(1) The Secretary of State may by regulations provide for this Part to have effect in relation to cases which involve adoption, but not the placement of a child for adoption under the law of any part of the United Kingdom, with such modifications as the regulations may prescribe.
(2) The Secretary of State may by regulations provide for this Part to have effect in relation to cases which involve a person who has applied, or intends to apply, with another person for a parental order under section 54 of the Human Fertilisation and Embryology Act 2008 and a child who is, or will be, the subject of the order, with such modifications as the regulations may prescribe.
(3) Where section 171ZW(1)(b) has effect in relation to such cases as are described in subsection (2), regulations under section 171ZW(1)(b) may impose requirements to make statutory declarations as to—
(a) eligibility to apply for a parental order;
(b) intention to apply for such an order.
(1) A person who satisfies the conditions in subsection (2) is entitled in accordance with the following provisions of this Part to payments to be known as “statutory parental bereavement pay”.
(2) The conditions are—
(a) that the person is a bereaved parent,
(b) that the person has been in employed earner's employment with an employer for a continuous period of at least 26 weeks ending with the relevant week,
(c) that at the end of the relevant week the person was entitled to be in that employment (but see subsection (7)),
(d) that the person's normal weekly earnings for the period of 8 weeks ending with the relevant week are not less than the lower earnings limit in force under section 5(1)(a) at the end of the relevant week, and
(e) that the person has been in employed earner's employment with the employer by reference to whom the condition in paragraph (b) is satisfied for a continuous period beginning with the end of the relevant week and ending with the day on which the child dies.
(3) For the purposes of subsection (2) an employee is a “bereaved parent” if the employee satisfies prescribed conditions as to relationship with a child who has died.
(4) The conditions prescribed under subsection (3) may be framed, in whole or in part, by reference to the employee's care of the child before the child's death.
(5) In subsection (2) “relevant week” means the week immediately before the one in which the child dies.
(6) Where a person satisfies the conditions in subsection (2) as a result of the death of more than one child, the person is entitled to statutory parental bereavement pay in respect of each child.
(7) In relation to a bereaved parent whose child dies before the day on which section 63(3) of the Welfare Reform Act 2012 comes fully into force, subsection (2) above is to be read as if paragraph (c) were omitted.
(1) A person is entitled to payments of statutory parental bereavement pay in respect of any period only if the person gives notice to whoever is liable to make the payments stating the week or weeks in respect of which they are to be made.
(2) Regulations may provide for the time by which notice under subsection (1) must be given.
(3) The notice must be in writing if the person who is liable to pay the statutory parental bereavement pay so requests.
(4) The Secretary of State may by regulations—
(a) provide that section 171ZZ6(2)(b), (d) or (e) has effect subject to prescribed modifications in such cases as may be prescribed;
(b) provide for circumstances in which section 171ZZ6(2)(c) does not have effect;
(c) provide that subsection (1) of this section does not have effect, or has effect subject to prescribed modifications, in such cases as may be prescribed;
(d) impose requirements about evidence of entitlement;
(e) specify in what circumstances employment is to be treated as continuous for the purposes of section 171ZZ6;
(f) provide that a person is to be treated for the purposes of section 171ZZ6 as being employed for a continuous period of at least 26 weeks where—
(i) the person has been employed by the same employer for at least 26 weeks under two or more separate contracts of service, and
(ii) those contracts were not continuous;
(g) provide for amounts earned by a person under separate contracts of service with the same employer to be aggregated for the purposes of section 171ZZ6;
(h) provide that—
(i) the amount of a person's earnings for any period, or
(ii) the amount of the person's earnings to be treated as comprised in any payment made to the person or for the person's benefit,
is to be calculated or estimated for the purposes of section 171ZZ6 in such manner and on such basis as may be prescribed and that for that purpose payments of a particular class or description made or falling to be made to or by a person shall, to such extent as may be prescribed, be disregarded or, as the case may be, be deducted from the amount of the person's earnings.
(1) The liability to make payments of statutory parental bereavement pay under section 171ZZ6 is a liability of any person of whom the person entitled to the payments has been an employee as mentioned in subsection (2)(b) and (e) of that section.
(2) The Secretary of State must by regulations make provision as to a former employer's liability to pay statutory parental bereavement pay to a former employee in any case where the employee's contract of service with the employer has been brought to an end by the employer solely, or mainly, for the purpose of avoiding liability for statutory parental bereavement pay.
(3) The Secretary of State may, with the concurrence of the Commissioners for Her Majesty's Revenue and Customs, by regulations specify circumstances in which, notwithstanding this section, liability to make payments of statutory parental bereavement pay is to be a liability of the Commissioners.
(1) Statutory parental bereavement pay is payable at such fixed or earnings-related weekly rate as may be prescribed by regulations, which may prescribe different kinds of rate for different cases.
(2) Statutory parental bereavement pay is payable in respect of—
(a) such week within the qualifying period, or
(b) such number of weeks, not exceeding the prescribed number of weeks, within the qualifying period,
as the person entitled may choose in accordance with regulations.
(3) Provision under subsection (2)(b) must secure that the prescribed number of weeks is not less than two.
(4) Regulations under subsection (2)(b) may permit a person entitled to receive statutory parental bereavement pay to choose to receive such pay in respect of non-consecutive periods each of which is a week or a number of weeks.
(5) For the purposes of subsection (2), the qualifying period is to be determined in accordance with regulations, which must secure that it is a period of at least 56 days beginning with the date of the child's death.
(6) A person is not liable to pay statutory parental bereavement pay to another in respect of any statutory pay week during any part of which the other works under a contract of service with the person.
(7) It is immaterial for the purposes of subsection (6) whether the work referred to in that subsection is work under a contract of service which existed immediately before the statutory pay week or a contract of service which did not so exist.
(8) Except in such cases as may be prescribed, statutory parental bereavement pay is not payable to a person in respect of a statutory pay week during any part of which the person works for any employer who is not liable to pay the person statutory parental bereavement pay.
(9) The Secretary of State may by regulations specify circumstances in which there is to be no liability to pay statutory parental bereavement pay in respect of a statutory pay week.
(10) Where for any purpose of this Part or of regulations it is necessary to calculate the daily rate of statutory parental bereavement pay, the amount payable by way of statutory parental bereavement pay for any day is to be taken as one seventh of the weekly rate.
(11) In this section—
“statutory pay week”, in relation to a person entitled to statutory parental bereavement pay, means a week chosen by the person as a week in respect of which statutory parental bereavement pay is to be payable;
“week” means any period of seven days.
(1) An agreement is void to the extent that it purports—
(a) to exclude, limit or otherwise modify any provision of this Part, or
(b) to require a person to contribute (whether directly or indirectly) towards any costs incurred by that person's employer or former employer under this Part.
(2) An agreement between an employer and an employee, authorising any deductions from statutory parental bereavement pay which the employer is liable to pay to the employee in respect of any period, is not void by virtue of subsection (1)(a) if the employer—
(a) is authorised by that or another agreement to make the same deductions from any contractual remuneration which the employer is liable to pay in respect of the same period, or
(b) would be so authorised if the employer were liable to pay contractual remuneration in respect of that period.
171ZZ11 Relationship with contractual remuneration
(1) Subject to subsections (2) and (3), any entitlement to statutory parental bereavement pay does not affect any right of a person in relation to remuneration under any contract of service (“contractual remuneration”).
(2) Subject to subsection (3)—
(a) any contractual remuneration paid to a person by an employer of that person in respect of any period is to go towards discharging any liability of that employer to pay statutory parental bereavement pay to that person in respect of that period; and
(b) any statutory parental bereavement pay paid by an employer to a person who is an employee of that employer in respect of any period is to go towards discharging any liability of that employer to pay contractual remuneration to that person in respect of that period.
