C3C6 Part II Contributory Benefits
Preliminary
22 Earnings factors.
1
A person shall, for the purposes specified in subsection (2) below, be treated as having annual earnings factors derived—
a
in the case of 1987-88 or any subsequent tax year, from F5so much of his earnings as did not exceed the upper earnings limit and upon which primary Class 1 contributions have been paid or treated as paid and from Class 2 and Class 3 contributions; and
b
in the case of any earlier tax year, from his contributions of any of Classes 1, 2 and 3;
but subject to the following provisions of this section and those of section 23 below.
2
The purposes referred to in subsection (1) above are those of—
a
b
calculating the additional pension in the rate of a long-term benefit F19; and
c
establishing entitlement to a state pension under Part 1 of the Pensions Act 2014 and, where relevant, calculating the rate of a state pension under that Part; F20and
d
establishing entitlement to bereavement support payment under section 30 of the Pensions Act 2014.
F42A
For the purposes specified in subsection (2)(b) above, in the case of the first appointed year or any subsequent tax year a person’s earnings factor shall be treated as derived only from F6so much of his earnings as did not exceed F8the applicable limit and on which primary Class 1 contributions have been paid or treated as paid.
F11This subsection does not affect the operation of sections 44A and 44B (deemed earnings factors).
F92B
“The applicable limit” means—
a
in relation to a tax year before F132009-10, the upper earnings limit;
b
in relation to F132009-10 or any subsequent tax year, the upper accrual point.
3
Separate earnings factors may be derived for 1987-88 and subsequent tax years—
a
from earnings F7not exceeding the upper earnings limit upon which primary Class 1 contributions have been paid or treated as paid;
b
from earnings which have been credited;
c
from contributions of different classes paid or credited in the same tax year;
d
by any combination of the methods mentioned in paragraphs (a) to (c) above,
and may be derived for any earlier tax year from contributions of different classes paid or credited in the same tax year, and from contributions which have actually been paid, as opposed to those not paid but credited.
C5C44
Subject to regulations under section 19(4) to (6) above, no earnings factor shall be derived—
a
for 1987-88 or any subsequent tax year, from earnings F3in respect of which primary Class 1 contributions are paid at the reduced rate, or
b
for any earlier tax year, from primary Class 1 contributions paid at the reduced rate or from secondary Class 1 contributions.
5
Regulations may provide for crediting—
C2a
for 1987-88 or any subsequent tax year, earnings or Class 2 or Class 3 contributions, or
b
for any earlier tax year, contributions of any class,
for the purpose of bringing a person’s earnings factor for that tax year to a figure which will enable him to satisfy contribution conditions of entitlement to F2a contribution-based jobseeker’s allowanceF14, to a contributory employment and support allowance or to any prescribed description of benefit (whether his own entitlement or another person’s).
F175ZA
Regulations may provide for crediting—
a
for 1987-88 or any subsequent tax year, earnings or Class 2 or Class 3 contributions, or
b
for any earlier tax year, contributions of any class,
for the purpose of bringing an earnings factor for that tax year to a figure which will make that year a “qualifying year”, “pre-commencement qualifying year” or “post-commencement qualifying year” of a person for the purposes of Part 1 of the Pensions Act 2014 (see sections 2(4) and 4(4) of that Act).
5ZB
Regulations under subsection (5ZA) must provide for crediting a person with such contributions as may be specified in respect of periods on or after 6 April 1975 during which the person was—
a
a spouse or civil partner of a member of Her Majesty's forces,
b
accompanying the member on an assignment outside the United Kingdom, and
c
not of a description specified in the regulations.
F105A
Section 23A makes provision for the crediting of Class 3 contributions for the purpose of determining entitlement to the benefits to which that section applies.
6
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.
7
The M1power to amend regulations made before 30th March 1977 (the passing of the Social Security (Miscellaneous Provisions) Act 1977) under subsection (5) above may be so exercised as to restrict the circumstances in which and the purposes for which a person is entitled to credits in respect of weeks before the coming into force of the amending regulations; but not so as to affect any benefit for a period before the coming into force of the amending regulations if it was claimed before 18th March 1977.
F158
In this section, “contributory employment and support allowance” means a contributory allowance under Part 1 of the Welfare Reform Act 2007 (employment and support allowance).
F129
References in this Act or any other Act to earnings factors derived from so much of a person's earnings as do not exceed the upper accrual point or the upper earnings limit are to be read, in relation to earners paid otherwise than weekly, as references to earnings factors derived from so much of those earnings as do not exceed the prescribed equivalent.
Pt. 2 modified (E.W.S.) (11.11.1999 for specified purposes, 1.12.2000 in so far as not already in force) by Welfare Reform and Pensions Act 1999 (c. 30), ss. 49, 89(5)(a); S.I. 2000/1047, art. 2(2)(d), Sch. Pt. IV