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Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)

(The document as of February, 2008)

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Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)

1992 CHAPTER 7

ARRANGEMENT OF SECTIONS

Content
  1. Part I

    Contributions

    1. Preliminary

      1. 1. Outline of contributory system.

      2. 2. Categories of earners.

      3. 3. "Earnings" and "earner".

      4. 4. Payments treated as remuneration and earnings.

    2. Class 1 contributions

      1. 5. Earnings limits for Class 1 contributions.

      2. 6. Liability for Class 1 contributions.

      3. 7. "Secondary contributor".

      4. 8. Calculation of primary Class 1 contributions.

      5. 9. Calculation of secondary Class 1 contributions.

    3. Class 1A contributions

      1. 10. Class 1A contributions.

    4. Class 2 contributions

      1. 11. Liability for Class 2 contributions.

      2. 12. Late paid Class 2 contributions.

    5. Class 3 contributions

      1. 13. Class 3 contributions.

      2. 14. Restriction on right to pay Class 3 contributions.

    6. Class 4 contributions

      1. 15. Class 4 contributions recoverable under the Income Tax Acts.

      2. 16. Destination of Class 4 contributions.

      3. 17. Exceptions, deferment and incidental matters relating to Class 4 contributions.

      4. 18. Class 4 contributions recoverable under regulations.

    7. General

      1. 19. General power to regulate liability for contributions.

  2. Part II

    Contributory Benefits

    1. Preliminary

      1. 20. Descriptions of contributory benefits.

      2. 21. Contribution conditions.

      3. 22. Earnings factors.

      4. 23. Provisions supplemental to ss. 21 and 22.

      5. 24. Records of earnings and calculation of earnings factors in absence of records.

    2. Unemployment benefit

      1. 25. Unemployment benefit.

      2. 26. Duration of unemployment benefit.

      3. 27. Interruption of employment in connection with trade dispute.

      4. 28. Unemployment benefit - other disqualifications, etc.

      5. 29. Exemptions from disqualification for unemployment benefit.

      6. 30. Abatement of unemployment benefit on account of payments of occupational or personal pension.

    3. Sickness benefit

      1. 31. Sickness benefit.

      2. 32. Sickness benefit - disqualifications, etc.

    4. Invalidity benefits

      1. 33. Invalidity pension.

      2. 34. Invalidity allowance.

    5. Maternity

      1. 35. State maternity allowance.

    6. Benefits for widows and widowers

      1. 36. Widow's payment.

      2. 37. Widowed mother's allowance.

      3. 38. Widow's pension.

      4. 39. Rate of widowed mother's allowance and widow's pension.

      5. 40. Invalidity pension for widows.

      6. 41. Invalidity pension for widowers.

      7. 42. Entitlement to invalidity pension on termination of employment after period of entitlement to disability working allowance.

    7. Retirement pensions (Categories A and B)

      1. 43. Persons entitled to more than one retirement pension.

      2. 44. Category A retirement pension.

      3. 45. The additional pension in a Category A retirement pension.

      4. 46. Modifications of s. 45 for calculating the additional pension in certain benefits.

      5. 47. Increase of Category A retirement pension for invalidity.

      6. 48. Use of former spouse's contributions.

      7. 4

        Provisions relating to unemployment benefit, sickness benefit and invalidity benefit

        1. 57. Determination of days for which benefit is payable.

        2. 58. Incapacity for work: work as councillor to be disregarded.

      8. Invalidity benefit - disqualifications, etc.

        1. 59. Invalidity benefit - disqualifications, etc.

      9. Partial satisfaction of contribution conditions

        1. 60. Partial satisfaction of contribution conditions.

        2. 61. Exclusion of increase of benefit for failure to satisfy contribution condition.

      10. Graduated retirement benefit

        1. 62. Graduated retirement benefit.

    8. Part III

      Non-Contributory Benefits

      1. 63. Descriptions of non-contributory benefits.

      2. Attendance allowance

        1. 64. Entitlement.

        2. 65. Period and rate of allowance.

        3. 66. Attendance allowance for the terminally ill.

        4. 67. Exclusions by regulation.