(3) Regulations may make provision as to payments which are, and those which are not, to be treated as contractual remuneration for the purposes of subsections (1) and (2).
The provisions of this Part apply in relation to persons employed by or under the Crown as they apply in relation to persons employed otherwise than by or under the Crown.
(1) The Secretary of State may with the concurrence of the Treasury make regulations modifying any provision of this Part in such manner as the Secretary of State thinks proper in its application to any person who is, has been or is to be—
(a) employed on board any ship, vessel, hovercraft or aircraft;
(b) outside Great Britain at any prescribed time or in any prescribed circumstances; or
(c) in prescribed employment in connection with continental shelf operations, as defined in section 120(2).
(2) Regulations under subsection (1) may, in particular, provide—
(a) for any provision of this Part to apply to any such person, notwithstanding that it would not otherwise apply;
(b) for any such provision not to apply to any such person, notwithstanding that it would otherwise apply;
(c) for excepting any such person from the application of any such provision where the person neither is domiciled nor has a place of residence in any part of Great Britain;
(d) for the taking of evidence, for the purposes of the determination of any question arising under any such provision, in a country or territory outside Great Britain, by a British consular official or such other person as may be determined in accordance with the regulations.
(1) In this Part—
“child” means a person under the age of 18 (see also section 171ZZ15 for the application of this Part in relation to stillbirths);
“employer”, in relation to a person who is an employee, means a person who—
under section 6 is liable to pay secondary Class 1 contributions in relation to any of the earnings of the person who is an employee, or
would be liable to pay such contributions but for—
the condition in section 6(1)(b), or
the employee being under the age of 16;
“modifications” includes additions, omissions and amendments, and related expressions are to be read accordingly;
“prescribed” means prescribed by regulations.
(2) In this Part, “employee” means a person who is gainfully employed in Great Britain either under a contract of service or in an office (including elective office) with earnings (within the meaning of Parts 1 to 5).
(3) Regulations may provide—
(a) for cases where a person who falls within the definition in subsection (2) is not to be treated as an employee for the purposes of this Part, and
(b) for cases where a person who would not otherwise be an employee for the purposes of this Part is to be treated as an employee for those purposes.
(4) Without prejudice to any other power to make regulations under this Part, regulations may specify cases in which, for the purposes of this Part or of such provisions of this Part as may be prescribed—
(a) two or more employers are to be treated as one;
(b) two or more contracts of service in respect of which the same person is an employee are to be treated as one.
(5) In this Part, except section 171ZZ9, “week” means a period of 7 days beginning with Sunday or such other period as may be prescribed in relation to any particular case or class of cases.
(6) For the purposes of this Part, a person's normal weekly earnings are, subject to subsection (8), to be taken to be the average weekly earnings which in the relevant period have been paid to the person or paid for the person's benefit under the contract of service with the employer in question.
(7) For the purposes of subsection (6), “earnings” and “relevant period” have the meanings given to them by regulations.
(8) In such cases as may be prescribed, a person's normal weekly earnings are to be calculated in accordance with regulations.
(9) Where in consequence of the establishment of one or more National Health Service trusts under the National Health Service (Wales) Act 2006, a person's contract of employment is treated by a scheme under that Act as divided so as to constitute two or more contracts, regulations may make provision enabling the person to elect for all of those contracts to be treated as one contract for the purposes of this Part or such provisions of this Part as may be prescribed.
(10) Regulations under subsection (9) may prescribe—
(a) the conditions that must be satisfied if a person is to be entitled to make such an election;
(b) the manner in which, and the time within which, such an election is to be made;
(c) the persons to whom, and the manner in which, notice of such an election is to be given;
(d) the information which a person who makes such an election is to provide, and the persons to whom, and the time within which, the person is to provide it;
(e) the time for which such an election is to have effect;
(f) which one of the person's employers under two or more contracts is to be regarded for the purposes of statutory parental bereavement pay as the person's employer under the contract.
(11) The powers under subsections (9) and (10) are without prejudice to any other power to make regulations under this Part.
(12) Regulations under any of subsections (4) to (10) must be made with the concurrence of the Commissioners for Her Majesty's Revenue and Customs.
In this Part—
(a) references to a child include a child stillborn after twenty-four weeks of pregnancy, and
(b) references to the death of a child are to be read, in relation to a stillborn child, as references to the birth of the child.
(1) A person who satisfies the conditions in subsection (2) and any condition prescribed under subsection (3) is entitled in accordance with the following provisions of this Part to payments to be known as “statutory neonatal care pay”.
(2) The conditions are—
(a) that—
(i) the person satisfies prescribed conditions as to a parental or other personal relationship with a child who is receiving, or has received, neonatal care, and
(ii) that care continues without interruption for a period of at least seven days beginning with the day after the day on which the care starts,
(b) that the person has been in employed earner’s employment with an employer for a continuous period of at least 26 weeks ending with the relevant week,
(c) that at the end of the relevant week the person was entitled to be in that employment (but see subsection (7)), and
(d) that the person’s normal weekly earnings for the period of 8 weeks ending with the relevant week are not less than the lower earnings limit in force under section 5(1)(a) at the end of the relevant week.
(3) Regulations may provide that a person is not entitled to pay in respect of a particular week or period of consecutive weeks unless, at the beginning of that week or period—
(a) the person is in employed earner’s employment with the employer by reference to whom the condition in subsection (2)(b) is satisfied, and
(b) that employment has been continuous from the end of the relevant week.
(4) For the purposes of this Part, “neonatal care” means care—
(a) of a prescribed medical or palliative kind, and
(b) that starts before the end of a period of 28 days beginning with the day after the date of the child’s birth.
(5) Regulations under subsection (4)(a) may prescribe a kind of care by reference to the kind of place at which care is provided.
(6) In this section the “relevant week”—
(a) in any case where the person is entitled to statutory maternity pay under section 164 in respect of the child, is the week immediately preceding the 14th week before the expected week of confinement (within the meaning of Part 12);
(b) in any case where the person is entitled to statutory paternity pay under section 171ZA (birth) in respect of the child, is the same week as the relevant week for the purposes of section 171ZA(2) in that case;
(c) in any case where the person is entitled to statutory paternity pay under section 171ZB (adoption) in respect of the child, is the same week as the relevant week for the purposes of section 171ZB(2) in that case;
(d) in any case where the person is entitled to statutory adoption pay under section 171ZL in respect of the child, is the same week as the relevant week for the purposes of section 171ZL(2) in that case;
(e) in any other case, is the week immediately before the one in which the neonatal care starts.
(7) In relation to neonatal care that starts before the day on which section 63(3) of the Welfare Reform Act 2012 comes fully into force, subsection (2) above is to be read as if paragraph (c) were omitted.
(1) A person is entitled to payments of statutory neonatal care pay in respect of any period only if the person gives notice to whoever is liable to make the payments stating the week or weeks in respect of which they are to be made.
(2) Regulations may provide for the time by which notice under subsection (1) must be given.
(3) The notice must be in writing if the person who is liable to pay the statutory neonatal care pay so requests.
