Social Security Act 1986

5(1)The following section shall be inserted after section 59—

“59AReduced earnings allowance.

(1)Subject to the provisions of this Part of this Act, an employed earner shall be entitled to reduced earnings allowance if—

(a)he is entitled to a disablement pension or would be so entitled if that pension were payable where disablement is assessed at not less than 1 per cent.;

(b)as a result of the relevant loss of faculty, he is either—

(i)incapable, and likely to remain permanently incapable, of following his regular occupation; and

(ii)incapable of following employment of an equivalent standard which is suitable in his case,

or is, and has at all times since the end of the period of 90 days referred to in section 57(4) above been, incapable of following that occupation or any such employment.

(2)The Secretary of State may by regulations provide that in prescribed circumstances employed earner's employment in which a claimant was engaged when the relevant accident took place but which was not his regular occupation is to be treated as if it had been his regular occupation.

(3)In subsection (1) above—

(a)references to a person's regular occupation are to be taken as not including any subsidiary occupation, except to the extent that they fall to be treated as including such an occupation by virtue of regulations under subsection (2) above ; and

(b)employment of an equivalent standard is to be taken as not including employment other than employed earner's employment;

and in assessing the standard of remuneration in any employment, including a person's regular occupation, regard is to be had to his reasonable prospect of advancement.

(4)For the purposes of this section a person's regular occupation is to be treated as extending to and including employment in the capacities to which the persons in that occupation (or a class or description of them to which he belonged at the time of the relevant accident) are in the normal course advanced, and to which, if he had continued to follow that occupation without having suffered the relevant loss of faculty, he would have had at least the normal prospects of advancement; and so long as he is, as a result of the relevant loss of faculty, deprived in whole or in part of those prospects, he is to be treated as incapable of following that occupation.

(5)Regulations may for the purposes of this section provide that a person is not to be treated as capable of following an occupation or employment merely because of his working thereat during a period of trial or for purposes of rehabilitation or training or in other prescribed circumstances.

(6)Reduced earnings allowance shall be awarded—

(a)for such period as may be determined at the time of the award ; and

(b)if at the end of that period the beneficiary submits a fresh claim for the allowance, for such further period as may be determined.

(7)The award may not be for a period longer than the period to be taken into account under paragraph 4 or 4A of Schedule 8 to this Act.

(8)Reduced earnings allowance shall be payable at a rate determined by reference to the beneficiary's probable standard of remuneration during the period for which it is granted in any employed earner's employments which are suitable in his case and which he is likely to be capable of following as compared with that in the relevant occupation, but in no case at a rate higher than 40 per cent, of the maximum rate of a disablement pension or at a rate such that the aggregate of disablement pension and reduced earnings allowance awarded to the beneficiary exceeds 140 per cent, of the maximum rate of a disablement pension.

(9)In subsection (8) above " the relevant occupation " means—

(a)in relation to a person who is entitled to reduced earnings allowance by virtue of regulations under subsection (2) above, the occupation in which he was engaged when the relevant accident took place; and

(b)in relation to any other person who is entitled to reduced earnings allowance, his regular occupation within the meaning of subsection (1) above.

(10)On any award except the first the probable standard of his remuneration shall be determined in such manner as may be prescribed ; and, without prejudice to the generality of this subsection, regulations may provide in prescribed circumstances for the probable standard of remuneration to be determined by reference—

(a)to the standard determined at the time of the last previous award of reduced earnings allowance ; and

(b)to scales or indices of earnings in a particular industry or description of industries or any other data relating to such earnings.

(11)A person who—

(a)attains pensionable age after this section comes into force; and

(b)has retired from regular employment before that day; and

(c)was entitled to reduced earnings allowance on the day immediately before he retired from regular employment,

shall be treated as entitled as from the day on which he retires from regular employment to reduced earnings allowance at a rate not higher at any time than that at which the allowance was payable to him immediately before he retired from regular employment.”.

(2)Section 60 (increase of disablement pension for special hardship) shall cease to have effect.

(3)A person who—

(a)is over pensionable age on the day on which this paragraph comes into force ; and

(b)has retired from regular employment before that day ; and

(c)was entitled on the day immediately before that day to an increase under section 60,

shall be treated as entitled as from the day on which this paragraph comes into force to reduced earnings allowance at a rate not higher at any time than that at which the increase was payable to him immediately before that day.

(4)Where for any period commencing before 6th April 1987 a person is entitled both to reduced earnings allowance under section 59A and to an additional pension of a long-term benefit or, if the long-term benefit is invalidity pension, to either an invalidity allowance or an additional pension, or both, his reduced earnings allowance shall be reduced in respect of any part of the period falling on or after 6th April 1987 by the amount of any increase in the additional pension or invalidity allowance as the result of an order under section 63 above taking effect on or after that date.

(5)Where for any period commencing on or after 6th April 1987 a person is entitled as mentioned in sub-paragraph (4) above, his reduced earnings allowance shall be reduced by the amount of any additional pension or invalidity allowance to which he is entitled.

(6)Where a reduction falls to be made under sub-paragraph (4) or (5) above, the person to whom it falls to be made shall be entitled to reduced earnings allowance only if there is a balance after the reduction and, if there is such a balance, of an amount equal to it.

(7)Where the weekly rate of a benefit is reduced under section 29 of the [1975 c. 60.] Social Security Pensions Act 1975, there shall be subtracted from the amount which would otherwise fall to be deducted under sub-paragraph (4) or (5) above an amount equal to the reduction under that section.

(8)In the preceding sub-paragraphs references to an additional pension are references to that pension after any increase under section 9(3) of the Social Security Pensions Act 1975 but without any increase under Schedule 1, paragraphs 1 and 2, to that Act.