Citation and commencement

1.  This Order may be cited as the Pensions Increase (Review) Order (Northern Ireland) 2021 and shall come into operation on 12th April 2021.

Interpretation

2.—(1) In this Order, “the 1975 Order” means the Social Security Pensions (Northern Ireland) Order 1975.

(2) In this Order, any reference to a pension is a reference to a pension which began before 12th April 2021( 6).

Pension increases: annual rate and lump sums

3.—(1) This article applies to an official pension if—

(a) a qualifying condition is satisfied; or

(b) the pension is—

(i) a derivative pension,

(ii) a substituted pension or,

(iii) a relevant injury pension.

(2) In relation to any period on or after 12th April 2021, the pension authority may increase the annual rate( 7) of the pension—

(a) for a pension which began before 6th April 2020, by 0.5 per cent;

(b) for a pension which began on or after 6th April 2020, by 0.5 per cent multiplied by—

(3) In relation to a lump sum which is payable on or after 6th April 2020 but before 12th April 2021, the pension authority may increase the lump sum by 0.5 per cent multiplied by—

Reductions in respect of guaranteed minimum pensions

4.—(1) Where—

(a) a person is entitled to a guaranteed minimum pension increase on 12th April 2021, and

(b) entitlement to that guaranteed minimum pension arises from an employment from which (either directly, or indirectly by virtue of the payment of a transfer credit) entitlement to the official pension also arises,

the amount by reference to which any increase is calculated for the purposes of article 3(2) must be reduced by an amount equal to the rate of the guaranteed minimum pension unless the Department of Finance otherwise directs in accordance with the provisions of Article 69A( 8) of the 1975 Order( 9).

(2) Where on the death of a deceased spouse or civil partner a person becomes entitled to a guaranteed minimum pension in relation to a surviving spouse’s pension or a surviving civil partner’s pension, the amount by reference to which any increase is calculated for the purposes of article 3(2) must be reduced in accordance with Article 69 (5ZA)( 10) of the 1975 Order.

EXPLANATORY NOTE

(This note is not part of the Order)

Under section 69 of the Social Security Pensions (Northern Ireland) Order 1975 (c.15), the Department of Finance has to provide, by Order, for the increase in the rates of public service pensions. The Pensions (Increase) Act (Northern Ireland) 1971 (c.35)defines certain terms and sets out when the pension “begins” (the day after the last day of service in respect of which the pension is payable) and how the increase applies to lump sums.

The increase to be made in the rates of such pensions is the percentage (or in some circumstances a fraction of the percentage) by which the Department for Communities has, by direction under section 132 of the Social Security Administration (Northern Ireland) Act 1992 (c.8), increased the sums which are the additional pensions in long-term benefits, namely the additional pension entitlements accruing to employees in respect of their earnings after 5th April 1978.

For pensions which began before 6th April 2020 the increase is 0.5 per cent.

For pensions which began on or after 6th April 2020 the increases (following the calculation set out in article 3) are as follows:—

Article 3 of the Order provides for increases on certain deferred lump sums which became payable on or after 6th April 2020 and before 12th April 2021.

The Order also makes provision for the amount by reference to which any increase in the rate of an official pension is to be calculated to be reduced by an amount equal to the rate of the guaranteed minimum pension entitlement deriving from the employment which gives rise to the official pension.