(4) The Secretary of State may by regulations—
(a) make special provision regarding the applicability and extent of the entitlement where a person satisfies the conditions in subsection (2) and (if applicable) subsection (3) of section 171ZZ16 in respect of—
(i) more than one child in prescribed circumstances;
(ii) a child receiving neonatal care on two or more separate occasions;
(b) specify in what circumstances neonatal care is to be treated as continuous despite an interruption for the purposes of section 171ZZ16;
(c) provide that subsection (2)(b), (2)(d) or (3) of section 171ZZ16 has effect subject to prescribed modifications in such cases as may be prescribed;
(d) provide for circumstances in which section 171ZZ16(2)(c) does not have effect;
(e) provide that subsection (1) of this section does not have effect, or has effect subject to prescribed modifications, in such cases as may be prescribed;
(f) impose requirements about evidence of entitlement;
(g) specify in what circumstances employment is to be treated as continuous for the purposes of section 171ZZ16;
(h) provide that a person is to be treated for the purposes of section 171ZZ16 as being employed for a continuous period of at least 26 weeks where—
(i) the person has been employed by the same employer for at least 26 weeks under two or more separate con-tracts of service, and
(ii) those contracts were not continuous;
(i) provide for amounts earned by a person under separate contracts of service with the same employer to be aggregated for the purposes of section 171ZZ16;
(j) provide that—
(i) the amount of a person’s earnings for any period, or
(ii) the amount of the person’s earnings to be treated as comprised in any payment made to the person or for the person’s benefit,
is to be calculated or estimated for the purposes of section 171ZZ16 in such manner and on such basis as may be prescribed and that for that purpose payments of a particular class or description made or falling to be made to or by a person shall, to such extent as may be prescribed, be disregarded or, as the case may be, be deducted from the amount of the person’s earnings.
(1) The liability to make payments of statutory neonatal care pay under section 171ZZ16 is a liability of any person of whom the person entitled to the payments has been an employee as mentioned in subsections (2)(b) and (3) of that section.
(2) The Secretary of State must by regulations make provision as to a former employer’s liability to pay statutory neonatal care pay to a former employee in any case where the employee’s contract of service with the employer has been brought to an end by the employer solely, or mainly, for the purpose of avoiding liability for statutory neonatal care pay.
(3) The Secretary of State may, with the concurrence of the Commissioners for His Majesty’s Revenue and Customs, by regulations specify circumstances in which, notwithstanding this section, liability to make payments of statutory neonatal care pay is to be a liability of the Commissioners.
(1) Statutory neonatal care pay is payable at such fixed or earnings-related weekly rate as may be prescribed by regulations, which may prescribe different kinds of rate for different cases.
(2) Statutory neonatal care pay is payable in respect of—
(a) such week within the qualifying period, or
(b) such number of weeks, not exceeding the prescribed number of weeks, within the qualifying period,
as the person entitled may choose in accordance with regulations.
(3) Provision under subsection (2)(b) must secure that the prescribed number of weeks is not less than 12.
(4) Regulations under subsection (2)(b) may permit a person entitled to receive statutory neonatal care pay to choose to receive such pay in respect of non-consecutive periods each of which is a week or a number of weeks.
(5) For the purposes of subsection (2), the qualifying period is to be determined in accordance with regulations, which must secure that it is a period of at least 68 weeks beginning with the date of the child’s birth.
(6) A person is not liable to pay statutory neonatal care pay to another in respect of any statutory pay week during any part of which the other works under a contract of service with the person.
(7) It is immaterial for the purposes of subsection (6) whether the work referred to in that subsection is work under a contract of service which existed immediately before the statutory pay week or a contract of service which did not so exist.
(8) Except in such cases as may be prescribed, statutory neonatal care pay is not payable to a person in respect of a statutory pay week during any part of which the person works for any employer who is not liable to pay the person statutory neonatal care pay.
(9) The Secretary of State may by regulations specify circumstances in which there is to be no liability to pay statutory neonatal care pay in respect of a statutory pay week.
(10) Where for any purpose of this Part or of regulations it is necessary to calculate the daily rate of statutory neonatal care pay, the amount payable by way of statutory neonatal care pay for any day is to be taken as one seventh of the weekly rate.
(11) In this section—
“statutory pay week”, in relation to a person entitled to statutory neonatal care pay, means a week chosen by the person as a week in respect of which statutory neonatal care pay is to be payable;
“week” means any period of seven days.
(1) An agreement is void to the extent that it purports—
(a) to exclude, limit or otherwise modify any provision of this Part, or
(b) to require a person to contribute (whether directly or indirectly) towards any costs incurred by that person’s employer or former employer under this Part.
(2) An agreement between an employer and an employee, authorising any deductions from statutory neonatal care pay which the employer is liable to pay to the employee in respect of any period, is not void by virtue of subsection (1)(a) if the employer—
(a) is authorised by that or another agreement to make the same deductions from any contractual remuneration which the employer is liable to pay in respect of the same period, or
(b) would be so authorised if the employer were liable to pay contractual remuneration in respect of that period.
171ZZ21 Relationship with contractual remuneration
(1) Subject to subsections (2) and (3), any entitlement to statutory neonatal care pay does not affect any right of a person in relation to remuneration under any contract of service (“contractual remuneration”).
(2) Subject to subsection (3)—
(a) any contractual remuneration paid to a person by an employer of that person in respect of any period is to go towards discharging any liability of that employer to pay statutory neonatal care pay to that person in respect of that period; and
(b) any statutory neonatal care pay paid by an employer to a person who is an employee of that employer in respect of any period is to go towards discharging any liability of that employer to pay contractual remuneration to that person in respect of that period.
(3) Regulations may make provision as to payments which are, and those which are not, to be treated as contractual remuneration for the purposes of subsections (1) and (2).
The provisions of this Part apply in relation to persons employed by or under the Crown as they apply in relation to persons employed otherwise than by or under the Crown.
(1) The Secretary of State may with the concurrence of the Treasury make regulations modifying any provision of this Part in such manner as the Secretary of State thinks proper in its application to any person who is, has been or is to be—
(a) employed on board any ship, vessel, hovercraft or aircraft;
(b) outside Great Britain at any prescribed time or in any prescribed circumstances; or
(c) in prescribed employment in connection with continental shelf operations, as defined in section 120(2).
(2) Regulations under subsection (1) may, in particular, provide—
(a) for any provision of this Part to apply to any such person, notwithstanding that it would not otherwise apply;
(b) for any such provision not to apply to any such person, notwithstanding that it would otherwise apply;
(c) for excepting any such person from the application of any such provision where the person neither is domiciled nor has a place of residence in any part of Great Britain;
(d) for the taking of evidence, for the purposes of the determination of any question arising under any such provision, in a country or territory outside Great Britain, by a British consular official or such other person as may be determined in accordance with the regulations.
(1) In this Part—
“employer”, in relation to a person who is an employee, means a person who—
under section 6 is liable to pay secondary Class 1 contributions in relation to any of the earnings of the person who is an employee, or
would be liable to pay such contributions but for—
the condition in section 6(1)(b), or
the employee being under the age of 16;
“modifications” includes additions, omissions and amendments, and related expressions are to be read accordingly;
“prescribed” means prescribed by regulations.
(2) In this Part, “employee” means a person who is gainfully employed in Great Britain either under a contract of service or in an office (including elective office) with earnings (within the meaning of Parts 1 to 5).
(3) Regulations may provide—
(a) for cases where a person who falls within the definition in subsection (2) is not to be treated as an employee for the purposes of this Part, and
(b) for cases where a person who would not otherwise be an employee for the purposes of this Part is to be treated as an employee for those purposes.
(4) Without prejudice to any other power to make regulations under this Part, regulations may specify cases in which, for the purposes of this Part or of such provisions of this Part as may be prescribed—
(a) two or more employers are to be treated as one;
(b) two or more contracts of service in respect of which the same person is an employee are to be treated as one.
