• will not be compulsory - it will still be possible to offset pension rights against other assets or to use the current earmarking and attachment arrangements.

In addition, in the light of comments made during the consultation exercise, the provisions in the Act put beyond doubt the fact that pension sharing will be available only to those who begin proceedings for divorce or nullity after the legislation has been brought into force. The Act also includes changes designed to improve the current legislation on attachment and earmarking.

3. Bereavement Benefits

Background

The present widows' benefits scheme was introduced in 1946. Three main benefits are available to women who are widowed. These are based upon the National Insurance contributions record of the late husband, rather than the widow herself. The three benefits are:

• Widow's Payment - a tax-free lump sum payment of £1,000

• Widowed Mother's Allowance - This is paid to widows with children, and ends when the youngest child ceases to be a dependant. It consists of a basic allowance for the widow herself, plus an allowance for each child and any SERPS (State Earnings Related Pension) her late husband was entitled to. It is taxable.

• Widow's Pension - This is paid to widows over 45 who do not have dependent children. It is taxable and consists of a basic pension plus any SERPS. The amount payable depends on the woman's age when she was widowed or stopped receiving Widowed Mother's Allowance.

Under the present arrangements, married men are not entitled to bereavement benefits. This affects some 15,000 newly bereaved widowers and around 35,000 children of widowed fathers each year. (The UK has been under challenge in the European Court of Human Rights over the present scheme.)

The Government's reforms

The Government set out its proposals for reforming bereavement benefits in the consultation document A new contract for welfare: SUPPORT IN BEREAVEMENT (Cm 4104). This was published in November 1998.

The consultation paper proposed that:

• All those currently receiving widows' benefits would continue to receive them;

• Both widows and widowers would be entitled to a tax-free lump sum "Bereavement Payment" of £2,000;

• Widowed parents with dependent children would receive a weekly, taxable, but non means-tested benefit - the "Widowed Parent's Allowance" - equivalent to and subject to the same entitlement conditions as the current Widowed Mother's Allowance;

• Widows and widowers aged 45 and over with no dependent children would receive a weekly, taxable, non means-tested benefit for six months only - the "Bereavement Allowance" - age-related as for the current Widow's Pension, but with no SERPS component. While the Bill was before Parliament, this six month period was extended to one year;

• Widows and widowers with children would be guaranteed up to an extra £10 a week through a new disregard of their Widowed Parent's Allowance when calculating entitlement to income-related benefits;

• Men and women over 55 at the start of the new arrangements and widowed within the subsequent 5 years would have access to income-related benefits without any job seeking requirements. They would also receive a special premium (worth £14.35 a week at April 1998 rates) to help them maintain their income when their transitional bereavement benefit ended after 6 months.

Following consultation, the Government legislated to make the proposed changes.

The measures in the Act

The measures in the Act that relate to Bereavement Benefits are contained in Part V, sections 54-56, and Part I of Schedule 8. They provide for the new Bereavement Payment, Widowed Parent's Allowance and Bereavement Allowance.

The remaining changes - the disregard of Widowed Parent's Allowance (£10 for Income Support and £15 for other income-related benefits) and the additional support for widows and widowers over 55 - do not require primary legislation.

4. Welfare to Work

Background

Unemployment has been on a downward trend since the early 1990s. However, some groups - such as those with no or low qualifications, some ethnic minorities and people with a long-term illness or disability - remain vulnerable to longer term unemployment. Unemployment also remains consistently high in some geographical areas.

Within the present system, there is limited flexibility to develop customised solutions in areas of particular need. Only people claiming Jobseeker's Allowance (JSA) are automatically offered advice on finding work or improving their employability. The New Deals for Young People, the Long-Term Unemployed, Lone Parents and Disabled People provide tailored help through access to a personal adviser. However, they are aimed at specific client groups.

Currently, people have to deal with a number of different institutions when claiming benefits - including the Employment Service, Benefits Agency, local authorities and the Child Support Agency.

The Government is introducing three new Welfare to Work initiatives. These are:

• ONE, the Government set out its plans for the ONE service in A new contract for welfare: THE GATEWAY TO WORK (Cm 4102, October 1998). ONE will bring together the Employment Service, Benefits Agency and other welfare providers at a single point of contact. New claimants of working age will have access to a personal adviser, who will work with them to assess their potential for employment and help them plan a route to independence.

• The New Deal for Partners of Unemployed People, launched in April 1999 following pathfinders in Cardiff, Leeds and Tayside. £60 million from the windfall tax has been set aside to provide partners of unemployed people with expert, personalised help to find work. In addition, partners aged 18 - 24 who do not have children will be able to go onto the New Deal for Young People;

• Employment Zones, which will target intensive and innovative help on areas of particular need. In Employment Zones, personal job accounts will bring together money currently attributable to benefit, training and other programmes and enable these to be used more flexibly, to help clients back to work. The Employment Zones Consultation Paper, published on 2 February 1999, set out detailed plans for implementing Employment Zones. The consultation period ended on 30 April 1999.

The ONE service is being piloted in twelve different areas. The first four pilots began in June 1999. Interviews will initially operate on a voluntary basis for non-JSA claimants, until the provisions of the Act come into force.

The measures in the Act

The Welfare to Work measures in the Act are contained in Part V, sections 57 - 60, and Schedule 7:

Sections 57 and 58 contain the provisions for the ONE service. This will require individuals claiming certain benefits to take part in work-focused interviews as a condition of receipt. It will not place any requirement on them beyond taking part in interviews. (For example, they will not be required to attend training courses or seek work other than where the claimant is on JSA, where such requirements are already in operation.)

