The Minister for Employment (Jo Churchill)

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It gives me great pleasure to confirm that the Government give their full support to this private Member’s Bill. I thank my hon. Friend the Member for Tewkesbury (Mr Robertson) for bringing forward what he said was a small and limited piece of legislation, but we have heard over the past hour and a bit how important these small changes will be to those affected. I thank my hon. Friend the Member for North East Bedfordshire (Richard Fuller), my right hon. Friends the Members for East Yorkshire (Sir Greg Knight) and for Ludlow (Philip Dunne), and my hon. Friends the Members for Stoke-on-Trent Central (Jo Gideon), for Shipley (Philip Davies) and for Aylesbury (Rob Butler) for their contributions.

My hon. Friend the Member for Shipley explained why the alignment is ultimately a good idea. As we have heard, a life-limiting illness can cause unimaginable suffering for the patient and their loved ones—and that is just at diagnosis, yet alone across the trajectory of the disease. Many people have said that they feel as though they have been hit by an emotional tsunami, and we should do anything we can to help and support those nearing the end of life. My hon. Friend the Member for Stoke-on-Trent Central poignantly outlined some of the challenges that people can face at this stage in their life.

Many charities have been mentioned, but I pay particular tribute to Marie Curie, which often provides nurses who sit with people as they near the end of life. It is an incredible service for our constituents, and ensures that people do not die alone. Its work is incredibly important—its motor neurone disease campaign has been mentioned—but we must also thank people in the hospice sector and more broadly across the NHS, particularly those who work in end-of-life and palliative care.

We have heard much about the Social Security (Special Rules for End of Life) Act 2022, which changed the special rules process to allow simple and fast access to financial support through the benefit system. The changes made in the Act covered the disability living allowance, the personal independence payment and the attendance allowance, and ensured that people at this most difficult of times could receive their support more quickly and easily. The special rules were then extended to universal credit and employment and support allowance through secondary legislation that came into force on 4 April 2022. Under those rules, claims are fast-tracked and a medical assessment is not required. No waiting period is applied, and in the majority of cases the highest level of benefit is awarded. Since 1990, eligibility under the special rules had been limited to those who had been diagnosed with a condition that meant that they were unlikely to live for more than six months. The changes that the Government made in 2022 meant that people receiving certain social security benefits who were thought to be in the final year of their life were shown additional compassion and were able to receive that vital support six months earlier.

When the 2022 regulations came into force, they were welcomed by key end-of-life charities such as the Motor Neurone Disease Association, whose chief executive said at the time:

“I welcome the announcement that changes to the Special Rules will come into force next month. This change will enable more people living with complex and unpredictable terminal illness like motor neurone disease to access the support they need swiftly and sensitively. This is an important first step and we hope that this positive change can be enacted for other applicable benefits as soon as possible.”

Marie Curie also welcomed the changes, saying that they would

“make it easier for terminally ill people to access support quickly”,

and that

“the scrapping of the six-month rule for fast track access to benefits is a significant step forward.”

Macmillan Cancer Support said:

“Patients deserve better co-ordination of care into the last year(s) of life and this change gives us a brilliant opportunity to help them benefit from end of life financial support while having treatment, so they can make the most of the last year(s) of life.”

This Bill takes a further step in supporting those with a terminal illness by extending similar support through compensation payments made by the Pension Protection Fund and payments under the financial assistance scheme. As my hon. Friend the Member for Tewkesbury explained, the Pension Protection Fund pays compensation to members of eligible defined benefit pension schemes if the sponsoring employer became insolvent on or after 6 April 2005 and the scheme has insufficient assets to meet its pension liabilities. Members can claim their compensation payments before their scheme’s normal pension age, generally from the age of 55. The financial assistance scheme makes payments to members of qualifying schemes that are unable to meet their pension liabilities in full.

Currently, members of the PPF who are not yet entitled to receive compensation may make an application to their scheme for a terminal illness payment if they are expected to live for six months or less. Terminal illness is currently defined in legislation as

“if... the person’s death in consequence of that disease can reasonably be expected within 6 months.”

The Bill amends that definition to ensure that members with a life expectancy of up to 12 months can now receive the payments. It will restore the original policy intention of alignment between the social security special rules and the Pension Protection Fund. The same definition applies to the financial assistance scheme, and the Bill therefore amends that definition as well. The financial assistance scheme differs from the PPF in that a terminal illness diagnosis allows payments from the financial assistance scheme to be put in place immediately, rather than a specific lump sum being provided.

My right hon. Friend the Member for East Yorkshire and my hon. Friend the Member for North East Bedfordshire asked what consultation we had carried out. As I think my hon. Friend the Member for Shipley mentioned, we have consulted general practitioners, consultants, specialist nurses and other medical professionals.