(5) In this Part, except section 171ZZ19, “week” means a period of 7 days beginning with Sunday or such other period as may be prescribed in relation to any particular case or class of cases.
(6) For the purposes of this Part, a person’s normal weekly earnings are, subject to subsection (8), to be taken to be the average weekly earnings which in the relevant period have been paid to the person or paid for the person’s benefit under the contract of service with the employer in question.
(7) For the purposes of subsection (6), “earnings” and “relevant period” have the meanings given to them by regulations.
(8) In such cases as may be prescribed, a person’s normal weekly earnings are to be calculated in accordance with regulations.
(9) Where in consequence of the establishment of one or more National Health Service trusts under the National Health Service (Wales) Act 2006, a person’s contract of employment is treated by a scheme under that Act as divided so as to constitute two or more contracts, regulations may make provision enabling the person to elect for all of those contracts to be treated as one contract for the purposes of this Part or such provisions of this Part as may be prescribed.
(10) Regulations under subsection (9) may prescribe—
(a) the conditions that must be satisfied if a person is to be entitled to make such an election;
(b) the manner in which, and the time within which, such an election is to be made;
(c) the persons to whom, and the manner in which, notice of such an election is to be given;
(d) the information which a person who makes such an election is to provide, and the persons to whom, and the time within which, the person is to provide it;
(e) the time for which such an election is to have effect;
(f) which one of the person’s employers under two or more contracts is to be regarded for the purposes of statutory neonatal care pay as the person’s employer under the contract.
(11) The powers under subsections (9) and (10) are without prejudice to any other power to make regulations under this Part.
(12) Regulations under any of subsections (4) to (10) must be made with the concurrence of the Commissioners for His Majesty’s Revenue and Customs.
(1) For the purposes of this Act, save as otherwise expressly provided, whether a person is capable or incapable of work shall be determined in accordance with the provisions of this Part of this Act.
(2) Regulations may make provision as to—
(a) the information or evidence required for the purpose of determining whether a person is capable or incapable of work, and
(b) the manner in which that information or evidence is to be provided,
and may provide that if a person without good cause fails to provide that information or evidence, or to do so in the manner required, he shall be treated as capable of work.
(2A) In subsection (2)(a) above the reference to such information or evidence as is there mentioned includes information or evidence capable of being used for assisting or encouraging the person in question to obtain work or enhance his prospects of obtaining it.
(3) Regulations may provide that in any case where it falls to be determined whether a person is capable of work—
(a) he may be called to attend for such medical examination as may be required in accordance with regulations, and
(b) if he fails without good cause to attend for or submit himself to such examination, he shall be treated as capable of work.
(4) Regulations may prescribe for the purposes of this section—
(a) matters which are or are not to be taken into account in determining whether a person does or does not have good cause for any act or omission, or
(b) circumstances in which a person is or is not to be regarded as having or not having good cause for any act or omission.
(5) All information supplied in pursuance of this section shall be taken for all purposes to be information relating to social security.
(1) Where a person has been engaged in remunerative work for more than 8 weeks in the 21 weeks immediately preceding the day with respect to which it falls to be determined whether he is or was incapable of work, the own occupation test is applicable in his case.
(2) The own occupation test is whether he is incapable by reason of some specific disease or bodily or mental disablement of doing work which he could reasonably be expected to do in the course of the occupation in which he was so engaged.
(3) Where for any purpose of this Act it is determined in relation to a person—
(a) that the test applicable with respect to any day is the own occupation test, and
(b) that he is on that test incapable of work,
that test remains applicable in his case until the end of the spell of incapacity beginning with that day or, as the case may be, in which that day falls, or until the 197th day of incapacity for work in that spell, whichever is the earlier.
For this purpose a “spell of incapacity” means a series of 4 or more consecutive days of incapacity for work; and any two such spells not separated by a period of more than 8 weeks shall be treated as one spell of incapacity.
(4) For the purposes of subsection (3) above a day of incapacity for work means a day—
(a) with respect to which it has been determined for any purpose of this Act that the person in question was incapable of work, or
(b) in respect of which he was entitled to statutory sick pay, or
(c) in the case of a woman, which falls within the maternity allowance period, or
(d) which in accordance with regulations is to be treated for those purposes as a day of incapacity for work.
(5) Any provision of this Act apart from subsection (4) above under or by virtue of which a day is or is not to be treated for any purpose as a day of incapacity for work shall be disregarded for the purposes of this section.
(6) Provision may be made by regulations defining for the purposes of this section what is meant by “remunerative work".
The regulations may, in particular, provide—
(a) for “remunerative work" to be defined by reference to the number of hours worked per week; and
(b) for training of any prescribed description to be treated as if it were remunerative work.
(7) Provision may be made by regulations as to the application of this section in cases where a person engages in more than one occupation or in different kinds of work.
(8) The Secretary of State may by regulations provide that subsection (3) above shall have effect as if—
(a) the reference there to 4 consecutive days were to such lesser number of days, whether consecutive or not, within such period of consecutive days as may be prescribed; and
(b) for the reference to 8 weeks there were substituted a reference to such larger number of weeks as may be prescribed.
(1) Where the own occupation test is not applicable, or has ceased to apply, in the case of a person, the question whether the person is capable or incapable of work shall be determined in accordance with a personal capability assessment.
(2) Provision shall be made by regulations—
(a) defining a personal capability assessment by reference to the extent to which a person who has some specific disease or bodily or mental disablement is capable or incapable of performing such activities as may be prescribed;
(b) as to the manner of assessing whether a person is, in accordance with a personal capability assessment, incapable of work.
(3) Regulations may provide that, in any prescribed circumstances, a person to whom subsection (1) above applies shall, if the prescribed conditions are met, be treated as incapable of work in accordance with a personal capability assessment until such time as—
(a) such an assessment has been carried out in his case, or
(b) he falls to be treated as capable of work in accordance with regulations under section 171A(2) or (3) above or section 171E below.
The prescribed conditions may include the condition that it has not previously been determined, within such period as may be prescribed, that the person in question is or is to be treated as capable of work.
(4) Except in prescribed circumstances, a personal capability assessment carried out in the case of a person before the time when subsection (1) above applies to him shall be as effective for the purposes of that subsection as one carried out thereafter.
(5) The Secretary of State may, in the case of a person who for any purpose of this Act has been determined to be incapable of work in accordance with a personal capability assessment (including one carried out by virtue of this subsection), require the question whether the person is capable or incapable of work to be determined afresh in accordance with a further personal capability assessment.
171D Incapacity for work: persons to be treated as incapable or capable of work.
(1) Regulations may provide that a person shall be treated as capable of work, or as incapable of work, in such cases or circumstances as may be prescribed.
(2) Regulations may, in particular, provide that a person shall be treated as capable of work if he does work of a prescribed description, or more than the prescribed amount of work of a prescribed description.
Accordingly regulations may provide that a person shall not be treated as capable of work by reason only of his doing such work as may be prescribed, or no more than the prescribed amount of work of a prescribed description.
(1) Regulations may provide for disqualifying a person for receiving any benefit, allowance or other advantage under any provision for the purposes of which this Part of this Act applies, or, in such cases as may be prescribed, provide that a person shall be treated as capable of work, if—
(a) he has become incapable of work through his own misconduct;
(b) he fails without good cause to attend for or submit himself to such medical or other treatment as may be required in accordance with the regulations; or
(c) he fails without good cause to observe any prescribed rules of behaviour.
(2) Regulations shall provide that any such disqualification shall be, or as the case may be that the person shall be treated as capable of work, for such period not exceeding 6 weeks as may be determined in accordance with Chapter II of Part I of the Social Security Act 1998.
