Contributions

1 Amendments relating to primary Class 1 contributions

(1) In section 4 of the principal Act, for subsections (6) to (6B) (computation of primary Class 1 contributions) there shall be substituted—

“(6) Where a primary Class 1 contribution is payable, the amount of that contribution shall be the aggregate of—

(a) the initial primary percentage of so much of the earnings paid in the tax week, in respect of the employment in question, as does not exceed the current lower earnings limit; and

(b) the main primary percentage of so much of those earnings as exceeds that limit but does not exceed the upper earnings limit;

but this subsection is subject to regulations under subsection (7) below or sections 128 to 132 below and to section 27 of the Pensions Act (contracted-out rates).

(6A) For the purposes of this Act the primary percentages shall be as follows—

(a) the initial primary percentage shall be 2 per cent.; and

(b) the main primary percentage shall be 9 per cent.;

but the rates of those primary percentages are subject to alteration under sections 122 and 123A below.

(6B) In the case of earners paid otherwise than weekly, any reference in subsection (6) above to the current upper, or (as the case may be) lower, earnings limit shall be taken as a reference to the prescribed equivalent of that limit.”

(2) In subsection (6F) of that section (alteration of number of primary or secondary brackets) the words “primary or” shall be omitted.

(3) In section 122 of that Act (additional power to alter contributions) for paragraph (a) of subsection (1) there shall be substituted—

“(a) the percentage rate specified—

(i) as the initial primary percentage in section 4(6A)(a);

(ii) as the main primary percentage in section 4(6A)(b);”.

(4) In subsection (4) of that section (variation of rates for purpose of adjusting Redundancy Fund) for paragraph (a) there shall be substituted—

“(a) the percentage rate specified—

(i) as the initial primary percentage in section 4(6A)(a);

(ii) as the main primary percentage in section 4(6A)(b);”.

(5) In subsection (6) of that section, for paragraph (a) (maximum variation in Class 1 rates of 025 percentage points) there shall be substituted—

“(a) to increase for any tax year—

(i) the percentage rate of the initial or main primary percentage, or

(ii) the percentage rate for secondary Class 1 contributions,

to a percentage rate more than 025 per cent. higher than the percentage rate applicable at the end of the preceding tax year for the primary percentage or secondary Class 1 contribution in question; or”.

(6) In section 123A of that Act (further power to alter certain contributions) for subsection (1) there shall be substituted—

“(1) For the purpose of adjusting amounts payable by way of primary Class 1 contributions, the Secretary of State may at any time make an order altering—

(a) the percentage rate specified as the initial primary percentage in section 4(6A)(a);

(b) the percentage rate specified as the main primary percentage in section 4(6A)(b).”

(7) In subsection (3) of that section, for paragraph (a) (limit on increase of primary Class 1 rates) there shall be substituted—

“(a) to alter the percentage rate of the initial or main primary percentage to a percentage rate more than 025 per cent. higher than the percentage rate applicable at the end of the preceding tax year for the primary percentage in question; or”.

(8) In section 134 of that Act (destination of contributions) in paragraphs (a) and (i) of subsection (4) (“appropriate national health service allocation” and “appropriate employment protection allocation”, when in force, to include specified percentage of earnings in respect of which primary Class 1 contributions were paid) after the word “paid” there shall be inserted the words “at the main primary percentage rate”.

(9) In Schedule 20 to that Act (glossary of expressions) there shall be inserted at the appropriate places—

2 Repayment of contributions where earnings become repayable

In Schedule 1 to the principal Act (contributions: supplementary provisions) in paragraph 6(1) (matters for which regulations may provide) after paragraph (g) there shall be inserted—

“(gg) for the repayment, in prescribed cases, of the whole or a prescribed part of any contributions paid by reference to earnings which have become repayable;”.

3 Abolition of Treasury supplement to contributions

No payments by way of supplement, or adjustment of supplement, under section 1(5) of the principal Act shall be made after 31st March 1989 in respect of any contributions whether paid before, on or after that date.