      3. Severe disablement allowance

        1. 68. Entitlement and rate.

        2. 69. Severe disablement allowance: age related addition.

      4. Invalid care allowance

        1. 70. Invalid care allowance.

      5. Disability living allowance

        1. 71. Disability living allowance.

        2. 72. The care component.

        3. 73. The mobility component.

        4. 74. Mobility component for certain persons eligible for invalid carriages.

        5. 75. Persons 65 or over.

        6. 76. Disability living allowance - supplementary.

      6. Guardian's allowance

        1. 77. Guardian's allowance.

      7. Benefits for the aged

        1. 78. Category C and Category D retirement pensions and other benefits for the aged.

        2. 79. Age addition.

    9. Part IV

      Increases for dependants

      1. Child dependants

        1. 80. Beneficiary's dependent children.

        2. 81. Restrictions on increase - child not living with beneficiary, etc.

      2. Adult dependants

        1. 82. Short-term benefit: increase for adult dependants.

        2. 83. Pension increase (wife).

        3. 84. Pension increase (husband).

        4. 85. Pension increase (person with care of children).

        5. 86. Increase of woman's invalidity pension (husband).

        6. 87. Rate of increase where associated retirement pension is attributable to reduced contributions.

        7. 88. Pension increases to be in respect of only one adult dependant.

      3. Miscellaneous

        1. 89. Earnings to include occupational and personal pensions for purposes of provisions relating to increases of benefits in respect of child or adult dependants.

        2. 90. Beneficiaries under sections 68 and 70.

        3. 91. Effect of trade disputes on entitlement to increases.

        4. 92. Dependency increases: continuation of awards in cases of fluctuating earnings.

        5. 93. Dependency increases on termination of employment after period of entitlement to disability working allowance.

    10. Part V

      Benefit for Industrial Injuries

      1. General provisions

        1. 94. Right to industrial injuries benefit.

        2. 95. Relevant employments.

        3. 96. Persons treated as employers for certain purposes.

        4. 97. Accidents in course of illegal employments.

        5. 98. Earner acting in breach of regulations, etc.

        6. 99. Earner travelling in employer's transport.

        7. 100. Accidents happening while meeting emergency.

        8. 101. Accident caused by another's misconduct, etc.

      2. Sickness benefit

        1. 102. Sickness benefit in respect of industrial injury.

      3. Disablement pension

        1. 103. Disablement pension.

        2. 104. Increase where constant attendance needed.

        3. 105. Increase for exceptionally severe disablement.

      4. Other benefits and increases

        1. 106. Benefits and increases subject to qualifications as to time.

      5. Successive accidents

        1. 107. Adjustments for successive accidents.

      6. Prescribed industrial diseases, etc.

        1. 108. Benefit in respect of prescribed industrial diseases, etc.

        2. 109. General provisions relating to benefit under s. 108.

        3. 110. Respiratory diseases.

      7. Old cases

        1. 111. Workmen's compensation, etc.

    11. Part VI

      Miscellaneous Provisions relating to

    12. Parts I to V

      1. Earnings

        1. 112. Certain sums to be earnings.

      2. Disqualification and suspension

        1. 113. General provisions as to disqualification and suspension.

      3. Persons maintaining dependants, etc.

        1. 114. Persons maintaining dependants, etc.

      4. Special cases

        1. 115. Crown employment - Parts I to VI.

        2. 116. Her Majesty's forces.

        3. 117. Mariners, airmen, etc.

        4. 118. Married women and widows.

        5. 119. Persons outside Northern Ireland.

        6. 120. Treatment of certain marriages.

      5. Interpretation

        1. 121. Interpretation of Parts I to VI and supplementary provisions.

    13. Part VII

      Income-Related Benefits

      1. General

        1. 122. Income-related benefits.

      2. Income support

        1. 123. Income support.

        2. 124. Severe hardship cases.

        3. 125. Trade disputes.

        4. 126. Effect of return to work.

      3. Family credit

        1. 127. Family credit.

      4. Disability working allowance

        1. 128. Disability working allowance.

      5. Housing benefit

        1. 129. Housing benefit.

