The Social Security (Contributions) (Amendment) Regulations 2009

Amendment of the Social Security (Contributions) Regulations 2001

3.—(1) Amend regulation 11 (prescribed equivalents) as follows.

(2) In paragraph (1)—

(a) at the end of sub-paragraph (a) omit “and”;

(b) after sub-paragraph (a) insert—

“(aa) section 22 of the Act (earnings factors)(1); and”; and

(c) for sub-paragraph (b) substitute—

“(b) sections 41(1) (reduced rates of Class 1 contributions), 42A(1) (reduced rates of Class 1 contributions and rebates) and 45(1) (amount of minimum contributions) of the Pensions Act(2),”.

(3) After paragraph (1) insert—

“(1A) The prescribed equivalents of the upper accrual point(3) for the purposes of—

(a) section 22 of the Act (earnings factors); and

(b) sections 41(1) (reduced rates of Class 1 contributions), 42A(1) (reduced rates of Class 1 contributions and rebates) and 45(1) (amount of minimum contributions) of the Pensions Act,

shall be determined in accordance with paragraphs (2), (4) and (5).”.

(4) In paragraph (2) for the introductory words and sub-paragraph (a) substitute—

“(2) Subject to paragraphs (4) and (5), the prescribed equivalents of the lower earnings limit and the upper accrual point shall be—

(a) where the earnings period is a multiple of a week, the amounts calculated by multiplying the lower earnings limit or the upper accrual point (“the weekly limits”) by the corresponding multiple;”.

(5) After paragraph (2) insert—

“(2A) Subject to paragraphs (4) and (5), the prescribed equivalents of the upper earnings limit shall be—

(a) where the earnings period is a month, £3,656;

(b) where the earnings period is a year, £43,875;

(c) where the earnings period is a multiple of a week, the amount calculated by dividing the figure in sub-paragraph (b) by 52 and multiplying the result by the corresponding multiple;

(d) where the earnings period is a multiple of a month, the amount calculated by dividing the figure in sub-paragraph (b) by 12 and multiplying the result by the corresponding multiple;

(e) in any other case, the amount calculated by dividing the figure in sub-paragraph (b) by 365 and multiplying the result by the number of days in the earnings period concerned.”.

(6) Amend paragraph (3)(4) as follows—

(a) in sub-paragraph (a) for “£453” substitute “£476”; and

(b) in sub-paragraph (b) for “£5,435” substitute “£5,715”.

(7) For paragraph (4) substitute—

“(4) The amounts determined in accordance with paragraphs (2)(b) and (c), paragraph (2A)(c) and (d) and paragraph (3)(c) and (d) if not whole pounds, shall be rounded up to the next whole pound.”.

(8) In paragraph (5) for “paragraph (2)(d) and paragraph (3)(e)” substitute “paragraph (2)(d), paragraph (2A)(e) and paragraph (3)(e)”.

(9) After paragraph (5) insert—

“(6) The following provisions of this regulation do not apply to Northern Ireland—

(a) paragraph (1A), and

(b) both references to “the upper accrual point” in paragraph (2), so that the term “the weekly limits” shall be read as referring only to the lower earnings limit in relation to Northern Ireland.”.

(1)

Section 22 of the Social Security Contributions and Benefits Act 1992 Act was amended by the Pensions Act 2007 (c.22) to refer to the upper accrual point. Section 22 was then amended by section 3(2) of the National Insurance Contributions Act 2008 (c.16) to introduce the upper accrual point for the tax year 2009-10 and subsequent years and also by paragraph 2 of Schedule 1 to that Act to include a reference to “the prescribed equivalent”.

(2)

Section 41(1) of the Pension Schemes Act 1993 (c. 48) (“the 1993 Act”) was amended by paragraph 37 to Schedule 1 to the Pensions Act 2007. Section 41, 42A and 45 of the 1993 Act were amended by paragraphs 10, 11 and 12 of Schedule 1 to the National Insurance Contributions Act 2008 to refer to the upper accrual point.

(3)

The term “upper accrual point” is defined in section 122 of the Social Security Contributions and Benefits Act 1992. This term was introduced by section 12 of the Pensions Act 2007 and the definition of upper accrual point was amended by section 3(4) of the National Insurance Contributions Act 2008.

(4)

Regulation 11(3) was amended by regulation 4 of S.I. 2008/133; there are other amending instruments but none is relevant.