(This note is not part of the Order)
This Order reduces the rate of secondary Class 1 contributions, specified in section 9(2) of the Social Security Contributions and Benefits Act 1992 (“the Act”), from 12.2 per cent. to 11.9 per cent. It increases from £3,825 to £3,955 the amount of earnings below which an earner may be excepted from liability for Class 2 contributions, specified in section 11(4) of the Act. It also amends the amount of a Class 3 contribution specified in section 13(1) of the Act from £6.55 to £6.75 (Articles 2 to 4).
The Order amends, from £4,385 to £4,535 and from £27,820 to £29,900 respectively, the lower and upper limits of profits or gains specified in sections 15(3) and 18(1) of the Act, between which Class 4 contributions are payable (Article 5).
Articles 2 to 5 of the Order also make provision for Northern Ireland corresponding to that in the preceding two paragraphs (the section numbers are the same in the Social Security Contributions and Benefits (Northern Ireland) Act 1992).
The Order provides for section 2(2) of the Social Security Act 1993 to have effect for the tax year 2001–02. It also provides that the amount of any money that may be provided by Parliament to be paid into the National Insurance Fund in that year shall not exceed in aggregate 2 per cent. of the estimated benefit expenditure for the financial year ending 31st March 2002 (Article 6). The Order also makes corresponding provision for Northern Ireland (Article 4(3) of the Social Security (Northern Ireland) Order 1993 being the provision brought into effect) (Article 7).
In accordance with sections 142(1) and 144(1) of the Social Security Administration Act 1992, a copy of the report by the Government Actuary (Cm. 4933) giving his opinion on the likely effect on the National Insurance Fund of the making of the Order in so far as it amends sections 9(2), 11(4), 13(1), 15(3) and 18(1) of the Act, was laid before Parliament with the draft of this Order.
This Order does not impose any new costs on business. Certain contribution rates and limits increase broadly in line with the rise in price inflation, while the Class 4 upper profits limit increases in accordance with the announcement in the March 1999 Budget.