Pensions (Special Rules for End of Life) Bill

Jo Churchill Excerpts

2nd reading
Friday 2nd February 2024 Commons Chamber

[The Minister for Employment (Jo Churchill)]

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.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Mr Laurence Robertson to wind up, with the leave of the House.