(3) Regulations may prescribe for the purposes of this section—
(a) matters which are or are not to be taken into account in determining whether a person does or does not have good cause for any act or omission, or
(b) circumstances in which a person is or is not to be regarded as having or not having good cause for any act or omission.
171F Incapacity for work: work as councillor to be disregarded.
(1) In determining whether a person is capable or incapable of work, there shall be disregarded any work which that person has undertaken as a councillor.
(2) For this purpose “councillor” means—
(a) in relation to England and Wales, a member of a London borough council, a county or county borough council, a district council, a parish or community council, the Common Council of the City of London or the Council of the Isles of Scilly; and
(b) in relation to Scotland, a member of a regional, islands or district council.
(3) The reference in subsection (1) above to the work which a person undertakes as a councillor shall be taken to include any work which he undertakes as a member of any of the bodies referred to in section 177(1) of the Local Government Act 1972, or section 49(1) or (1A) of the Local Government (Scotland) Act 1973, of which he is a member by virtue of his being a councillor.
(4) In making any such determination as is mentioned in subsection (1) above a person shall be treated as having been incapable of work on any day which falls in the pre-commencement period and which—
(a) would have been treated as a day on which he was so incapable, were there disregarded any work which he undertook (or was capable of undertaking) as a councillor; but
(b) would not have been so treated apart from this subsection.
The “pre-commencement period” means the period beginning with 11th May 1987 and ending immediately before 9th October 1989 (the coming into force of paragraph 2 of Schedule 8 to the Social Security Act 1989 which made provision corresponding to the provision made by this section).
171G Incapacity for work: supplementary provisions.
(1) The provisions of this Part of this Act do not apply—
(a) for the purposes of Part V of this Act (benefit for industrial injuries: see section 94(6) above);
(b) for the purposes of Part XI of this Act (statutory sick pay: see section 151(4) above); or
(c) for such other purposes as may be prescribed.
(2) In this Part of this Act—
“prescribed” means specified in or determined in accordance with regulations; and
“week” means any period of 7 days.
172 Application of Act in relation to territorial waters.
In this Act—
(a) any reference to Great Britain includes a reference to the territorial waters of the United Kingdom adjacent to Great Britain;
(b) any reference to the United Kingdom includes a reference to the territorial waters of the United Kingdom.
For the purposes of this Act a person—
(a) is over or under a particular age if he has or, as the case may be, has not attained that age; and
(b) is between two particular ages if he has attained the first but not the second;
and in Scotland (as in England and Wales) the time at which a person attains a particular age expressed in years is the commencement of the relevant anniversary of the date of his birth.
In this Act—
“the 1975 Act” means the Social Security Act 1975;
“the 1986 Act” means the Social Security Act 1986;
“the Administration Act” means the Social Security Administration Act 1992;
“the Consequential Provisions Act” means the Social Security (Consequential Provisions) Act 1992;
“the Northern Ireland Contributions and Benefits Act” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992;
“the Old Cases Act” means the Industrial Injuries and Diseases (Old Cases) Act 1975; and
“the Pensions Act” means the Pension Schemes Act 1993.
(1) Subject to subsection (1A) below, regulations and orders under this Act shall be made by the Secretary of State.
(1A) Subsection (1) above has effect subject to—
(a) any provision ... providing for regulations or an order to be made by the Treasury or by the Commissioners of Inland Revenue, ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) Powers under this Act to make regulations, orders or schemes shall be exercisable by statutory instrument.
(3) Except in the case of an order under section 145(3) above and in so far as this Act otherwise provides, any power under this Act to make regulations or an order may be exercised—
(a) either in relation to all cases to which the power extends, or in relation to those cases subject to specified exceptions, or in relation to any specified cases or classes of case;
(b) so as to make, as respects the cases in relation to which it is exercised—
(i) the full provision to which the power extends or any less provision (whether by way of exception or otherwise),
(ii) the same provision for all cases in relation to which the power is exercised, or different provision for different cases or different classes of case or different provision as respects the same case or class of case for different purposes of this Act,
(iii) any such provision either unconditionally or subject to any specified condition;
and where such a power is expressed to be exercisable for alternative purposes it may be exercised in relation to the same case for any or all of those purposes; and powers to make regulations or an order for the purposes of any one provision of this Act are without prejudice to powers to make regulations or an order for the purposes of any other provision.
(4) Without prejudice to any specific provision in this Act, any power conferred by this Act to make regulations or an order (other than the power conferred in section 145(3) above) includes power to make thereby such incidental, supplementary, consequential or transitional provision as appears to the person making the regulations or order to be expedient for the purposes of the regulations or order.
(5) Without prejudice to any specific provisions in this Act, a power conferred by any provision of this Act except—
(a) sections 30, 47(6), 25B(2)(a) and 145(3) above and paragraph 3(9) of Schedule 7 to this Act;
(b) section 122(1) above in relation to the definition of “payments by way of occupational or personal pension”; and
(c) Part XI,
to make regulations or an order includes power to provide for a person to exercise a discretion in dealing with any matter.
(6) Any power conferred by this Act to make orders or regulations relating to housing benefit or council tax benefit shall include power to make different provisions for different areas.
(7) Any power of the Secretary of State under any provision of this Act, except the provisions mentioned in subsection (5)(a) and (b) above and Part IX, to make any regulations or order, where the power is not expressed to be exercisable with the consent of the Treasury, shall if the Treasury so direct be exercisable only in conjunction with them.
(8) Any power under any of sections 116 to 120 above to modify provisions of this Act or the Administration Act extends also to modifying so much of any other provision of this Act or that Act as re-enacts provisions of the 1975 Act which replaced provisions of the National Insurance (Industrial Injuries) Acts 1965 to 1974.
(9) A power to make regulations under any of sections 116 to 120 above shall be exercisable in relation to any enactment passed after this Act which is directed to be construed as one with this Act; but this subsection applies only so far as a contrary intention is not expressed in the enactment so passed, and is without prejudice to the generality of any such direction.
(10) Any reference in this section or section 176 below to an order or regulations under this Act includes a reference to an order or regulations made under any provision of an enactment passed after this Act and directed to be construed as one with this Act; but this subsection applies only so far as a contrary intention is not expressed in the enactment so passed, and without prejudice to the generality of any such direction.
(1) Subject to the provisions of this section, a statutory instrument containing (whether alone or with other provisions)—
(zza) regulations under section 4(6A) making provision for a reduction in the amount of the contributions limit for a tax year;
(za) regulations under section 5 specifying the lower earnings limit for the tax year following the designated tax year (see section 5(4) of the Pensions Act 2007) or any subsequent tax year;
(zb) regulations under section 5 specifying the upper earnings limit;
(a) regulations made by virtue of—
section 4B(2);
section 4C;
section 9A(7);
section 9B(4), (8) or (10);
section 10ZC;
section 11(8) or (9)
section 14A;
section 18;
section 18A;
section 19(4) to (6);
section 28(3);
section 30DD(5)(b) or (c);
...
section 45(2A);
...
section 104(3);
section 117;
section 118;
...
section 145;
...
section 171ZE(1);
...
...
any of sections 171ZU to 171ZY;
any of sections 171ZZ6 to 171ZZ9;
any of sections 171ZZ16 to 171ZZ19;
(aa) the first regulations made by virtue of section 23A(3)(c);
(ab) the first regulations made by virtue of section 130A(5) or (6);
(b) regulations prescribing payments for the purposes of the definition of “payments by way of occupational or personal pension” in section 122(1) above;
(bb) regulations prescribing a percentage rate for the purposes of—
(i) paragraph 3B(3) or 7B(3) of Schedule 5, or
(ii) paragraph 5(3) of Schedule 5A;
(c) an order under—
section 25B(1)
section 28(2);
section 35A(7);
...