      6. General

        1. 130. Exclusions from benefit.

        2. 131. The applicable amount.

        3. 132. Income and capital.

        4. 133. Interpretation of Part VII and supplementary provisions.

    14. Part VIII

      The Social Fund

      1. 134. Payments out of the social fund.

      2. 135. Awards by social fund officers.

      3. 136. Principles of determination.

    15. Part IX

      Child Benefit

      1. 137. Child benefit.

      2. 138. Meaning of "child".

      3. 139. Meaning of "person responsible for child".

      4. 140. Exclusions and priority.

      5. 141. Rate of child benefit.

      6. 142. Persons outside Northern Ireland.

      7. 143. Interpretation of Part IX and supplementary provisions.

    16. Part X

      Christmas bonus for pensioners

      1. 144. Entitlement of pensioners to Christmas bonus.

      2. 145. Provisions supplementary to s. 144.

      3. 146. Interpretation of Part X.

    17. Part XI

      Statutory Sick Pay

      1. 147. Employer's liability.

      2. The qualifying conditions

        1. 148. Period of incapacity for work.

        2. 149. Period of entitlement.

        3. 150. Qualifying days.

      3. Limitations on entitlement, etc.

        1. 151. Limitations on entitlement.

        2. 152. Notification of incapacity for work.

      4. Rate of payment, etc.

        1. 153. Rate of payment.

        2. 154. Recovery by employers of amounts paid by way of statutory sick pay.

        3. 155. Power to substitute provisions for s. 154(2).

      5. Miscellaneous

        1. 156. Relationship with benefits and other payments, etc.

        2. 157. Crown employment - Part XI.

        3. 158. Special classes of persons.

        4. 159. Interpretation of Part XI and supplementary provisions.

    18. Part XII

      Statutory Maternity Pay

      1. 160. Statutory maternity pay - entitlement and liability to pay.

      2. 161. The maternity pay period.

      3. 162. Rates of payment.

      4. 163. Recovery of amounts paid by way of statutory maternity pay.

      5. 164. Relationship with benefits and other payments, etc.

      6. 165. Crown employment - Part XII.

      7. 166. Special classes of persons.

      8. 167. Interpretation of Part XII, etc.

    19. Part XIII

      General

      1. Interpretation

        1. 168. Application of Act in relation to territorial waters.

        2. 169. Age.

        3. 170. Interpretation.

      2. Subordinate legislation

        1. 171. Regulations and orders - general.

        2. 172. Assembly, etc. control of regulations and orders.

      3. Supplementary

        1. 173. Short title, commencement and extent.

      1. Schedule 1

        Supplementary provisions relating to contributions of Classes 1, 1A, 2 and 3.

      2. Schedule 2

        Schedule 2 to the Social Security Contributions and Benefits Act 1992: levy of Class 4 contributions with income tax.

      3. Schedule 3

        Contribution conditions for entitlement to benefit.

        1. Part I

          The conditions.

        2. Part II

          Satisfaction of conditions in early years of contribution.

      4. Schedule 4

        Rates of benefits, etc.

        1. Part I

          Contributory periodical benefits.

        2. Part II

          Widow's payment.

        3. Part III

          Non-contributory periodical benefits.

        4. Part IV

          Increases for dependants.

        5. Part V

          Rate of industrial injuries benefit.

      5. Schedule 5

        Increase of pension where entitlement is deferred.

      6. Schedule 6

        Assessment of extent of disablement.

      7. Schedule 7

        Industrial injuries benefits.

        1. Part I

          Unemployability supplement.

        2. Part II

          Disablement gratuity.

        3. Part III

          Increase of disablement pension during hospital treatment.

        4. Part IV

          Reduced earnings allowance.

        5. Part V

          Retirement allowance.

        6. Part VI

          Industrial death benefit.

      8. Schedule 8

        Industrial injuries and diseases (old cases).

        1. Part I

          Workmen's compensation and industrial diseases benefit in respect of employment before 5th July 1948.

        2. Part II

          Regulations providing for benefit for pre-1948 cases.

        3. Part III

          Interpretation.

