C1C2 Part III Certification of Pension Schemes and Effects on Members’ State Scheme Rights and Duties
Chapter II Reduction in State Scheme Contributions and Social Security Benefits for Members of Certified Schemes
F12 Reduced rates of contributions, and rebates, for members of money purchase contracted-out schemes
S. 38A and the cross-heading inserted (14.3.1996 for certain purposes and 6.4.1996 for other specified purposes otherwise 6.4.1997) by S.I. 1995/3213 (N.I. 22), art. 134(4); S.R. 1996/91, art. 2(a)(d), Sch. Pts. I IV; S.R. 1997/192, art. 2(b)
38AF1 Reduced rates of Class 1 contributions and rebates.
F21
Subsections (2) to F3(2D) and (3) apply where—
a
the earnings paid to or for the benefit of an earner in any tax week are in respect of an employment which is contracted-out employment at the time of the payment; and
b
the earner’s service in the employment is service which qualifies him for a pension provided by a money purchase contracted-out scheme,
and in subsections (2) and (2A) “the relevant part”, in relation to those earnings, means so much of those earnings as exceeds the current lower earnings limit but not F13the upper accrual point (or the prescribed equivalents if the earner is paid otherwise than weekly).
F42
The amount of any primary Class 1 contribution F5attributable to section 8(1)(a) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 in respect of the earnings shall be reduced by an amount equal to the appropriate flat-rate percentage of the relevant part of the earnings (“Amount R1”).
2A
The amount of any secondary Class 1 contribution in respect of the earnings shall be reduced by an amount equal to the appropriate flat-rate percentage of the relevant part of the earnings (“Amount R2”).
2B
The aggregate of Amounts R1 and R2 shall be set off—
a
first against the aggregate amount which the secondary contributor is liable to pay in respect of the contributions mentioned in subsections (2) and (2A); and
b
then (as to any balance) against any amount which the secondary contributor is liable to pay in respect of a primary or secondary Class 1 contribution in respect of earnings—
i
paid to or for the benefit of any other employed earner (whether in contracted-out employment or not), and
ii
in relation to which the secondary contributor is such a contributor;
and in this subsection any reference to a liability to pay an amount in respect of a primary Class 1 contribution is a reference to such a liability under paragraph 3 of Schedule 1 to the M1Social Security Contributions and Benefits (Northern Ireland) Act 1992.
2C
If—
a
any balance remains, and
b
the secondary contributor makes an application for the purpose to the Inland Revenue, the Inland Revenue shall, in such manner and at such time (or within such period) as may be prescribed by regulations made by the Secretary of State, pay to the secondary contributor an amount equal to the remaining balance.
But such regulations may make provision for the adjustment of an amount that would otherwise be payable under this subsection so as to avoid the payment of trivial or fractional amounts.
2D
If the Inland Revenue pay any amount under subsection (2C) which they are not required to pay, they may recover that amount from the secondary contributor in such manner and at such time (or within such period) as may be prescribed by such regulations.
3
F15Subject to subsection (5A), The F6Inland Revenue shall, except in prescribed circumstances or in respect of prescribed periods, pay in respect of that earner and that tax week to the F17earner or, in prescribed circumstances, to a prescribed person, the amount by which—
a
the appropriate age-related percentage of that part of those earnings,
exceeds
b
the appropriate flat-rate percentage of that part of those earnings.
4
Regulations F7made by the Secretary of State may make provisions—
a
as to the manner in which and time at which or period within which payments under subsection (3) are to be made,
b
for the adjustment of the amount which would otherwise be payable under that subsection so as to avoid the payment of trivial or fractional amounts,
c
for earnings to be calculated or estimated in such manner and on such basis as may be prescribed for the purpose of determining whether any, and if so what, payments under subsection (3) are to be made.
5
If the F6Inland RevenueF8pay an amount under subsection (3) which F9theyF10are not required to pay or F10are not required to pay to the person to whom, or in respect of whom, the F6Inland RevenueF8pay it, the F6Inland Revenue may recover it from any person to whom, or in respect of whom, the F6Inland Revenue paid it.
F185A
Where a payment under subsection (3) is due in respect of an earner, HMRC105 are not required to make the payment if they determine that the cost to them of administering the payment would exceed the amount of the payment.
6
Where—
a
an earner has ceased to be employed in an employment, and
b
earnings are paid to him or for his benefit within the period of six weeks, or such other period as may be prescribed, from the day on which he so ceased,. that employment shall be treated for the purposes of this section as contracted-out employment at the time when the earnings are paid if it was contracted-out employment in relation to the earner when he was last employed in it
7
Subsection (3) of section 37 applies for the purposes of this section as it applies for the purposes of that.
F118
In subsections (3), (4) and (6) “prescribed” means prescribed by regulations made by the Secretary of State.
F149
For the purposes of this section “the appropriate age-related percentage” and “the appropriate flat-rate percentage”, in relation to a tax year beginning before the abolition date, are the percentages specified as such for that tax year in an order made under section 38B (as it had effect prior to that date).
F1638B Determination and alteration of rates of contributions, and rebates, applicable under section 38A.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pt. 3: power to modify conferred (1.6.1996 for certain purposes otherwise 6.4.1997) by S.I. 1995/3213 (N.I. 22), art. 146(1); S.R. 1996/91, art. 2(f); S.R. 1997/192, art. 2
Pt. 3: power to transfer functions conferred (1.4.1999) by 1999 c. 2, s. 23(1)(2)(6); S.I. 1999/527, art. 2(b), Sch. 2