...
...
section 148(3)(b);
section 157(2);
...
section 159A(1),
shall not be made unless a draft of the instrument has been laid before Parliament and been approved by a resolution of each House.
(2) Subsection (1) above does not apply to a statutory instrument by reason only that it contains—
(a) regulations under section 117 which the instrument states are made for the purpose of making provision consequential on the making of an order under section 141, 143, 145, 146 or 162 of the Administration Act;
(b) regulations under powers conferred by any provision mentioned in paragraph (a) of that subsection ... which are to be made for the purpose of consolidating regulations to be revoked in the instrument;
(c) regulations which, in so far as they are made under powers conferred by any provision mentioned in paragraph (a) of that subsection (other than section 145 ...), only replace provisions of previous regulations with new provisions to the same effect.
(2A) In the case of a statutory instrument containing (whether alone or with other provisions) regulations made by virtue of section 4B(2) to which subsection (1) above applies, the draft of the instrument must be laid before Parliament before the end of the period of 12 months beginning with the appropriate date.
(2B) For the purposes of subsection (2A), the “appropriate date” means—
(a) where the corresponding retrospective tax provision was passed or made before the day on which the National Insurance Contributions Act 2006 was passed, the date upon which that Act was passed, and
(b) in any other case, the date upon which the corresponding retrospective tax provision was passed or made.
(2C) For the purposes of subsection (2B), “the corresponding retrospective tax provision” in relation to the regulations means—
(a) the retrospective tax provision mentioned in subsection (1) of section 4B in relation to which the regulations are to be made by virtue of subsection (2) of that section, or
(b) where there is more than one such tax provision, whichever of those provisions was the first to be passed or made.
(3) A statutory instrument—
(a) which contains (whether alone or with other provisions) any order, regulations or scheme made under this Act by the Secretary of State, the Treasury or the Commissioners of Inland Revenue, other than an order under section 145(3) above; and
(b) which is not subject to any requirement that a draft of the instrument shall be laid before and approved by a resolution of each House of Parliament,
shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(4) Subsection (3) above does not apply to a statutory instrument by reason only that it contains an order appointing the first or second appointed year or designating the flat rate introduction year (within the meanings given by section 122(1) above).
(1) This Act may be cited as the Social Security Contributions and Benefits Act 1992.
(2) This Act is to be read, where appropriate, with the Administration Act and the Consequential Provisions Act.
(3) The enactments consolidated by this Act are repealed, in consequence of the consolidation, by the Consequential Provisions Act.
(4) Except as provided in Schedule 4 to the Consequential Provisions Act, this Act shall come into force on 1st July 1992.
(5) The following provisions extend to Northern Ireland—
section 16 and Schedule 2;
section 116(2); and
this section.
(6) Except as provided by this section, this Act does not extend to Northern Ireland.
SCHEDULE 1 Supplementary provisions relating to contributions of Classes 1, 1A, 1B, 2 , 3 and 3A
Section 1(4).
Class 1 contributions where earner employed in more than one employment
1 (1) For the purposes of determining whether Class 1 contributions are payable in respect of earnings paid to an earner in a given week and, if so, the amount of the contributions—
(a) all earnings paid to him or for his benefit in that week in respect of one or more employed earner’s employments under the same employer shall, except as may be provided by regulations, be aggregated and treated as a single payment of earnings in respect of one such employment; and
(b) earnings paid to him or for his benefit in that week by different persons in respect of different employed earner’s employments shall in prescribed circumstances be aggregated and treated as a single payment of earnings in respect of one such employment;
and regulations may provide that the provisions of this sub-paragraph shall have effect in cases prescribed by the regulations as if for any reference to a week there were substituted a reference to a period prescribed by the regulations.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) Where any single payment of earnings is made in respect of two or more employed earner’s employments under different employers, liability for Class 1 contributions shall be determined by apportioning the payment to such one or more of the employers as may be prescribed, and treating a part apportioned to any employer as a separate payment of earnings by him.
(8) Where earnings are aggregated under sub-paragraph (1)(b) above, liability (if any) for the secondary contribution shall be apportioned, in such manner as may be prescribed, between the secondary contributors concerned.
(8A) Regulations under any provision of this paragraph shall be made by the Inland Revenue.
(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings not paid at normal intervals
2 Regulations made by the Inland Revenue may, for the purposes of Class 1 contributions, make provision as to the intervals at which payments of earnings are to be treated as made.
Method of paying Class 1 contributions
3 (1) Where earnings are paid to an employed earner and in respect of that payment liability arises for primary and secondary Class 1 contributions, the secondary contributor shall (except in prescribed circumstances), as well as being liable for any secondary contribution of his own, be liable in the first instance to pay also the earner’s primary contribution or a prescribed part of the earner’s primary contribution, on behalf of and to the exclusion of the earner; and for the purposes of this Act and the Administration Act contributions paid by the secondary contributor on behalf of the earner shall be taken to be contributions paid by the earner.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) A secondary contributor shall be entitled, subject to and in accordance with regulations, to recover from an earner the amount of any primary Class 1 contribution paid or to be paid by him on behalf of the earner; and, subject to sub-paragraphs (3A) to (5) below but notwithstanding any other provision in any enactment, regulations under this sub-paragraph shall provide for recovery to be made by deduction from the earner’s earnings, and for it not to be made in any other way.
(3A) Sub-paragraph (3B) applies where a person (“the employee”) who is employed by a particular employer (“the employer”) receives earnings in a form other than money (“non-monetary earnings”) from the employer in a tax year.
(3B) If and to the extent that regulations so provide, the employer may recover from the employee, in the prescribed manner, any primary Class 1 contributions paid or to be paid by him on the employee’s behalf in respect of those earnings.
(4) Sub-paragraph (5) below applies in a case where—
(a) a person (“the employee”) ceases in a particular tax year (“the cessation year”) to be employed by a particular employer (“the employer”); and
(b) the employee receives from the employer in the cessation year, after the cessation of the employment, or in the next tax year non-monetary earnings.
(5) If and to the extent that regulations so provide, the employer may recover from the employee in such manner as may be prescribed any primary Class 1 contributions paid or to be paid by him on the employee’s behalf in respect of—
(a) the non-monetary earnings mentioned in sub-paragraph (4) above; ...
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) Regulations under any provision of this paragraph shall be made by the Inland Revenue.
Prohibition on recovery of employer’s contributions
3A (1) Subject to sub-paragraph (2) below, a person who is or has been liable to pay any secondary Class 1 or any Class 1A or Class 1B contributions shall not—
(a) make, from earnings paid by him, any deduction in respect of any such contributions for which he or any other person is or has been liable;
(b) otherwise recover any such contributions (directly or indirectly) from any person who is or has been a relevant earner; or
(c) enter into any agreement with any person for the making of any such deduction or otherwise for the purpose of so recovering any such contributions.
(2) Sub-paragraph (1) above does not apply to the extent that an agreement between—
(a) a secondary contributor, and
(b) any person (“the earner”) in relation to whom the secondary contributor is, was or will be such a contributor in respect of the contributions to which the agreement relates,
allows the secondary contributor to recover (whether by deduction or otherwise) the whole or any part of any secondary Class 1 contribution payable in respect of relevant employment income of that earner.
