Social Security Pensions Act 1975

PART I Contributions

1 Earnings limits

(1) For the purposes of the [1975 c. 14.] Social Security Act 1975 (in this Act referred to as " the principal Act ") and this Act—

(a) the lower earnings limit for Class 1 contributions (level of weekly earnings at which liability for such contributions arises); and

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

for any tax year shall be such amounts as may be 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 49p less than—

(a) the sum which at the beginning of that year is specified in section 6(1)(a) below; or

(b) that sum as increased by any Act or order passed 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 seven 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 seven times that sum by an amount not exceeding half that sum.

2 Rates of contributions in respect of employed earners

(1) In section 4(6) of the principal Act (rates of Class 1 contributions)—

(a) for the reference to 5.5 per cent, (primary contribution) there shall be substituted a reference to 6-5 per cent.; and

(b) for the reference to 8.5 per cent, (secondary contribution) there shall be substituted a reference to 10 per cent.

(2) Subsection (1) above is without prejudice to the power conferred by section 122 of the principal Act to alter the percentage rates for primary and secondary Class 1 contributions ; and if that subsection comes into force without any order having been made under that section altering either or both of the rates specified in that subsection the Secretary of State shall lay before Parliament a report explaining why he considers those rates to be appropriate.

3 Married women and widows

(1) The provisions of the principal Act whereby primary Class 1 contributions may be paid at a reduced rate and Class 2 contributions need not be paid by a married woman or widow shall cease to have effect.

(2) As respects any woman who is married or a widow when subsection (1) above comes into force regulations shall provide—

(a) for enabling her to elect that her liability in respect of primary Class 1 contributions shall be a liability to contribute at such reduced rate as may be prescribed; and

(b) either for enabling her to elect that her liability in respect of Class 2 contributions shall be a liability to contribute at such reduced rate as may be prescribed or for enabling her to elect that she shall be under no liability to pay such contributions ; and

(c) for enabling her to revoke any such election.

(3) Regulations under subsection (2) above may—

(a) provide for the making or revocation of any election under the regulations to be subject to prescribed exceptions and conditions;

(b) preclude a person who has made such an election from paying Class 3 contributions while the election has effect;

(c) provide for treating an election made or revoked for the purpose of any provision of the regulations as made or revoked also for the purpose of any other provision of the regulations;

(d) provide for treating an election made in accordance with regulations under section 130(2) of the principal Act as made for the purpose of regulations under this section.

(4) Regulations may provide for earnings factors to be derived, for such purposes as may be prescribed, from contributions which by virtue of regulations under subsection (2) above are paid at a reduced rate; and if provision is made for a person to have earnings factors so derived for the purpose of establishing entitlement to any benefit, the regulations may, in relation to that person, vary or add to the requirements for entitlement to that benefit.

4 Persons over pensionable age

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

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

(3) In section 9(8)(b) of the principal Act (exception from liability to pay Class 4 contributions for persons who have attained pensionable age and retired from regular employment) the words " and retired from regular employment" shall be omitted.

5 Voluntary contributions

(1) No person shall be entitled to pay a Class 3 contribution in respect of any tax year if his earnings factor, or the aggregate of his earnings factors, for that year derived from contributions actually paid is equal to or exceeds the qualifying earnings factor for that year; and regulations may provide for precluding the payment of Class 3 contributions in other cases.

(2) Regulations may provide for the repayment of Class 3 contributions that have been paid in cases where their payment was precluded by, or by regulations made under, subsection (1) above; and contributions repayable by virtue of any such regulations shall, for the purpose of determining the contributor's entitlement to any benefit, be treated as not having been paid.

(3) In subsection (1) above and in the subsequent provisions of this Act " qualifying earnings factor", in relation to any tax year, means an earnings factor equal to the lower earnings limit for that year multiplied by 52.