The DWP has published its response to the February 2009 consultation on the draft Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009, and the final regulations have been laid before Parliament. There are no major changes from the consultation draft regulations.

The changes to the payment of assistance include:

  • Indexation of post-97 benefits, capped at 2.5%: this will not be extended to benefits accrued earlier, as this would not be a proportionate use of taxpayers' money
  • Extension of survivors’ rights to non-married partners where the scheme rules allow this and a nomination has been made
  • Benefits for surviving dependent children up to age 23: these will be provided even if none would have been provided under the scheme rules; this is because of the administrative complexity of identifying schemes with no such rule and the small difference between paying compensation to all surviving children and paying it only to those entitled to children's pensions under the scheme rules
  • Annual revaluation of the cap: the government has decided against including an age- or service-related adjustment to the compensation cap (as applies to the PPF) because of the administrative complexity and to avoid creating a "cliff edge" beyond which the cap would apply to an individual
  • Normal retirement age. the government has decided to clarify the definition of normal retirement age (NRA) following concerns expressed by some respondents that the legislative definition was ambiguous. The consultation response states that NRA for FAS purposes is the age specified in the scheme rules at the point at which the member ceased to accrue benefits in the scheme as the age at which that member would normally retire.

The proposal to transfer responsibility for FAS operations from the DWP to the PPF, which received a favourable response, will be the subject of a further consultation at the end of 2009, together with the other remaining elements of the extension to FAS announced in December 2007. Meanwhile, the government has confirmed that the funding of FAS and the PPF will remain separate.


Consultation response

Regulations laid before Parliament

Background information:

Pensions Update February 2009