      9. Schedule 9

        Exclusions from entitlement to child benefit.

      10. Schedule 10

        Priority between persons entitled to child benefit.

      11. Schedule 11

        Circumstances in which periods of entitlement to statutory sick pay do not arise.

      12. Schedule 12

        Relationship of statutory sick pay with benefits and other payments, etc.

      13. Schedule 13

        Relationship of statutory maternity pay with benefits and other payments, etc.

An Act to consolidate for Northern Ireland certain enactments relating to social security contributions and benefits, with corrections and minor improvements under the Consolidation of Enactments (Procedure) Act 1949.

[13th February 1992]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:--



Part I Contributions

Preliminary

1 Outline of contributory system

(1) The funds required--

(a) for paying such benefits under this Act as are payable out of the National Insurance Fund and not out of other public money; and

(b) for the making of payments under section 142 of the Administration Act towards the cost of the health service,

shall be provided by means of contributions payable to the Department by earners, employers and others, together with the additions under subsection (5) below.

(2) Contributions under this Part of this Act shall be of the following five classes--

(a) Class 1, earnings-related, payable under section 6 below, being--

(i) primary Class 1 contributions from employed earners; and

(ii) secondary Class 1 contributions from employers and other persons paying earnings;

(b) Class 1A, payable under section 10 below in respect of cars made available for private use and car fuel by persons liable to pay secondary Class 1 contributions and certain other persons;

(c) Class 2, flat-rate, payable weekly under section 11 below by self-employed earners;

(d) Class 3, payable under section 13 below by earners and others voluntarily with a view to providing entitlement to benefit, or making up entitlement; and

(e) Class 4, payable under section 15 below in respect of the profits or gains of a trade, profession or vocation, or under section 18 below in respect of equivalent earnings.

(3) The amounts and rates of contributions in this Part of this Act and the other figures in it which affect the liability of contributors shall--

(a) be subject to regulations under sections 19(4) and 116 to 119 below; and

(b) to the extent provided for by section 129 of the Administration Act be subject to alteration by orders made under that section,

and the provisions of this Part of this Act are subject to the provisions of Part IV of the Pensions Order (contracting-out - reduced rates of contributions).

(4) Schedule 1 to this Act--

(a) shall have effect with respect to the computation, collection and recovery of contributions of Classes 1, 1A, 2 and 3, and otherwise with respect to contributions of those classes; and

(b) shall also, to the extent provided by regulations made under section 18 below, have effect with respect to the computation, collection and recovery of Class 4 contributions, and otherwise with respect to such contributions, where under that section provision is made for contributions of that class to be recovered by the Department and not by the Inland Revenue under section 16(1) to (3) of the Great Britain Contributions and Benefits Act.

(5) For each financial year there shall, by way of addition to contributions, be paid out of money hereafter appropriated for that purpose, in such manner and at such times as the Department of Finance and Personnel may determine, amounts the total of which for any such year is equal to the aggregate of all statutory sick pay and statutory maternity pay recovered by employers and others in that year, as estimated by the Department.

(6) No person shall--

(a) be liable to pay Class 1, Class 1A or Class 2 contributions unless he fulfils prescribed conditions as to residence or presence in Northern Ireland;

(b) be entitled to pay Class 3 contributions unless he fulfils such conditions; or

(c) be entitled to pay Class 1, Class 1A or Class 2 contributions other than those which he is liable to pay, except so far as he is permitted by regulations to pay them.

2 Categories of earners

(1) In this Part of this Act and Parts II to V--

(a) "employed earner" means a person who is gainfully employed in Northern Ireland either under a contract of service, or in an office (including elective office) with emoluments chargeable to income tax under Schedule E; and

(b) "self-employed earner" means a person who is gainfully employed in Northern Ireland otherwise than in employed earner's employment (whether or not he is also employed in such employment).

(2) Regulations may provide--

(a) for employment of any prescribed description to be disregarded in relation to liability for contributions otherwise arising from employment of that description;

(b) for a person in employment of any prescribed description to be treated, for the purposes of this Act, as falling within one or other of the categories of earner defined in subsection (1) above, notwithstanding that he would not fall within that category apart from the regulations.