Some may argue that the Government should take a more open-ended approach and not put any time limit on the payments. That argument, as we have heard, may be particularly pertinent for those who have conditions such as motor neurone disease, chronic obstructive pulmonary disease, Parkinson’s disease and a plethora of other conditions that can make it exceedingly difficult for clinicians and doctors to accurately predict how much time a patient has until the end of their life.

Unfortunately, there is not a clearcut, correct answer on how terminal illnesses should be defined, so as my hon. Friend the Member for Tewkesbury said, that should be left to the professionals. In recognition of that, the 2022 Act was preceded by an evaluation in which the majority of clinicians who responded said that a 12-month definition was preferable, as it would bring the special rules for benefits into line with NHS practice and NHS initiatives, such as the gold standards framework. The Department agreed, and the 2022 legislation aligned the definition of terminal illness with that used in the NHS, providing consistency for clinicians and tying the special rules into the NHS long-term plan to provide proactive, personalised and well co-ordinated care for all those in their final year of life.

This Bill builds on the previous legislation by aligning the definition used for the Pension Protection Fund and financial assistance scheme payments with that used more widely in the Department for Work and Pensions and the NHS. The Government believe that the 12-month timeframe is appropriate for defining the period for serious ill health payments in tax law. For an individual to meet the definition of a person in serious ill health, evidence is required from a registered medical practitioner that the individual is expected to live for less than one year.

The Pension Protection Fund may be a compensation scheme, rather than a pension scheme, but in many ways it is treated as a pension scheme for taxation purposes. That means that the Pension Protection Fund terminal illness payment falls under the category of a serious ill health lump sum. That allows it to be paid without triggering unauthorised payment tax charges on either the individual or the Pension Protection Fund. Extending the definition of terminal illness to longer than a year would open up members to significant tax charges on their terminal illness payments, which is not what the Government want at all.

My hon. Friend the Member for North East Bedfordshire asked about the impact on the levy. We believe that the cost to the Pension Protection Fund will be marginal. Most members will simply get their payments earlier. He also asked about pension funds having a 12-month provision. The benefits provided will depend on scheme rules. We do not know how many schemes have such a provision, but we believe that many schemes already provide early access to lump sums for terminally ill members, or those with a life expectancy of 12 months or less, because that is allowed under tax law.

My hon. Friend the Member for Shipley and my right hon. Friend the Member for East Yorkshire asked about commencement. As with any Bill that passes through both Houses, it will come into force on a day appointed by the Secretary of State. It is the intention for that to be as soon as practicable after Royal Assent, to ensure that all measures relating to the Pension Protection Fund and financial assistance scheme come in at the same time.

I heard that my right hon. Friend the Member for Ludlow had written to the Secretary of State, and I will make sure that an answer comes to him in a timely way. He asked who makes the decisions; the answer is clinicians, medical assessors and specialist nurses. In response to my right hon. Friend the Member for East Yorkshire, let me say that one can obtain a second opinion, and that goes for all the illnesses that I mentioned.

I thank all hon. and right hon. Members for their contributions, and for the sensitive way in which they have approached this matter. I appreciate the “time-bound” argument that my hon. Friend the Member for Shipley put forward, but these matters are always a challenge for clinicians. I agree with him and my hon. Friend the Member for Stoke-on-Trent Central that a better conversation about end of life, and how we treat issues as we move forward into that stage of our life, would be a very good thing for us all. We should be a lot more discussive about it.

I thank my hon. Friend the Member for Tewkesbury for bringing forward the Bill and all right hon. and hon. Members for their contributions. These changes will make a significant, positive impact for people nearing the end of their lives by ensuring that most pension fund members will be able to receive a payment at an earlier stage. That will give them the financial support they need at a most difficult time for them and their families, as well as help them plan more effectively to get the most out of the finances they are due. These changes send a message about end of life: that the conversation must be alive and vibrant for us all, so that we do the best we can. I am pleased to support the Bill and wish it a speedy passage through both Houses.

The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)

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It is a pleasure to serve under your chairship, Dame Siobhain. I thank my hon. Friend the Member for Tewkesbury for bringing forward this legislation; I should also thank my right hon. Friend the Member for Suffolk Coastal, the former Secretary of State for Work and Pensions, for paving the way.

