Part II Contributory Benefits

Retirement pensions (Categories A and B)

F144A Deemed earnings factors

F2A1

Subsections (1) to (4) below apply to the first appointed year or any subsequent tax year before 2010–11.

(1)

For the purposes of section 44(6)(za) above, if any of the conditions in subsection (2) below is satisfied for a relevant year F3to which this subsection applies, a pensioner is deemed to have an earnings factor for that year which—

(a)

is derived from F4so much of his earnings as did not exceed the upper earnings limit and on which primary Class 1 contributions were paid; and

(b)

is equal to the amount which, when added to any other earnings factors taken into account under that provision, produces an aggregate of earnings factors equal to the low earnings threshold.

(2)

The conditions referred to in subsection (1) above are that—

(a)

the pensioner would, apart from this section, have an earnings factor for the year—

(i)

equal to or greater than the qualifying earnings factor for the year; but

(ii)

less than the low earnings threshold for the year;

(b)

F5carer’s allowance—

(i)

was payable to the pensioner throughout the year; or

(ii)

would have been so payable but for the fact that under regulations the amount payable to him was reduced to nil because of his receipt of other benefits;

(c)

for the purposes of paragraph 5(7)(b) of Schedule 3, the pensioner is taken to be precluded from regular employment by responsibilities at home throughout the year by virtue of—

(i)

the fact that child benefit was payable to him in respect of a child under the age of six; or

(ii)

his satisfying such other condition as may be prescribed; or

(d)

the pensioner is a person satisfying the requirement in subsection (3) below to whom long-term incapacity benefit F6or qualifying employment and support allowance was payable throughout the year, or would have been so payable but for the fact that—

(i)

he did not satisfy the contribution conditions specified in paragraph 2 of Schedule 3 F7or, as the case may be, paragraph 1 of Schedule 1 to the Welfare Reform Act (Northern Ireland) 2007; or

(ii)

under regulations the amount payable to him was reduced to nil because of his receipt of other benefits or of payments from an occupational pension scheme or personal pension scheme.

(3)

The requirement referred to in subsection (2)(d) above is that—

(a)

for one or more relevant years the pensioner has paid, or (apart from this section) is treated as having paid, primary Class 1 contributions on earnings equal to or greater than the qualifying earnings factor; and

(b)

the years for which he has such a factor constitute at least one tenth of his working life.

(4)

For the purposes of subsection (3)(b) above—

(a)

a pensioner’s working life shall not include—

(i)

any tax year before 1978-79; or

(ii)

any year in which he is deemed under subsection (1) above to have an earnings factor by virtue of fulfilling the condition in subsection (2)(b) or (c) above; and

(b)

the figure calculated by dividing his working life by ten shall be rounded to the nearest whole year (and any half year shall be rounded down).

F8(4A)

The following do not apply to a pensioner attaining pensionable age on or after 6th April 2010—

(a)

the requirement referred to in subsection (2)(d) above, and

(b)

subsections (3) and (4) above.

(5)

The low earnings threshold for the first appointed year and subsequent tax years shall be £9,500 (but subject to section 130A of the Administration Act).

(6)

In subsection (2)(d)(ii) above, “occupational pension scheme” and “personal pension scheme” have the same meanings as in subsection (6) of section 30DD above for the purposes of subsection (5) of that section.

F9(7)

In subsection (2)(d) “qualifying employment and support allowance” means contributory employment and support allowance where—

(a)

that allowance was payable for a continuous period of 52 weeks;

(b)

that allowance included the support component under section 2(2) of the Welfare Reform Act (Northern Ireland) 2007; or

(c)

in the case of—

(i)

a man born between 6th April 1944 and 5th April 1947, or

(ii)

a woman born between 6th April 1949 and 5th April 1951,

that allowance was payable for a continuous period of 13 weeks immediately following a period throughout which statutory sick pay was payable.