(3) Where a person is to be treated by reference to any employment of his as an employed earner, then he is to be so treated for all purposes of this Act; and references throughout this Act to employed earner's employment shall be construed accordingly.

(4) Subsections (1) to (3) above are subject to the provision made by section 95 below as to the employments which are to be treated, for the purposes of industrial injuries benefit, as employed earner's employments.

(5) For the purposes of this Act, a person shall be treated as a self-employed earner as respects any week during any part of which he is such an earner (without prejudice to his being also treated as an employed earner as respects that week by reference to any other employment of his).

3 "Earnings" and "earner"

(1) In this Part of this Act and Parts II to V--

(a) "earnings" includes any remuneration or profit derived from an employment; and

(b) "earner" shall be construed accordingly.

(2) For the purposes of this Part of this Act and of Parts II to V other than those of Schedule 8--

(a) the amount of a person's earnings for any period; or

(b) the amount of his earnings to be treated as comprised in any payment made to him or for his benefit,

shall be calculated or estimated in such manner and on such basis as may be prescribed.

(3) Regulations made for the purposes of subsection (2) above may prescribe that payments of a particular class or description made or falling to be made to or by a person shall, to such extent as may be prescribed, be disregarded or, as the case may be, be deducted from the amount of that person's earnings.

4 Payments treated as remuneration and earnings

(1) For the purposes of section 3 above there shall be treated as remuneration derived from employed earner's employment--

(a) any sum paid to or for the benefit of a person in satisfaction (whether in whole or in part) of any entitlement of that person to--

(i) statutory sick pay; or

(ii) statutory maternity pay; and

(b) any sickness payment made--

(i) to or for the benefit of the employed earner; and

(ii) in accordance with arrangements under which the person who is the secondary contributor in relation to the employment concerned has made, or remains liable to make, payments towards the provision of that sickness payment.

(2) Where the funds for making sickness payments under arrangements of the kind mentioned in paragraph (b) of subsection (1) above are attributable in part to contributions to those funds made by the employed earner, regulations may make provision for disregarding, for the purposes of that subsection, the prescribed part of any sum paid as a result of the arrangements.

(3) For the purposes of subsections (1) and (2) above "sickness payment" means any payment made in respect of absence from work due to incapacity for work, within the meaning of section 57 below.

(4) For the purposes of section 3 above there shall be treated as remuneration derived from an employed earner's employment any sum paid to or for the benefit of an employed earner which is chargeable to tax by virtue of section 313 of the [1988 c. 1.] Income and Corporation Taxes Act 1988 (taxation of consideration for certain restrictive undertakings) otherwise than by virtue of subsection (4) of that section.

(5) For the purposes of section 3 above regulations may make provision for treating as remuneration derived from an employed earner's employment any payment made by a body corporate to or for the benefit of any of its directors where that payment would, when made, not be earnings for the purposes of this Act.



Class 1 contributions

5 Earnings limits for Class 1 contributions

(1) For the purposes of this Act there shall for every tax year be--

(a) a lower earnings limit for Class 1 contributions, being the level of weekly earnings at which employed earners become liable for such contributions in respect of the earnings from their employments; and

(b) an upper earnings limit for Class 1 contributions, being the maximum amount of weekly earnings in respect of which primary Class 1 contributions are payable;

and those limits shall be the amounts specified for that year by regulations made in accordance with subsections (2) and (3) below.

(2) The amount specified as the lower earnings limit for any tax year shall be an amount equal to or not more than 99p less than--

(a) the sum which at the beginning of that year is specified in section 44(4) below as the weekly rate of the basic pension in a Category A retirement pension; or

(b) that sum as increased by any Act, Measure or order passed, enacted or made before the beginning of that year and taking effect before 6th May in that year.

(3) The amount specified as the upper earnings limit for any tax year shall be an amount which either--

(a) is equal to 7 times the sum by reference to which the lower earnings limit for that year is specified in accordance with subsection (2) above; or

(b) exceeds or falls short of 7 times that sum by an amount not exceeding half that sum.