This may seem a small and discrete piece of legislation, but it is very important. As my hon. Friend the Member for Tewkesbury explained, the Bill extends the definition of terminal illness for compensation payments made under both the Pension Protection Fund and the Financial Assistance Scheme. Members will be able to claim their compensation on the grounds of terminal illness if a medical professional confirms that they have less than 12 months to live, rather than the current six months. That will enable eligible members to receive the vital support of payments at an earlier point in their illness. The change restores the original policy intent of alignment between the social security special rules provisions and both the PPF and FAS. It will also bring those two schemes into line with the tax definition of “serious ill health”, which allows private pension schemes to make payments where the member has less than 12 months to live.

I will try to cover some of the issues raised today and on Second Reading. There was a particular concern on Second Reading as to whether people whose schemes were not in the PPF or FAS would have a similar opportunity. Although I cannot provide definitive numbers—I do not believe they actually exist—for serious ill health payments, one of the leading independent trustee firms, Dalriada, has confirmed that:

“Trustees may only make such payments in accordance with the provisions of their scheme’s trust deed and rules. In practice, most scheme rules do allow for such payments.”

Officials have also contacted the Association of Pension Lawyers, which collectively acts for many schemes of all sizes. It has confirmed that, in the experience of its members, most occupational pension schemes will have an option of a serious ill health lump sum payable on a discretionary basis.

We have also heard questions today, and as we did on Second Reading, about who would be making the decisions on terminal illness, and the range of those illnesses. I can confirm that those decisions will be made by healthcare professionals, such as clinicians and medical practitioners, who have had direct oversight of the individual concerned. Although there is no definitive list of what constitutes a terminal illness, I imagine that the provisions would certainly include illnesses such as advanced cancer, dementia, motor neurone disease, and other neurological diseases, such as Parkinson’s. However, in my view the definition does not exclude any particular range of conditions, because one’s lived experience of a condition is not determined by the label that we hang around our necks. I find that I have been saying that for 48 years of my life, frankly. We do not determine someone’s lived experience just by the name of their particular condition.

My hon. Friend the Minister for Employment was also asked on Second Reading whether fixed time limits were the right way to go, and whether there would be adequate training for clinicians and communication to make people aware of the changes. The Department engaged widely on time limits ahead of the Social Security (Special Rules for End of Life) Act 2022, and chose the 12-month approach specifically to align with the NHS definition of “end of life”, and to link up with existing initiatives for clinicians that encourage the identification of people in their final year of life. This Bill simply aligns the definition used for the PPF and the FAS with that used more widely by the DWP and the NHS.

As part of the preparations made ahead of the 2022 Act, the Department engaged extensively with senior clinicians from key medical organisations and hospices, as well as representatives from multiple charities and networks of welfare advisers. DWP bulletins were sent out by the British Medical Association, the Royal College of General Practitioners, the Royal College of Physicians, the Association for Palliative Medicine, Hospice UK and NHS England networks across the country. The Department also initiated plans to create a learning module for clinicians to raise awareness among the clinical community of the financial support available for those who are nearing the end of life. That learning module went live in February.

Assurances were also sought that the definition of a terminal illness would be consistent across the DWP. I can provide that assurance today. As the Minister for Employment said on Second Reading, this Bill builds on the previous legislation—which we have just heard about—which changed the special rules for social security benefits. The scope of that legislation limited the changes that we could make to social security benefits administered by the DWP, as they involved the fast-tracking of benefit claims. This final change brings payments made by the PPF and FAS into alignment with those changes.

As I mentioned a little earlier, this Bill aligns the PPF and FAS definition with the tax rules for serious ill health. That will ensure that the payments made by the PPF do not trigger unauthorised payment tax charges on either the PPF or the individual to whom the payments are made. If the definition was to be amended beyond 12 months, as some have suggested, members could have faced significant tax charges on their payments, which I am sure no one wishes to see happen.

I have noted the comments today from my right hon. Friends the Members for East Yorkshire and for Suffolk Coastal about the commencement of the provisions in the Bill. I can confirm today that the intention is for that to happen as soon as practicable after Royal Assent. I see no reason for delay or obfuscation. We have all agreed today that this is a vital piece of legislation that will benefit many of the most vulnerable in our society at the time they need help most, so I have no intention at all of delaying it.

Paul Maynard

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Given that the phrase I used was “as soon as practicable”, I can give that solemn undertaking. I would hate it if either scheme had some kink in its processes that might cause delay. I will do everything in my power to ensure that this is done as soon as possible. I meet the PPF regularly, and this will be on the agenda for the next meeting to make sure all its ducks are in a row, like all the Department’s are.

To conclude—

Paul Maynard

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I am grateful for that intervention, because I should have thought to start my speech by paying tribute to Frank Field and the immense amount of work he did in the Department for Work and Pensions. He was a thoughtful and humane man, respected on both sides of the House, and I am more than happy to join in paying tribute to him.

