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Pensions Bill

moved Amendment No. 130EVA: 130EVA: After Clause 106, insert the following new Clause— ““Tax payable on payments in arrears (1) The Pensions Act 2004 (c. 35) is amended as follows. (2) After section 286 (financial assistance scheme for members of certain pension schemes) insert— ““286A Tax payable on payments in arrears (1) This section applies in any case in which payments due to be made under section 286 are received by the qualifying members in a tax year other than that during which payments were due to be made (““payments in arrears””). (2) The Treasury may make regulations concerning the treatment for income tax purposes of payments in arrears. (3) Regulations under subsection (2) may make provision for— (a) the attribution of payments in arrears to a tax year other than that in which the payments were received, and (b) claims for the repayment of income tax which is, or may have been, overpaid in respect of payments in arrears.”””” The noble Lord said: During the Pensions Bill last year, we fought long and hard for the financial assistance scheme to pay pensioners 90 per cent of their expected pension accrual, and it was only at the end of last year that the Government finally conceded. A smaller point that was often overlooked in those debates was the enormous delays that pensioners were suffering to receive even the lesser amount that was owed to them before that point. At the time, the Government assured us that the delays were only teething problems and that everything would soon be running smoothly with the proper amounts of money finally being made over to those who had been waiting so long for their entitlement. It appears that this is not so: the financial assistance scheme is still in arrears on their payments. Can the Minister confirm how much the scheme is still in arrears and what proportion of funding has been spent on administration rather than on payments? To add insult to injury, it also appears that not only are the potential recipients not receiving any interest when their arrears finally arrive but they are expected to pay tax on these non-existent sums payments. Can the Minister confirm that HMRC does not intend to repay any overpayment of tax until as late as mid-2009? Can he explain why that is? Additionally, can he confirm whether HMRC is taxing the arrears at 20 per cent, even though, if the payments had been made on time, they would have been subject to only 10 per cent? Why is the pensioner once again being expected to pay for the failure of the Government to keep their promises promptly? I beg to move.