6 Liability for Class 1 contributions

(1) Where in any tax week earnings are paid to or for the benefit of an earner in respect of any one employment of his which is employed earner's employment and--

(a) he is over the age of 16; and

(b) the amount paid is equal to or exceeds the current lower earnings limit for Class 1 contributions (or the prescribed equivalent in the case of earners paid otherwise than weekly),

a primary and a secondary Class 1 contribution shall be payable in accordance with this section and sections 8 and 9 below.

(2) Except as may be prescribed, no primary Class 1 contribution shall be payable in respect of earnings paid to or for the benefit of an employed earner after he attains pensionable age, but without prejudice to any liability to pay secondary Class 1 contributions in respect of any such earnings.

(3) The primary and secondary Class 1 contributions referred to in subsection (1) above are payable as follows--

(a) the primary contribution shall be the liability of the earner; and

(b) the secondary contribution shall be the liability of the secondary contributor;

but nothing in this subsection shall prejudice the provisions of paragraph 3 of Schedule 1 to this Act relating to the manner in which the earner's liability falls to be discharged.

(4) Except as provided by this Act, the primary and secondary Class 1 contributions in respect of earnings paid to or for the benefit of an earner in respect of any one employment of his shall be payable without regard to any other such payment of earnings in respect of any other employment of his.

(5) Regulations may provide for reducing primary or secondary Class 1 contributions which are payable in respect of persons to whom section 11 of the [1965 c. 19 (N.I.).] Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965 (redundancy payments) does not apply by virtue of section 26(1) or (5) of that Act.

(6) The power conferred by subsection (1) above to prescribe an equivalent of the lower earnings limit includes power to prescribe an amount which exceeds, by not more than £1.00, the amount which is the arithmetical equivalent of that limit.

7 "Secondary contributor"

(1) For the purposes of this Act, the "secondary contributor" in relation to any payment of earnings to or for the benefit of an employed earner, is--

(a) in the case of an earner employed under a contract of service, his employer;

(b) in the case of an earner employed in an office with emoluments, either--

(i) such person as may be prescribed in relation to that office; or

(ii) if no person is prescribed, the government department, public authority or body of persons responsible for paying the emoluments of the office;

but this subsection is subject to subsection (2) below.

(2) In relation to employed earners who--

(a) are paid earnings in a tax week by more than one person in respect of different employments; or

(b) work under the general control or management of a person other than their immediate employer,

and in relation to any other case for which it appears to the Department that such provision is needed, regulations may provide that the prescribed person is to be treated as the secondary contributor in respect of earnings paid to or for the benefit of an earner.

8 Calculation of primary Class 1 contributions

(1) 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 earner's 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 current upper earnings limit;

but this subsection is subject to regulations under section 6(5) above and sections 116 to 119 below and to Article 29 of the Pensions Order (contracted-out rates).

(2) 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 section 129 of the Administration Act.

(3) In the case of earners paid otherwise than weekly, any reference in subsection (1) 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.

(4) The power conferred by subsection (3) above to prescribe an equivalent of a limit includes power to prescribe an amount which exceeds, by not more than £1.00, the amount which is the arithmetical equivalent of that limit.

9 Calculation of secondary Class 1 contributions

(1) Where a secondary Class 1 contribution is payable, the amount of that contribution shall be the appropriate secondary percentage of the earnings paid in the week in respect of the employment in question.

(2) For the purposes of subsection (1) above, the "appropriate secondary percentage", in relation to the earner's earnings, is the percentage specified in subsection (3) below as appropriate to the secondary earnings bracket (or the prescribed equivalent in the case of earners paid otherwise than weekly) into which those earnings fall.

(3) The secondary earnings brackets and the percentages appropriate to them shall be as set out below--

Weekly earningsAppropriate percentage
Bracket 1Current lower earnings limit to £89.994.6 per cent.
Bracket 2ВЈ90.00 to £134.996.6 per cent.
Bracket 3ВЈ135.00 to £189.998.6 per cent.
Bracket 4ВЈ190.00 or more10.4 per cent.