Being told that one is nearing the ends of one’s life can be a devastating and frightening experience. It is crucial that those reaching the final stages of their life do not have to worry as much about their finances and can focus on spending their time with the people who matter to them. The Bill takes us one step further toward ensuring that that can happen, building on the changes made back in 2022. I am grateful to my hon. Friend the Member for Tewkesbury for promoting the Bill, and I commend it to the Committee.

The Minister for Disabled People, Health and Work (Mims Davies)

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I thank my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) for her considered amendments, and for the reasoned arguments behind them. I know that she has been engaging extensively with our excellent officials at the DWP, whom she knows extremely well.

The hon. Member for Wallasey (Dame Angela Eagle) asked about innovations. My right hon. Friend is incredibly innovative, and I am not surprised that that is attracting attention. Let me also thank my hon. Friend the Member for Tewkesbury (Mr Robertson) for the attentive way in which he has listened to all this. As for the question of precedent, it is not unusual for Bills to have set commencement dates when we are sure that they can be commenced on the date in question. I hope that that reassures the hon. Lady.

I think we can all agree that we want the provisions in the Bill to be commenced with minimal delay. They are important, and will provide much-needed financial support up to six months earlier than is currently the case for those who have received the devastating news that they have a terminal illness. My right hon. Friend is clearly mindful of that following her own experience in the DWP, and it is what is driving these changes. They build on the work that the Department began in 2022, under her formidable and inspiring leadership. She will be only too well aware of the importance that the Department has placed on doing all that it can to help people at these difficult times.

The amendments are intended to ensure that the Bill specifies the point at which the provisions will come into force. They provide for this to be a period of four months after the Bill has received Royal Assent. Putting the commencement date on the face of the Bill would mean that the Secretary of State’s power to make regulations commencing the provisions, or transitional or saving provisions, would no longer be necessary, and amendments 2, 3, 5 and 6 seek to remove all those provisions. Similar amendments are made to the provisions covering Northern Ireland, and at this point it may be prudent to remind the House that the Northern Ireland Assembly has already provided a legislative consent order for the Bill as drafted. I hope that that reassures my right hon. Friend.

When the Bill was drafted towards the end of last year, it was unclear to the Department how quickly the Pension Protection Fund would be able to implement the changes. The decision to commence them via a commencement order gave the Department the flexibility to ensure that the fund was in a position to implement the new conditions at commencement, and that the corresponding changes to the Financial Assistance Scheme Regulations 2005 could be made at the same time. In Committee, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), was very clear about commencement, saying:

“I can confirm today that the intention is for that to happen as soon as practicable after Royal Assent. I see no reason for delay or obfuscation.” ––[Official Report, Pensions (Special Rules for End of Life) Public Bill Committee, 24 April 2024; c. 10.]

Hopefully we are all agreed, and can all be assured that we have absolutely no intention of creating any unnecessary delay in enacting these vital measures, which will make a massive difference to people at the most difficult time in their lives, and, indeed, to their families, bringing real comfort.

At the end of Committee stage on 24 April, officials from the Department sought further clarification from the Pension Protection Fund on how quickly it could implement the changes. Its response was very positive, and I want to put on record our appreciation for the work it has been undertaking. It has confirmed that its internal teams have been working towards having everything ready by the beginning of July, the earliest date on which the Bill could potentially have received Royal Assent. I therefore confirm to my right hon. Friend the Member for Suffolk Coastal that DWP officials have been in touch with their counterparts in the Department for Communities in Northern Ireland, who have helpfully confirmed that they do not envisage any problem with commencing the relevant Northern Ireland provisions in a timely manner to retain parity across the United Kingdom.

Notwithstanding the point made by the hon. Member for Wallasey, and with that in mind, I see no reason why the Department cannot meet the new requirement that the amendments will impose, and I have recommended that the Government do not oppose them. I thank my right hon. Friend for raising her concerns and bringing them to the House in the manner and the style that she did.

Amendment 1 agreed to.

Amendments made: 4, page 2, line 1, leave out from “force” to end of line 2 and insert—

“at the end of the period of four months beginning with the day on which this Act is passed.”

This amendment would bring the provisions of the Bill which extend only to Northern Ireland into force four months after Royal assent.

Amendment 2, page 2, line 5, leave out subsection (7)

This amendment is consequential on Amendment 1.

Amendment 5, page 2, line 7, leave out subsection (8).

This amendment is consequential on Amendment 4.

Amendment 3, page 2, line 10, leave out subsection (9).

This amendment is consequential on Amendment 1.

Amendment 6, page 2, line 12, leave out subsection (10) —(Dr Coffey.)