4 Earnings factors

(1) Section 13 of the principal Act (contribution conditions and earnings factors) shall be amended in accordance with subsections (2) to (4) below.

(2) In subsection (5) (manner in which tables and rules are to be drawn up) after the words “so that in general” there shall be inserted—

“(a) for any tax year beginning on or after 6th April 1987, the amount of earnings on which primary Class 1 contributions have been paid or treated as paid gives rise, subject to subsection (5A) below, to an earnings factor for that year equal or approximating to the amount of those earnings; and”.

(3) After subsection (5A) there shall be inserted—

“(5AA) Regulations may impose limits with respect to the earnings factors which a person may have or be treated as having in respect of any one tax year.”

(4) After subsection (5B) (duty to maintain and retain records) there shall be inserted—

“(5C) Where the Secretary of State is satisfied that records of earnings relevant for the purpose of calculating a person’s earnings factors for a tax year beginning on or after 6th April 1987 have not been maintained or retained or are otherwise unobtainable then, for the purpose of determining those earnings factors, he may—

(a) compute, in such manner as he thinks fit, an amount which shall be regarded as the amount of that person’s earnings on which primary Class 1 contributions have been paid or treated as paid, or

(b) take the amount of those earnings to be such sum as he may specify in the particular case.”

(5) The Earnings Factor Regulations, as in force for the purpose of determining earnings factors for the tax years beginning with 6th April 1985 and 6th April 1986, shall have effect, and be taken always to have had effect, with the substitution in paragraph 3 of Schedule 1 (which, as amended by regulation 2(3) of the Amending Regulations, provided in certain cases for the aggregation of separate contributions) for the words from “where the values” to “those sums” of the words—

• “where, in the case of any two or more separate sums—

  (a)

  the values to be accorded to F (apart from this paragraph) would fall to be ascertained under the same paragraph of paragraph 2(e) above, and

  (b)

  the values to be so accorded to G would fall to be ascertained under the same paragraph of paragraph 2(f) above,

  those sums”.

(6) In subsection (5) above—

• “the Earnings Factor Regulations” means the [S. I. 1979/676.] Social Security (Earnings Factor) Regulations 1979; and

• “the Amending Regulations” means the [S. I. 1985/1417.] Social Security (Earnings Factor) Amendment Regulations 1985.

(7) The amendment by subsection (5) above of a provision contained in regulations shall not be taken to have prejudiced any power to make further regulations revoking or amending that provision, whether in relation to the tax years there mentioned or otherwise.

(8) The [S. I. 1988/429.] Social Security (Earnings Factor) Amendment Regulations 1988 shall have effect, and be deemed always to have had effect, as if the amendment made by subsection (3) above had come into force before the making of those regulations.

Liability to maintain children

5 Liability of parents to maintain children under the age of nineteen in respect of whom income support is paid

(1) In section 20(11) of the 1986 Act (definitions for Part II) for the definition of “child” there shall be substituted—

““child”, subject to section 26(3)(d) below, means a person under the age of 16”.

(2) In section 26(3) of that Act (person liable to maintain spouse and children etc)—

(a) in paragraph (a), for the words “his children” there shall be substituted the words “any children of whom he is the father”;

(b) in paragraph (b), for the words “her children” there shall be substituted the words “any children of whom she is the mother”; and

(c) after paragraph (c) there shall be added the words “and

(d) “child” includes a person who has attained the age of 16 but not the age of 19 and in respect of whom either parent, or some person acting in the place of either parent, is receiving income support.”

(3) In section 26(4) of that Act (reference to a person’s children to be construed in accordance with the [1987 c. 42.] Family Law Reform Act 1987) for the words “a person’s children” there shall be substituted the words “children of whom the man or the woman is the father or the mother”.

(4) In section 26(5) of that Act (adaptation for Scotland)—

(a) after the word “children” where first occurring there shall be inserted the words “of whom the man or the woman is the father or the mother”; and

(b) for that word where next occurring there shall be substituted the words “any such children”.

