12.— (1) Part 2 of the Principal Act is amended by inserting the following Chapter after Chapter 8:

“Chapter 8A

Partial Capacity Benefit

Entitlement to benefit.

46A.— (1) Subject to this Act, a person shall be entitled to partial capacity benefit where the person—

(a) has applied for that benefit,

(b) is assessed by a medical assessor as having a profound restriction on his or her capacity for work in relation to the capacity for work of a person of the same age who has no restriction on his or her capacity for work,

(c) on the day immediately before the day for which benefit is claimed—

(i) was in receipt of—

(I) illness benefit for at least 26 weeks in a period of interruption of employment, or

(II) invalidity pension, or

(ii) other than in the case of a person to whom section 46C(3)(a)(ii) applies, has exhausted the period of entitlement to partial capacity benefit provided for in section 46C or regulations made under that section,

and

(d) is under pensionable age.

(2) For the purposes of—

(a) the assessment required under subsection (1)(b), the Minister may prescribe the conditions for which a person shall be assessed as having a profound restriction on his or her capacity for work in relation to the capacity for work of a person of the same age who has no restriction on his or her capacity for work, and

(b) the assessment referred to in subsection (4), the Minister may prescribe the conditions for which a person shall be assessed as having a mild restriction on his or her capacity for work in relation to the capacity for work of a person of the same age who has no restriction on his or her capacity for work.

(3) Notwithstanding subsection (1), where subsection (1)(b) is not satisfied a person may, subject to subsections (4) and (5), be entitled to partial capacity benefit.

(4) A person who is assessed by a medical assessor as having a mild restriction on his or her capacity for work in relation to the capacity for work of a person of the same age who has no restriction on his or her capacity for work shall not be entitled to partial capacity benefit.

(5) Where partial capacity benefit is provided pursuant to subsection (3)—

(a) the rate of that benefit shall be payable at a rate, or rates, less than that provided for in section 46B(1)(a), and

(b) the Minister may prescribe the reduced rate or rates.

(6) Regulations made by the Minister for the purposes of subsection (5) shall provide for the reduced rate, or rates, of partial capacity benefit pursuant to subsection (3), and the reductions in the rate, or rates, of partial capacity benefit shall relate to the extent to which subsection (1)(b) is not satisfied, but such reduction shall not affect any entitlement to an increase in respect of a qualified adult or qualified children or an increase where the beneficiary is ordinarily resident on an island.

(7) Where a person qualifies for partial capacity benefit by virtue of subsection (1)(c)(i)(I), each day for which that benefit is paid shall be—

(a) treated as a day of incapacity for work, and

(b) deemed to be a day for which illness benefit is paid for the purposes of Chapter 8.

(8) In this Chapter, ‘medical assessor’ means an officer of the Minister who is a registered medical practitioner.

Rates of benefit.

46B.— (1) Subject to this Act, the weekly rate of partial capacity benefit payable shall—

(a) in the case of a person to whom section 46A(1)(c)(i) applies, be the weekly rate of illness benefit or invalidity pension that was being paid to that person on the day immediately before the day for which partial capacity benefit is awarded, including any increase in that benefit or pension, where payable, and

(b) in the case of a person to whom section 46A(1)(c)(ii) applies, be prescribed in regulations.

(2) Notwithstanding subsection (1)—

(a) any change in circumstances that would have resulted in a variation in the rate of illness benefit or invalidity pension payable, if that person had continued receiving the said benefit or pension, or

(b) any general variation in the weekly rates of benefits, pensions, allowances or supplements under this Act,

shall have similar effect in relation to the rate of partial capacity benefit payable in that case.

(3) For the purposes of subsection (2) a change in circumstances shall include a situation where a person, who initially qualifies for partial capacity benefit by virtue of section 46A(1)(c)(i)(I), subsequently continues to qualify for partial capacity benefit by virtue of being deemed to satisfy the qualifying conditions for invalidity pension in accordance with section 46C(3)(b).

(4) Subsections (2) and (3) shall apply to the weekly rate prescribed in regulations under subsection (1)(b), and the regulations may provide for a change in circumstances referred to in subsections (2) and (3) and a general variation referred to in subsection (2).

Duration.

46C.— (1) Subject to this Chapter, partial capacity benefit shall be paid for a maximum period of 156 weeks.

(2) Subject to subsection (3), where partial capacity benefit is paid in accordance with regulations made under section 46A(6), the Minister may by regulations provide that partial capacity benefit shall be paid for a period, or periods, less than that specified in subsection (1) and the duration of such lesser period, or periods, shall relate to the extent to which section 46A(1)(b) is not satisfied.

(3) Notwithstanding subsections (1) and (2), where a person qualifies for partial capacity benefit by virtue of section 46A(1)(c)(i)(I)—

(a) the duration of partial capacity benefit shall be limited to—

(i) the period specified in subsection (1) or in regulations made under subsection (2) as appropriate to the circumstances, or

(ii) the remaining period of entitlement to illness benefit in the period of interruption of employment concerned that would have been paid if the person had continued to claim illness benefit,

whichever is the shorter period, and

(b) subject to subsection (4), payment of partial capacity benefit may continue beyond the period specified in paragraph (a)(ii) where immediately on the termination of the entitlement of the person entitled to partial capacity benefit under paragraph (a)(ii) the person is deemed to satisfy the qualifying conditions for invalidity pension.

(4) Where a person is paid partial capacity benefit for a period referred to in subsection (3)(a)(ii) and such payment is continued in accordance with subsection (3)(b), the total period for which partial capacity benefit shall be paid under paragraphs (a)(ii) and (b) of subsection (3) shall not exceed 156 weeks or such lesser period as may be provided for in regulations under subsection (2).

Regulations.

46D.— (1) The Minister may make regulations to provide for—

(a) disqualifying a person for receiving partial capacity benefit where the person fails without good cause to—

(i) attend for, or submit to, any medical or other examination or treatment,

(ii) comply with medical advice and instructions provided by a registered medical practitioner that relates to his or her incapacity, and

(iii) make himself or herself available to meet with an officer of the Minister in respect of his or her claim for partial capacity benefit, and

(b) subject to subsection (2), the circumstances and conditions in which a person may relinquish entitlement to partial capacity benefit and subsequently reclaim that benefit.

(2) Where a person has been paid partial capacity benefit and the person relinquishes entitlement to that benefit and subsequently reclaims that benefit, the total duration for which that benefit shall be paid in respect of both the period prior to the relinquishment and the period in which it is reclaimed shall not exceed 156 weeks or such lesser period as may be provided for in regulations under section 46C(2).”.

(2) The Principal Act is amended—

(a) in section 39(1) (amended by section 4 of, and Schedule 1 to, the Act of 2006), by inserting the following paragraph after paragraph (a):

“(aa) partial capacity benefit,”,

(b) in section 46 by—

(i) substituting the following subsection for subsection (1A) (inserted by section 5 of the Act of 2007):

“(1A) Subject to subsection (1B), a person in receipt of or entitled to illness benefit shall not engage in work.”,

and

(ii) inserting the following new subsection after subsection (1A):

“(1B) A person shall not be disqualified for receipt of illness benefit while engaging in such class or classes of employment or training and subject to such circumstances and conditions as may be prescribed.”,

and

(c) in section 118 by inserting the following subsection after subsection (3) (amended by section 16 of the Act of 2007):

“(3A) Subject to subsection (4), a person in receipt of or entitled to invalidity pension shall not engage in work.”.