This amendment is consequential on Amendment 4.

Third Reading

Mims Davies

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I am very grateful to my hon. Friend the Member for Tewkesbury (Mr Robertson) for bringing this important legislation to the House and for the way he has successfully navigated it to this stage. I thank him for his important speech and insights on why the Bill matters, matched equally by those of my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken).

I thank the hon. Member for Wallasey (Dame Angela Eagle) for her support for the Bill. She asked why these regulations were not included in the 2022 Act. Unfortunately, they were out of scope as that Bill was altering entitlement conditions for benefits. I assure her my officials have said no other areas are in need of amending—I see that gets the thumbs up from the Opposition Dispatch Box. On consistent definition, the Bill will build on previous legislation that changed special rules for social security benefit. This final change brings the payments made by the Pension Protection Fund and financial assistance scheme into alignment with those changes.

I thank all Members who have taken part in the debates that have led the Bill to progress to this stage, including the Committee stage, and for the cross-party support it has rightly received. As has been outlined, the Bill builds on the 2022 changes the Government introduced to social security benefits. That legislation was welcomed by excellent key charities, such as Marie Curie, the Motor Neurone Disease Association and Macmillan Cancer Support. It changed the special rules for a number of benefits, ensuring claims were rightly fast tracked. Those who were thought to be in the final year of their life were able to receive vital financial support six months earlier.

This week is Dementia Action Week, bringing the UK together to take action on dementia and promoting an understanding of its impact. The Alzheimer’s Society and many groups and charities do so much on this important issue. I extend my thanks to them from the Dispatch Box.

By extending the definition of terminal illness from six to 12 months’ life expectancy for payments under both the Pension Protection Fund and the financial assistance scheme, the Bill completes the journey. The Bill will mean that members are able to rightly claim compensation on the ground of terminal illness, if a medical professional confirms that they have less than 12 months to live, rather than the current six months.

Hon. Members have spoken about the terrible time that people will be going through and the financial impact. There is often more financial assistance than perhaps people know, if they are not used to being part of the benefits arena. I urge people to look at the benefits calculator at gov.uk and to work with Citizens Advice, which runs our help to claim service, so that costs can be met and understood at a difficult time.

To assure the hon. Member for Wallasey, in my role as Minister for Disabled People, Health and Work, I met with the Minister for Energy Security and Net Zero, my hon. Friend the Member for North Swindon (Justin Tomlinson), this week to discuss costs and other matters concerning the national disability strategy and the disability action plan. As the hon. Lady said, the issue is at the forefront of my mind and we are aligned on those concerns.

Decisions on terminal illness will be made by healthcare professionals, such as clinicians and medical practitioners. We thank them for that great work at such a difficult time, as pointed out by my hon. Friend the Member for Tewkesbury. As we heard during Committee stage, the definition will include advanced cancer, dementia, motor neurone disease and other neurological diseases, such as Parkinson’s disease.

The changes restore the original policy intent of alignment between the social security special rules, and the Pension Protection Fund and financial assistance scheme terminal illness rules. Just as importantly, they bring both schemes in line with the tax definition of serious ill health, which currently allows private pension schemes to make payments when the member has less than 12 months to live. I will briefly reiterate what I said in the earlier debate on the amendments and repeat what the Minister for Pensions said in Committee: it was never our intention to delay the commencement of these provisions. There is no practical reason for us to do so. However, as discussed today, putting a commencement date on the face of the Bill will provide certainty around the change at a time when people value certainty, and we will ensure that the provisions can commence four months after Royal Assent, as signalled.

I do not want to detain the House any further. We know that being told you are nearing the end of your life can be a frightening experience not only for the individual concerned, but for their family and their loved ones. This Bill, although seemingly small, will have a really positive impact on those whom the provisions cover, at a very difficult time. As with the 2022 Act, the Bill will ensure that when someone reaches the final stages of life, they will not have those additional financial concerns. Receiving a payment at an earlier stage in their final illness will help those people to plan more effectively, providing them with the opportunity to focus on their time with the people who matter to them.

This debate gives me the opportunity to thank the St Peter & St James Hospice, the Hospice in the Weald, St Catherine’s Hospice in Pease Pottage, those local hospices that I am sure we all have, and those charities mentioned in this debate, who bring real comfort and support in all our constituencies at such difficult times. This Bill will help people to live well to the end, with their loved ones and with that comfort. I greatly thank my hon. Friend the Member for Tewkesbury for bringing the Bill forward. We all wish it safe and speedy passage through the other place, so that it can reach the statute book and support those who need it, our loved ones and people in our communities, with no undue delay.