(5) In section 17(2)(a) of the [1970 c. 36.] Merchant Shipping Act 1970 (seaman’s dependants to consist of his spouse and certain persons under the age of sixteen) for the word “sixteen” there shall be substituted the word “nineteen”.

Benefits under the principal Act

6 Benefits for women widowed before 11th April 1988

(1) In the case of a widow whose late husband died before 11th April 1988 and who either—

(a) was over the age of 40 but under the age of 55 at the time of her husband’s death, or

(b) is over the age of 40 but under the age of 55 at the time when she ceases to be entitled to a widowed mother’s allowance,

section 26 of the principal Act (widow’s pension) shall have effect, and be taken always to have had effect, as if section 36(3) of the 1986 Act (which substituted “45” for “40”, and “55” for “50”, in subsections (1) and (2)) had never been enacted.

(2) The [S.I. 1987/1854.] Social Security (Widow’s Benefit and Retirement Pensions) Amendment Regulations 1987 shall have effect, and be taken always to have had effect, with the addition at the end of regulation 3 (transitional provision for widowed mother’s allowance where husband died before 11th April 1988) of the following—

“(3) In determining whether a widow—

(a) whose late husband died on or after 7th October 1987 and before 11th April 1988, and

(b) who became entitled to a widow’s allowance on his death,

is also entitled, after the cessation of that allowance, to a widowed mother’s allowance for any period beginning on or after 11th April 1988, regulation 16(1) of the principal Regulations shall apply as if regulation 2(6) above had not been made.

(4) In determining whether a widow—

(a) whose late husband died before 11th April 1988,

(b) who immediately before that date was entitled to a widowed mother’s allowance otherwise than by virtue of regulation 16(1) of the principal Regulations, and

(c) who would, apart from this paragraph, cease to be entitled to that allowance on or after that date,

is entitled to such an allowance for any period beginning on or after that date, that regulation shall apply as if regulation 2(6) above had not been made.”

(3) The [S.I. 1989/523.] Social Security Benefit (Dependency) Amendment Regulations 1989 shall have effect, and be taken always to have had effect, with the insertion after regulation 3 (which made amendments concerning widowed mother’s allowance to regulation 4B of the [S.I. 1977/343.] Social Security Benefit (Dependency) Regulations 1977) of the following—

“3A The first amendment made by regulation 3 above shall not have effect in relation to a widow whose late husband died before 11th April 1988.”

(4) In any case where—

(a) a claim for a widow’s pension or a widowed mother’s allowance is made, or treated as made, before the passing of this Act, and

(b) the Secretary of State has made a payment to or for the claimant on the ground that if the claim had been received immediately after its passing she would have been entitled to that pension or allowance, or entitled to it at a higher rate, for the period in respect of which the payment is made,

the payment so made shall be treated as a payment of that pension or allowance; and, if and to the extent that an award of the pension or allowance, or an award at a higher rate, is made for the period in respect of which the payment was made, the payment shall be treated as made in accordance with that award.

(5) Where, apart from section 165A of the principal Act (making of claim a condition of entitlement), a widow falling within subsection (1) above would be entitled to a widow’s pension for any period beginning on or after 11th April 1988, then, notwithstanding anything in that section, she shall be entitled to that pension for that period if she has made a claim for it before the end of the period of twelve months beginning with the passing of this Act.

(6) Where a widow’s late husband died on or after 7th October 1987 and before 11th April 1988 and, apart from section 165A of the principal Act, she would have become entitled to a widow’s allowance on his death, then if either—

(a) she was over the age of 40 but under the age of 55 at the time of his death, or

(b) she would, apart from that section, have been entitled to a widowed mother’s allowance on the cessation of her entitlement to the widow’s allowance,

she shall, notwithstanding anything in that section, be entitled to the widow’s allowance (and, accordingly, in a case falling within paragraph (b) above, to the widowed mother’s allowance) if she has made a claim, or is treated as having made a claim, for it before the end of the period of twelve months beginning with the passing of this Act.