(4) Subsections (1) and (3) above are subject as mentioned below, that is to say--

(a) subsection (1) is subject to Article 29 of the Pensions Order and to regulations under section 6(5) above and sections 116 to 119 below;

(b) subsection (3) is subject to any order under section 129 of the Administration Act.

(5) The power conferred by subsection (2) above to prescribe an equivalent of a bracket includes power to prescribe an amount which exceeds, by not more than £1.00, the amount which is the arithmetical equivalent of that bracket.



Class 1A contributions

10 Class 1A contributions

(1) Where--

(a) for any tax year an amount in respect of a car is by virtue of section 157 of the [1988 c. 1.] Income and Corporation Taxes Act 1988 chargeable on an earner to income tax under Schedule E; and

(b) the employment by reason of which the car is made available is employed earner's employment,

a Class 1A contribution shall be payable for that tax year, in accordance with this section, in respect of the earner and car in question.

(2) The Class 1A contribution referred to in subsection (1) above is payable by--

(a) the person who is liable to pay the secondary Class 1 contribution relating to the last (or only) relevant payment of earnings in the tax year in relation to which there is a liability to pay such a contribution; or

(b) if no such contribution is payable in relation to a relevant payment of earnings in the tax year, the person who would be liable but for section 6(1)(b) above to pay a secondary Class 1 contribution relating to the last (or only) relevant payment of earnings in the tax year.

(3) A payment of earnings is a "relevant payment of earnings" for the purposes of subsection (2) above if it is made to or for the benefit of the earner in respect of the employment by reason of which the car is made available.

(4) The amount of the Class 1A contribution referred to in subsection (1) above shall be--

(a) the Class 1A percentage of the cash equivalent of the benefit of the car to the earner in the tax year; or

(b) where for the tax year an amount in respect of fuel for the car is by virtue of section 158 of the [1988 c. 1.] Income and Corporation Taxes Act 1988 also chargeable on the earner to income tax under Schedule E, the aggregate of--

(i) the Class 1A percentage of the cash equivalent of the benefit of the fuel to the earner in the tax year; and

(ii) the amount mentioned in paragraph (a) above,

the cash equivalents of the benefit of a car or fuel being ascertained, subject to the provisions of this section, in accordance with section 157 or, as the case may be, 158 of the Income and Corporation Taxes Act 1988 and Schedule 6 to that Act.

(5) In subsection (4) above "the Class 1A percentage" means a percentage rate equal to the percentage rate for secondary Class 1 contributions specified in section 9(3) above as appropriate for the highest secondary earnings bracket for the tax year in question.

(6) In calculating for the purposes of subsection (4) above the cash equivalent of the benefit of a car or fuel--

(a) the car shall not be treated as being unavailable on a day by virtue of paragraph 2(2)(b) of Schedule 6 to the [1988 c. 1.] Income and Corporation Taxes Act 1988 for the purposes of section 158(5) of that Act or paragraph 2(2), 3(2) or 5(2) of that Schedule, unless the person liable to pay the contribution has information to show that the condition specified in paragraph 2(2)(b) is satisfied as regards that day;

(b) the use of the car for the earner's business travel shall be taken--

(i) for the purposes of section 158(5) of that Act and sub-paragraph (1) of paragraph 3 of that Schedule to have amounted to less than 18,000 miles (or such lower figure as is applicable by virtue of sub-paragraph (2) of that paragraph); and

(ii) for the purposes of sub-paragraph (1) of paragraph 5 of that Schedule to have amounted to not more than 2,500 miles (or such lower figure as is applicable by virtue of sub-paragraph (2) of that paragraph),

unless in either case the person liable to pay the contribution has information to show the contrary; and

(c) for the purposes of paragraph 5(3) of that Schedule, the car shall be treated as not having been the car used to the greatest extent for the employee's business travel, unless the person liable to pay the contribution has information to show the contrary.

(7) Regulations may make such amendments of this section as appear to the Department to be necessary or expedient in consequence of any alteration to section 157 or 158 of the [1988 c. 1.] Income and Corporation Taxes Act 1988 or Schedule 6 to that Act.

(8) A person shall be liable to pay different Class 1A contributions in respect of different earners, different cars and different tax years.

