Triple Lock Plus

hugheskevi

MallyGirl said:

No different to having different minimum wage for young people 

I think it is rather different. To avoid being unlawful, a policy must be a legitimate aim, and enacted in a proportionate way to justify direct or indirect discrimination against a protected characteristic (which includes age).

A lower minimum wage for young people meets the legitimate aim of ensuring there is not high youth unemployment arising from a high cost of employment, and it is done in a proportionate way by having a minimum wage but set at a lower level. That all seems quite reasonable, although you would want to check statistics on youth unemployment, etc, when reviewing the rates to ensure it all remains proportionate.

Whereas this policy is rather more difficult to demonstrate a legitimate aim for the inherent age discrimination. It is not sufficient to simply assert something is legitimate (which is what the judge in the McCloud case said the govt did around the 2015 pension reforms and offering protection for older workers), it must be shown to be a legitimate aim by offering some evidence and justification.

Here the aim appears to be to ensure that pensioners reliant solely on the new State Pension do not pay income tax. This in itself does not seem to be a serious issue however, given that many reliant on the old State Pension, those who have deferred and those entitled to a protected payment will be solely reliant on their State Pension yet still pay tax due to their State Pension exceeding their Personal Allowance.

The practical impact of the policy is to give all pensioners with taxable income between £12,570 and around £125,000 a higher net income due to a reduction in their income tax. This on its own does not seem to be a legitimate aim, given this is of no benefit to the poorest pensioners, and pensioners as a whole are less likely than working age individuals to be in poverty. You could also achieve much the same effect by setting the rate of State Pension to deliver whatever higher net income you think is required for pensioners after they pay a very small amount of tax on the amount of new State Pension in excess of the Personal Allowance. 

Given the aim of the policy is to ensure that those relaint solely on new State Pension don't pay tax, there would be a compelling argument that the higher allowance should be tapered back to the standard amount above a particular level of income, eg, £20,000 as there is no justification to have a higher tax allowance for pensioners with very high incomes given the stated aim of the policy. Introducing this sort of arrangement would significantly strengthen the argument that if the policy is a legitimate aim, it is being enacted in a proportionate way to meet the policy aims.

There could be arguments advanced around the issue of the single person rate of Pension Credit being marginally below the rate of new State Pension and uprated by the same metric. Arguments could be put forward about the undesirability of sending tax bills to low-income pensioners at the end of the tax year, and more pensioners experiencing K Tax Coding notices on their private pension income. However, none of these are put forward as aims for the policy to date, and most would be addressed by simply applying Tax Coding and deducting tax from State Pension in the same way as other pension income.

A key question would be around risk of challenge - it is unlikely any organisation would bring forward a challenge as there would be a severe reputational issue for any company, charity, lobby group, etc, to be taking the govt to court with the probable outcome being making pensioners pay more tax. So it would likely be individuals bringing any challenge, and that is too high a bar for most - especially with no direct gain to whomever brings the challenge - so the policy may well go unchallenged.

Disclaimer: I am not a lawyer 

daveyjp

swindiff said:

How is it not age discrimination to have different personal tax allowance based on an individuals age?  Just thinking about the mess made with public service pensions following the McCloud Judgement

It isn't and its a proposal which merely returns pensioners to how it was prior to about 2010.

A  pensioner had a tax allowance about £2,000 more than a working individual to ensure anyone on basic pension didn't pay income tax.

Silvertabby

Or only being eligible for the State pension from a certain age. 

Grahmb65

Does the new Triple Lock Plus announced by the Conservatives include the old state pension?

When it was being explained on television, only the NEW state pension was mentioned and the graphics just showing a pension from £11,500

The old state pension of £8814 plus additional state pension, (formerly SERPS) can take a pension over the Personal Tax Allowance. So will the new Triple Lock Plus increase the Personal Tax Allowance for pensioners on the old system. I find it strange that this has not been explained or even mentioned in any of the announcements or news bulletins.

swindiff

daveyjp said:

swindiff said:

How is it not age discrimination to have different personal tax allowance based on an individuals age?  Just thinking about the mess made with public service pensions following the McCloud Judgement

It isn't and its a proposal which merely returns pensioners to how it was prior to about 2010.

A  pensioner had a tax allowance about £2,000 more than a working individual to ensure anyone on basic pension didn't pay income tax.

Thanks for that info, that was something I was not aware of.  For clarification, I am not against this happening, just wondering how it can happen and not contravene the equality act, which was introduced in 2010 coincidentally.  The same year the personal tax allowance was equalised for everyone regardless of age.  Will it need amending to allow this to happen?  I know there is an exception in the equality act when it come to national minimum wage for young people.

pinnks

the simple fact remains that if the allowance had not been frozen until now, it would be about £15,000 anyway and this gimmick, which I think is open to challenge base on what hugheskevi writes, would not be being floated.