(2A) But an agreement in respect of relevant employment income is to be disregarded for the purposes of sub-paragraph (2) to the extent that it relates to—
(a) relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part 7 of ITEPA 2003 (employment income: securities with artificially depressed market value), or
(b) any contribution, or any part of any contribution, liability to which arises as a result of regulations being given retrospective effect by virtue of section 4B(2) (earnings: power to make retrospective provision in consequence of retrospective tax legislation).
(2B) For the purposes of sub-paragraphs (2) and (2A) “relevant employment income”, in relation to the earner, means—
(a) an amount that counts as employment income of the earner under section 426 of ITEPA 2003 (restricted securities: charge on certain post-acquisition events),
(b) an amount that counts as employment income of the earner under section 438 of that Act (convertible securities: charge on certain post-acquisition events), or
(c) a gain that is treated as remuneration derived from the earner’s employment by virtue of section 4(4)(a) above.
(3) Sub-paragraph (2) above does not authorise any recovery (whether by deduction or otherwise)—
(a) in pursuance of any agreement entered into before 19th May 2000; or
(b) in respect of any liability to a contribution arising before the day of the passing of the Child Support, Pensions and Social Security Act 2000.
(4) In this paragraph—
“agreement” includes any arrangement or understanding (whether or not legally enforceable); and
“relevant earner”, in relation to a person who is or has been liable to pay any contributions, means an earner in respect of whom he is or has been so liable.
Transfer of liability to be borne by earner
3B (1) This paragraph applies where—
(a) an election is jointly made by—
(i) a secondary contributor, and
(ii) a person (“the earner”) in relation to whom the secondary contributor is or will be such a contributor in respect of contributions on relevant employment income of the earner,
for the whole or a part of any liability of the secondary contributor to contributions on any such income to be transferred to the earner; and
(b) the election is one in respect of which the Inland Revenue have, before it was made, given by notice to the secondary contributor their approval to both—
(i) the form of the election; and
(ii) the arrangements made in relation to the proposed election for securing that the liability transferred by the election will be met.
(1A) In this paragraph “relevant employment income”, in relation to the earner, means—
(a) an amount that counts as employment income of the earner under section 426 of ITEPA 2003 (restricted securities: charge on certain post-acquisition events),
(b) an amount that counts as employment income of the earner under section 438 of that Act (convertible securities: charge on certain post-acquisition events), or
(c) a gain that is treated as remuneration derived from the earner’s employment by virtue of section 4(4)(a) above,
and references to contributions on relevant employment income are references to any secondary Class 1 contributions payable in respect of that income.
(2) Any liability which—
(a) arises while the election is in force, and
(b) is a liability to pay the contributions on relevant employment income of the earner, or the part of it, to which the election relates,
shall be treated for the purposes of this Act, the Administration Act and Part II of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 as a liability falling on the earner, instead of on the secondary contributor.
(3) Subject to sub-paragraphs (7)(b) and (7B) below, an election made for the purposes of sub-paragraph (1) above shall continue in force from the time when it is made until whichever of the following first occurs, namely—
(a) it ceases to have effect in accordance with its terms;
(b) it is revoked jointly by both parties to the election;
(c) notice is given to the earner by the secondary contributor terminating the effect of the election.
(4) An approval given to the secondary contributor for the purposes of sub-paragraph (1)(b) above may be given either—
(a) for an election to be made by the secondary contributor and a particular person; or
(b) for all elections to be made, or to be made in particular circumstances, by the secondary contributor and particular persons or by the secondary contributor and persons of a particular description.
(5) The grounds on which the Inland Revenue shall be entitled to refuse an approval for the purposes of sub-paragraph (1)(b) above shall include each of the following—
(a) that it appears to the Inland Revenue that adequate arrangements have not been made for securing that the liabilities transferred by the proposed election or elections will be met by the person or persons to whom they would be so transferred; and
(b) that it appears to the Inland Revenue that they do not have sufficient information to determine whether or not grounds falling within paragraph (a) above exist.
(6) If, at any time after they have given an approval for the purposes of sub-paragraph (1)(b) above, it appears to the Inland Revenue—
(a) that the arrangements that were made or are in force for securing that liabilities transferred by elections to which the approval relates are met are proving inadequate or unsatisfactory in any respect, or
(b) that any election to which the approval relates has resulted, or is likely to result, in the avoidance or non-payment of the whole or any part of any secondary Class 1 contributions,
the Inland Revenue may withdraw the approval by notice to the secondary contributor.
(7) The withdrawal by the Inland Revenue of any approval given for the purposes of sub-paragraph (1)(b) above—
(a) may be either general or confined to a particular election or to particular elections; and
(b) shall have the effect that the election to which the withdrawal relates has no effect on contributions on relevant employment income if—
(i) that income is within sub-paragraph (1A)(a) or (b) and the securities, or interest in securities, to which it relates were or was acquired after the withdrawal date, or
(ii) that income is within sub-paragraph (1A)(c) and the right to acquire securities to which it relates was acquired after that date.
(7A) In sub-paragraph (7)(b) “the withdrawal date” means—
(a) the date on which notice of the withdrawal of the approval is given, or
(b) such later date as the Inland Revenue may specify in that notice.
(7B) An election is void for the purposes of sub-paragraph (1) to the extent that it relates to —
(a) relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part 7 of ITEPA 2003 (employment income: securities with artificially depressed market value), or
(b) any liability, or any part of any liability, to a contribution arising as a result of regulations being given retrospective effect by virtue of section 4B(2) (earnings: power to make retrospective provision in consequence of retrospective tax legislation).
(8) Where the Inland Revenue have refused or withdrawn their approval for the purposes of sub-paragraph (1)(b) above, the person who applied for it or, as the case may be, to whom it was given may appeal ... against the Inland Revenue’s decision.
(9) On an appeal under sub-paragraph (8) above that is notified to the tribunal, the tribunal may—
(a) dismiss the appeal;
(b) remit the decision appealed against to the Inland Revenue with a direction to make such decision as the tribunal thinks fit; or
(c) in the case of a decision to withdraw an approval, quash that decision and direct that that decision is to be treated as never having been made.
(10) Subject to sub-paragraph (12) below, an election under sub-paragraph (1) above shall not apply to any contributions in respect of income which, before the election was made, counted as employment income for a tax year by virtue of Part 7 of ITEPA 2003.
(11) Regulations made by the Inland Revenue may make provision with respect to the making of elections for the purposes of this paragraph and the giving of approvals for the purposes of sub-paragraph (1)(b) above; and any such regulations may, in particular—
(a) prescribe the matters that must be contained in such an election;
(b) provide for the manner in which such an election is to be capable of being made and of being confined to particular liabilities or the part of particular liabilities; and
(c) provide for the making of applications for such approvals and for the manner in which those applications are to be dealt with.
(12) Where—
(a) an election is made under this paragraph before the end of the period of three months beginning with the date of the passing of the Child Support, Pensions and Social Security Act 2000, and
(b) that election is expressed to relate to liabilities for contributions arising on or after 19th May 2000 and before the making of the election,
this paragraph shall have effect in relation to those liabilities as if sub-paragraph (2) above provided for them to be deemed to have fallen on the earner (instead of on the secondary contributor); and the secondary contributor shall accordingly be entitled to reimbursement from the earner for any payment made by that contributor in or towards the discharge of any of those liabilities.
(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(14) In this paragraph “tribunal” means the First-tier Tribunal or, where determined under Tribunal Procedure Rules, the Upper Tribunal.