(9) Regulations may provide--

(a) for persons to be excepted in prescribed circumstances from liability to pay Class 1A contributions;

(b) for reducing Class 1A contributions in prescribed circumstances.



Class 2 contributions

11 Liability for Class 2 contributions

(1) Every self-employed earner who is over the age of 16 shall be liable to pay Class 2 contributions at the rate of £5.35 a week, subject to the provisions of this section and sections 12 and 19(4)(b) below.

(2) No Class 2 contributions shall be payable by an earner in respect of any period after he attains pensionable age.

(3) Regulations may make provision so that an earner is liable for a weekly rate of Class 2 contributions higher than that specified in subsection (1) above where--

(a) in respect of any employment of his, he is treated by regulations under section 2(2)(b) above as being a self-employed earner; and

(b) in any period or periods he has earnings from that employment and--

(i) those earnings are such that (disregarding their amount) he would be liable for Class 1 contributions in respect of them if he were not so treated in respect of the employment, and

(ii) no Class 4 contribution is payable in respect of the earnings by virtue of regulations under section 18(1) below.

(4) Regulations may provide for an earner otherwise liable for Class 2 contributions in respect of employment as a self-employed earner to be excepted from the liability in respect of any period in which his earnings from such employment are, or are treated by regulations as being, less than £3,030 a tax year.

(5) Regulations made for the purposes of subsection (4) above shall not except a person from liability to pay contributions otherwise than on his own application, but may provide for so excepting a person with effect from any date not earlier than 13 weeks before the date on which his application was made.

12 Late paid Class 2 contributions

(1) This section applies to any Class 2 contribution paid in respect of a week falling within a tax year ("the contribution year") earlier than the tax year in which it is paid ("the payment year").

(2) Subject to subsections (3) to (5) below, the amount of a contribution to which this section applies shall be the amount which the earner would have had to pay if he had paid the contribution in the contribution year.

(3) Subject to subsections (4) to (6) below, in any case where--

(a) the earner pays an ordinary contribution to which this section applies after the end of the tax year immediately following the contribution year; and

(b) the weekly rate of ordinary contributions for the week in respect of which the contribution was payable in the contribution year differs from the weekly rate applicable at the time of payment in the payment year,

the amount of the contribution shall be computed by reference to the highest weekly rate of ordinary contributions in the period beginning with the week in respect of which the contribution is paid and ending with the day on which it is paid.

(4) The Department may by regulations direct that subsection (3) above shall have effect in relation to a higher-rate contribution to which this section applies subject to such modifications as may be prescribed.

(5) Subject to subsection (6) below, for the purposes of proceedings in any court relating to an earner's failure to pay Class 2 contributions, the amount of each contribution which he is to be treated as having failed to pay is the amount which he would have paid in accordance with subsections (1) to (3) above or regulations under subsection (6) below if he had paid that contribution on the date on which the proceedings commenced.

(6) The Department may by regulations provide that the amount of any contribution which, apart from the regulations, would fall to be computed in accordance with subsection (3) or (5) above shall instead be computed by reference to a tax year not earlier than the contribution year but earlier--

(a) in a case falling within subsection (3) above, than the payment year; and

(b) in a case falling within subsection (5) above, than the tax year in which the proceedings commenced.

(7) For the purposes of this section--

(a) proceedings in the High Court or a county court commence when an action commences; and

(b) proceedings under section 108 of the Administration Act (offences relating to contributions) commence when a complaint is made.

(8) In this section--

  • "ordinary contribution" means a contribution under section 11(1) above; and

  • "higher-rate contribution" means a contribution under regulations made under section 11(3) above.



Class 3 contributions

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13 Class 3 contributions

(1) Regulations shall provide for earners and others, if over the age of 16, to be entitled if they so wish, but subject to any prescribed conditions, to pay Class 3 contributions; and, subject to the following provisions of this section, the amount of a Class 3 contribution shall be £5.25.

(2) Payment of Class 3 contributions shall be allowed only with a view to enabling the contributor to satisfy contribution conditions of entitlement to benefit by acquiring the requisite earnings factor for the purposes described in section 22 below.

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