Commentary on Sections Sections 1 to 4: Entitlement and amount Section 1: Entitlement
35.Section 1 provides for a new social security benefit called State Pension Credit (“Pension Credit”) to be payable in accordance with the Act (subsection (1) ).
36.Pension Credit consists of two elements, known as "guarantee credit" and "savings credit". A claimant may be entitled to either or both of those elements (subsection (3)).
37.The purpose of the guarantee credit is to ensure that the claimant has income equal to at least the amount of the "standard minimum guarantee" which, in 2003, is expected to be around £100 for a person who is not a member of a couple (a “single person”) and £154 for a married or unmarried couple (a "couple").
38.The purpose of the savings credit is to provide claimants with a reward for having made some modest provision for retirement above the basic state pension.
39.The guarantee credit and the savings credit each have conditions of entitlement, but two of the conditions are common to both.
40.The first of the common conditions is that the claimant must be in Great Britain (subsection (2)(a)). That condition is the subject of two regulation-making powers set out in subsection (5).
41.Subsection (5)(a) confers power to make provision by regulations as to the circumstances in which a person is to be treated as being in Great Britain. The intention is to exercise the power so that the claimant has to be habitually resident in Great Britain if he is to qualify, which is currently the position with Income Support and income-based Jobseeker's Allowance.
42.Subsection (5)(b) confers power to make provision by regulations for continuing a person's entitlement to Pension Credit during periods of temporary absence from Great Britain. The intention is to continue the current Income Support rules which allow for entitlement to continue for four, and exceptionally eight, week periods abroad.
43.The second of the common conditions is that the claimant must have attained the "qualifying age" for Pension Credit (subsection (2)(b)).
44.The "qualifying age" is defined in subsection (6) (as read with the definition of "pensionable age" in section 17(1)) so that it means, for both men and women, the age which is pensionable age for a woman. That age is currently 60, but between 2010 and 2020 will steadily rise until it reaches 65, the same as pensionable age for a man. The legislation effecting the equalisation of the pensionable ages for men and women is in Part 1 of Schedule 4 to the Pensions Act 1995.
45.In addition to the two common conditions, the claimant must satisfy the further conditions set out in section 2(1) for the guarantee credit or section 3(1) and (2) for the savings credit.
46.Subsection (3) provides for the amount to which the successful claimant is entitled to be found in accordance with section 2 for the guarantee credit (paragraph (a)) and section 3 for the savings credit (paragraph (b)).