(7) Where in consequence of any of the amending provisions an adjudicating authority has decided before the passing of this Act that a widow whose husband died before 11th April 1988 either—

(a) is not entitled to a benefit under section 25 or 26 of the principal Act, or

(b) is entitled to such a benefit at a particular rate,

an adjudication officer may review that decision, notwithstanding anything in section 104 of the principal Act.

(8) In any case where—

(a) it is determined on such a review that the widow in question was entitled to a benefit under section 25 or 26 of the principal Act, or was entitled to such a benefit at a higher rate, and

(b) the application for the review was made before the end of the period of twelve months beginning with the passing of this Act,

the decision on the review may take effect on 11th April 1988 or any later date, notwithstanding any provision of any Act or instrument restricting the payment of any benefit or increase of benefit to which a person would otherwise be entitled by reason of a review in respect of any period before the review.

(9) Subsection (4) of section 104 of the principal Act (appeals from reviews) shall apply in relation to a review under this section as it applies in relation to a review under that section.

(10) In this section—

• “adjudicating authority” means—

(a) an adjudication officer;

(b) a social security appeal tribunal;

(c) a Commissioner; and

• “the amending provisions” are—

(a) section 36(3) of the 1986 Act; and

(b) regulation 2(6) of the [S.I. 1987/1854.] Social Security (Widow’s Benefit and Retirement Pensions) Amendment Regulations 1987 (deemed entitlement to child allowance for purposes of widowed mother’s allowance etc).

(11) The amendment by this section of provisions contained in regulations shall not be taken to have prejudiced any power to make further regulations revoking or amending those provisions.

(12) Nothing in this section shall be taken to prejudice section 16 or 17 of the [1978 c. 30.] Interpretation Act 1978 (effect of repeals, substitutions etc).

7 Abolition of earnings rule etc

(1) In section 30 of the principal Act, subsection (1) (the earnings rule) shall cease to have effect.

(2) In section 28(1)(a) of that Act (conditions of entitlement to Category A retirement pension) the words “and has retired from regular employment” shall cease to have effect.

(3) In section 29 of that Act (woman’s Category B retirement pension)—

(a) in subsections (2) and (3) (first and second cases of entitlement) in paragraph (a), for the words “both of them have retired from regular employment” there shall be substituted the words “has become entitled to a Category A retirement pension”; and

(b) in subsection (5), paragraph (a) (requirement, in fourth such case, to have retired from regular employment) shall cease to have effect.

(4) For section 12 of the Pensions Act (deferred retirement) there shall be substituted the following—

“12 Increase of retirement pension where entitlement is deferred

(1) Where a person’s entitlement to a Category A or Category B retirement pension is deferred, Schedule 1 to this Act shall have effect for increasing the rate of his pension.

(2) For the purposes of this Act and the principal Act, a person’s entitlement to a Category A or Category B retirement pension is “deferred” if and so long as he does not become entitled to that pension by reason only—

(a) that he has not satisfied the conditions of section 165A of the principal Act (requirement to claim); or

(b) that, in the case of a woman’s Category B retirement pension by virtue of her husband’s contributions, her husband has not satisfied those conditions with respect to his Category A retirement pension;

and, in relation to any such pension, “period of deferment” shall be construed accordingly.”

(5) Subsection (1) above affects the rate of pension to which a person is entitled for the week in which that subsection comes into force as well as any subsequent week (“week” having the same meaning in this subsection as it had in the proviso to the said section 30(1) immediately before its repeal).

(6) The enactments mentioned in Schedule 1 to this Act shall have effect with the amendments there specified.

8 Mobility allowance: increase of age limit to 80 years

(1) In section 37A of the principal Act (mobility allowance), in paragraphs (a) and (aa) of subsection (5) and in subsection (6A) (each of which refers to the age of 75) for “75” there shall be substituted “80”.

(2) For subsection (6B) of that section there shall be substituted—

“(6B) Where, before the coming into force of this subsection, a person has been awarded a mobility allowance for a specified period ending with—

(a) the date on which he will attain pensionable age, or

(b) the date on which he will attain the age of 75,

that award shall have effect as if it referred instead to a period ending with the date on which he will attain the age of 80.”