The powers in the Act will enable the Government to require people to take part in a work-focused interview with a personal adviser at the point of claim, and further interviews while they are on benefit at specified times. These further interviews would be triggered by a change in their circumstances that might have a bearing on their employability (for example, their children reaching a certain age or the claimant taking up or leaving part time work). Section 58 ensures that local authorities can carry out such interviews with claimants who take part on a voluntary basis. This is over and above the requirements in section 57.

Section 59 and Schedule 7 contain provisions that will require childless couples to make joint claims for Jobseeker's Allowance (JSA). It is intended that regulations will prescribe that joint claims will apply to those born after a certain date, with the effect that joint claims will initially apply to young childless couples but gradually extend to cover older childless couples.

The intention of joint claims is to ensure that both partners in childless couples are directly involved in the labour market, to prevent them from becoming dependent on benefit from an early age. Under the new scheme both members of the couple will be claimants with equal rights and responsibilities, rather than the partner being a dependant on the claimant. Those between the ages of 18 and 24 who remain unemployed for six months will go onto the New Deal for Young People. Couples with children will continue to be offered help on a voluntary basis, through the New Deal for Partners of Unemployed People.

Section 60 contains the provisions for implementing Employment Zones. Prototype Employment Zones have been operating under earlier legislation. The new powers in the Act enable schemes to be set up in designated areas where special benefit rules can apply. In order to help participants back to work, the schemes allow them to anticipate funding for up to 6 months' worth of spending on training and jobsearch, combined with money equivalent to the payments they would normally receive from JSA. The powers in the Act also enable the Secretary of State to provide a wider range of support for activities within the Zones which help people to get and keep work, including support for unemployed people who are seeking to become self-employed.

5. Long Term Illness and Disability

Background

People with a long term illness or disability can currently claim a number of different benefits to help meet their needs. Depending on their circumstances, people can qualify for more than one of these benefits at same time. The main ones are: Incapacity Benefit (contributory); and Severe Disablement Allowance, Disability Working Allowance, Disability Living Allowance and Attendance Allowance (all non-contributory). Several other benefits provide special premiums for disabled adults and children.

The New Deal for Disabled People is developing and testing new ways to help people with a long-term illness or disability to enter and retain work. The national minimum wage and the new Disabled Person's Tax Credit are also intended to help make work pay.

The Government published its plans for reforming benefits for people with a long term illness or disability in A new contract for welfare: SUPPORT FOR DISABLED PEOPLE (Cm 4103, October 1998). In the consultation paper, the Government set out its view that, although the benefits which are currently available are intended to provide security for all those with a long term illness or disability, in some respects the level of support does not fully match up to their needs. The Government also indicated its view that changes were needed to Incapacity Benefit - both to restore the original purpose of the benefit in providing a replacement income for people recently in work; and to take account of changing social conditions.

The consultation paper proposed the following main changes:

• reform of Severe Disablement Allowance, to enable young people who are disabled and cannot work and who claim benefit before 20 to receive Incapacity Benefit. After a year on benefit, their entitlement would be £80.80 a week compared with £54.40 at present - thereby reducing the need to rely on Income Support to top up their income;

• a new Disability Income Guarantee, which will give single, severely disabled recipients under 60 nearly £6 a week extra, and couples over £8 a week extra;

• extending the higher rate mobility component of Disability Living Allowance - currently worth £37.00 a week - to 3 and 4 year old severely disabled children;

• reform of the All Work Test so that, as well as determining entitlement to benefit, it also provides information about people's capabilities which can be used to help them plan a return to work; and changing the name of the test to reflect this new approach;

• requiring those claiming incapacity benefits to take part in a ONE personal adviser interview, to ensure that they receive help to plan a route back to work, and get the benefits to which they are entitled;

• expanding specialist disability services to help disabled people enter work, and examining new ways to improve their retention in work through New Deal for Disabled People;

• strengthening the link between work and entitlement in Incapacity Benefit, so that it is only paid to those who have recently been in work and paid National Insurance contributions;

• taking account of income from occupational and personal pensions in Incapacity Benefit.

The measures in the Act

Following consultation, the Government legislated to make the proposed changes. The measures in the Act that relate to incapacity and disability benefits are contained in Part V, sections 61-68, and Parts II and III of Schedule 8. The provisions implement all of the proposed changes in the consultation paper, apart from the Disability Income Guarantee and the expansion of specialist disability services, which do not require new primary legislation.

While the Bill was going through Parliament, the Government introduced an amendment to allow young disabled people to claim Incapacity Benefit up to the age of 25 in prescribed circumstances, without having to satisfy the contribution conditions. (The normal age limit proposed by the Government is age 20.) This extension is intended to benefit young disabled people in education or vocational training. The Government also announced that people receiving the higher-rate care component of Disability Living Allowance would not have their pension income taken into account in Incapacity Benefit.

The way in which Incapacity Benefit will be reduced to take account of pension income is now set out on the face of the Act. The Act ensures that the benefit will be reduced by 50p for every additional £1 of pension income that people receive above the first £85.

Section 68 was added in order to provide that certain overpayments of incapacity and disability benefits which arise before 1 June 1999 cannot be recovered from the recipient. This is intended to protect disabled people who could not reasonably be expected to know that their benefit entitlement was incorrect, for example due to a gradual improvement in their condition, or that they should have reported this change to the Benefits Agency.

The measures in the Act do not require any disabled people to look for work, if they do not want to. No existing claimants lose any benefit entitlement at the point of change.