It is a pleasure to follow my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon), who gave an excellent speech about why this Bill is so important and will make a material difference to many people. To that end, I thank my hon. Friend the Member for Tewkesbury (Mr Robertson) for bringing forward the Bill, because this is a very important issue for a number of people and the Bill sets out some important principles. I want to come on to the important point made by my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) about when the Bill will come into operation, because it deserves more explanation from the Government.
For a person to find out that their illness cannot be cured must be a terrifying experience not just for the sick individual themselves, but for their friends, family and loved ones. As a Parliament, we should be committed to alleviating the pressures facing those nearing the end of their lives. Since the 1990s, the Department for Work and Pensions has provided access to key benefits through what are referred to as the special rules for end of life. These are benefit rules that allow people who are nearing the end of their lives to get fast-track access to certain benefits.
The special rules were first introduced in attendance allowance in 1990, following a recommendation by the Social Security Advisory Committee. Attendance allowance claims are subject to a six-month waiting period, and the Committee was concerned that some terminally ill people were dying before that period had lapsed. Eligibility for the special rules was therefore limited to people diagnosed with a condition that meant they were unlikely to live for more than six months, as established in the Social Security Act 1990. Since then, the use of special rules has been extended to disability living allowance, employment and support allowance, personal independence payments and universal credit, all with the same eligibility criteria.
The current pension legislation contains provisions that allow a patient who is deemed terminally ill to claim under special rules and get the highest rate of financial help, and faster. Paragraph 25B(3) of schedule 7 to the
Pensions Act 2004 and paragraph 12(3) of schedule 5 to the Pensions Act 2008 both define the eligibility criteria for a terminal illness lump sum, which allows the patient to apply to exchange all their ill health benefits for a one-off lump sum payment if they are diagnosed with a terminal illness and do not expect to live longer than 12 months. The then Work and Pensions Minister said that this would be
“using the same rules to define ‘terminally ill’ as those that are used in the financial assistance scheme and in DWP benefits.”—[Official Report, House of Lords, 14 July 2008; Vol. 703, c. 1060.]
Historically, people eligible under the special rules have not had to wait as long as others to start getting benefit payments, as no waiting period is applied. They are not required to go through medical assessments or face-to-face appointments, and in most cases they have qualified for higher rates of financial help. The form supporting a special rules claim is completed by a clinician and is called an SR1. To access the fast-track route, people have to have been assessed by their healthcare professional as having six months or less to live. This has become known as the six-month rule. My hon. Friend the Member for Tewkesbury made the point about it being a healthcare professional who makes the assessment.
The Pensions Act 2004 established the Pension Protection Fund, which provides compensation to members of eligible defined-benefit pension schemes in cases where the sponsoring employer becomes insolvent on or after 6 April 2005 and the scheme lacks sufficient assets to fulfil its pension liabilities up to the level of compensation offered by the Pension Protection Fund. The financial assistance scheme initially covered schemes that wound up between 1 January 1997 and 5 April 2005. Since its inception, it has undergone reviews and expansions in both coverage and the level of assistance provided. The scheme offers payments to members of qualifying schemes who are unable to fully secure their pension liabilities.
Currently, the Pension Protection Fund has the authority to issue a one-time lump sum payment to individuals who are terminally ill and have not yet received their protection fund compensation. Similarly, the financial assistance scheme allows for the early disbursement of financial assistance in cases of terminal illness.
Both the PPF legislation and the FAS regulations employ the same definition of terminal illness. It is currently defined in pensions legislation as if
“the person’s death in consequence of that disease can reasonably be expected within 6 months”.
That means that both the PPF and the FAS currently make payments when medical evidence shows that a member has a life expectancy of up to six months. This eligibility criterion was set in line with the social security special rules for end of life provisions for certain benefits, originally introduced in 1990. The eligibility rules were extended to 12 months by the Social Security (Special Rules for End of Life) Act 2022, which we all supported.
The Bill seeks simply to restore the original policy intent that there should be an alignment between the Pension Protection Fund and the financial assistance scheme. For more than 30 years, the special rules have ensured that at this most difficult time people have had the financial support to which they are entitled, and that they get it quickly and easily.