the Pensions Regulator to consider minimising any impact on the sustainable growth of sponsoring employers
New bereavement support payment: Introduction of the Bereavement Support Payment – a single benefit to support people following bereavement
Care Bill
Governance and provision of adult care and support in England will be radically over-hauled in the Care Bill
The Bill comes after years of public debate around a cap on lifetime care costs and the recommendations of the Dilnot Commission
It will be a complex piece of legislation which involves the setting up of the assessment process which decides what costs are covered by the NHS and which are covered by the individual
The main elements of the Bill are:
A new single law: Introduce a modern law for adult care and support that replaces existing and outdated legislation which is more than sixty years old.
Reform of care and support funding: Ensure no one has to sell their home to pay for residential care
Introduce a cap on care costs: (announced at the 2013 Budget to be £72,000), and extend the means test threshold for financial assistance
Revised remit for local councils: Enshrine a right for carers in England to receive support from their local council. For the first time introduce a duty to meet carers’ eligible needs for support, and introduce a new adult safeguarding framework. Also ensure people needing care can move between local authority areas without fear that their care will be interrupted.
New public bodies: The establishment through the Bill of Health Education England and the Health Research Authority as non-departmental public bodies will strengthen education and training for healthcare professionals, and promote the interests of people in health and social care research.
Protecting individual care plans: Clarify how people will be protected from their care being disrupted if their provider goes out of business; and introduce a new oversight to the providers that would be the most difficult to replace if they were to fail
With thanks to the Cicero Group. You can read their full report here