General provisions as to Class 1 contributions
4 Regulations made by the Inland Revenue may, in relation to Class 1 contributions, make provision—
(a) for calculating the amounts payable according to a scale prepared from time to time by the Inland Revenue or otherwise adjusting them so as to avoid fractional amounts or otherwise facilitate computation;
(b) for requiring that the liability in respect of a payment made in a tax week, in so far as the liability depends on any conditions as to a person’s age or retirement, shall be determined as at the beginning of the week or as at the end of it;
(c) for securing that liability is not avoided or reduced by a person following in the payment of earnings any practice which is abnormal for the employment in respect of which the earnings are paid; and
(d) without prejudice to sub-paragraph (c) above, for enabling the Inland Revenue, where they are satisfied as to the existence of any practice in respect of the payment of earnings whereby the incidence of Class 1 contributions is avoided or reduced by means of irregular or unequal payments, to give directions for securing that such contributions are payable as if that practice were not followed.
Class 1A contributions
5 Regulations made by the Inland Revenue may—
(a) make provision for calculating the amount of Class 1A contributions so as to avoid fractional amounts;
(b) modify section 10 above in relation to cases where something is provided or made available by reason of two or more employed earner’s employments under different employers.
Class 1B contributions
5A Regulations made by the Inland Revenue may make provision for calculating the amount of Class 1B contributions so as to avoid fractional amounts.
Power to combine collection of contributions with tax
6 (1) Regulations made by the Inland Revenue may—
(a) provide for Class 1, Class 1A, Class 1B or Class 2 contributions to be paid, accounted for and recovered in a similar manner to income tax in relation to which PAYE regulations have effect;
(b) apply or extend with or without modification in relation to such contributions any of the provisions of the Income Tax Acts or of PAYE regulations;
(c) make provision for the appropriation of the payments made by any person between his liabilities in respect of income tax and contributions.
(2) Without prejudice to the generality of sub-paragraph (1) above, the provision that may be made by virtue of paragraph (a) of that sub-paragraph includes in relation to Class 1, Class 1A or Class 1B contributions—
(a) provision for requiring the payment of interest on sums due in respect of Class 1, Class 1A or Class 1B contributions which are not paid by the due date, for determining the date (being, in the case of Class 1 contributions, not less than 14 days after the end of the tax year in respect of which the sums are due) from which such interest is to be calculated and for enabling the repayment or remission of such interest;
(b) provision for requiring the payment of interest on sums due in respect of Class 1, Class 1A or Class 1B contributions which fall to be repaid and for determining the date ... from which such interest is to be calculated;
(c) provision for, or in connection with, the imposition and recovery of penalties in relation to any returns required to be made which relate to Class 1, Class 1A or Class 1B contributions, but subject to sub-paragraph (7) and paragraph 7 below;
and any reference to contributions or income tax in paragraph (b) or (c) of sub-paragraph (1) above shall be construed as including a reference to any interest or penalty in respect of contributions or income tax, as the case may be.
(3) The rate of interest applicable for any purpose of this paragraph shall be the rate from time to time prescribed for that purpose under section 178 of the Finance Act 1989.
(4) Where—
(a) a decision relating to contributions falls to be made under or by virtue of section 8, 10 or 11 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999; and
(b) the decision will affect a person’s liability for, or the amount of, any interest due in respect of those contributions,
regulations under sub-paragraph (1) above shall not require any such interest to be paid until the decision has been made.
(4A) Regulations under sub-paragraph (1) above shall not require the payment of interest on a sum due in respect of a Class 1B contribution if a relevant tax appeal has been brought but not finally determined; and “a relevant tax appeal” means an appeal against a determination as to the amount of income tax in respect of which the person liable to pay the Class 1B contribution is accountable in accordance with the relevant PAYE settlement agreement.
(4B) Interest required to be paid, by virtue of sub-paragraph (2)(a) or (b) above, by regulations under sub-paragraph (1) above shall be paid without any deduction of income tax and shall not be taken into account in computing any income, profits or losses for any tax purposes.
(4C) Interest payable under section 101 of the Finance Act 2009 (late payment interest on sums due to HMRC) on sums due in respect of Class 1 contributions is not to be taken into account in computing any income, profits or losses for any tax purposes.
(5) The Secretary of State may by regulations made with the concurrence of the Inland Revenue make such provision as the Secretary of State considers expedient in consequence of any provision made by or under section 4A, 159A or 167 above.
(6) Provision made in regulations under sub-paragraph (5) above may in particular require the inclusion—
(a) in returns, certificates and other documents; or
(b) in any other form of record;
which the regulations require to be kept or produced or to which those regulations otherwise apply, of such particulars relating to relevant payments or benefits within the meaning of section 4A above or (as the case may be) to statutory sick pay, statutory maternity pay or deductions or payments made by virtue of section 167(1) above as may be prescribed by those regulations.
(7) Section 98 of the Taxes Management Act 1970 shall apply in relation to regulations made under sub-paragraph (1) or (5) as it applies in relation to PAYE regulations.
(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special penalties in the case of certain returns
7 (1) This paragraph applies where regulations under sub-paragraph (1) of paragraph 6 above make provision requiring any return which is to be made in accordance with a specified provision of regulations under that sub-paragraph (the “contributions return”) to be made—
(a) at the same time as any specified return required to be made in accordance with a provision of PAYE regulations or regulations made under section 70(1)(a) or 71 (sub-contractors) of the Finance Act 2004 to which section 98A of the Taxes Management Act 1970 applies (the “tax return”); or
(b) if the circumstances are such that the return mentioned in paragraph (a) above does not fall to be made, at a time defined by reference to the time for making that return, had it fallen to be made;
and, in a case falling within paragraph (b) above, any reference in the following provisions of this paragraph to the tax return shall be construed as a reference to the return there mentioned.
(2) Where this paragraph applies, regulations under paragraph 6(1) above may provide that section 98A of the Taxes Management Act 1970 (penalties for late, fraudulent or negligent returns) shall apply in relation to any specified provision of regulations in accordance with which the contributions return is required to be made; and where they so provide then, subject to the following provisions of this paragraph—
(a) that section shall apply in relation to the contributions return as it applies in relation to the tax return; and
(b) sections 100 to 100D and 102 to 105 of that Act shall apply in relation to a penalty under section 98A of that Act to which a person is liable by virtue of this sub-paragraph as they apply in relation to any other penalty under that section.
(3) Where a person has been required to pay a penalty under paragraph (a) of subsection (2) of section 98A of that Act (first twelve months’ default) in consequence of a failure in respect of a tax return, he shall not also be required to pay a penalty under that paragraph in respect of any failure in respect of the associated contributions return.
(4) In any case where—
(a) a person is liable to a penalty under subsection (2)(b) or (4) of that section (tax-related penalties) in respect of both a tax return and its associated contributions return, and
(b) an officer of the Inland Revenue authorised for the purposes of section 100 of that Act has determined that a penalty is to be imposed under that provision in respect of both returns,
the penalty so imposed shall be a single penalty of an amount not exceeding the limit determined under sub-paragraph (5) below.
(5) The limit mentioned in sub-paragraph (4) above is an amount equal to the sum of—
(a) the maximum penalty that would have been applicable under subsection (2)(b) or (4) of section 98A of that Act (as the case may be) for a penalty in relation to the tax return only; and
(b) the maximum penalty that would have been so applicable in relation to the associated contributions return only.
(6) So much of any single penalty imposed by virtue of sub-paragraph (4) above as is recovered by the Inland Revenue shall, after the deduction of any administrative costs of the Inland Revenue attributable to its recovery, for the purposes of making any payment into the National Insurance Fund be apportioned between income tax and contributions in the ratio T:C, where—
T is the maximum penalty that could have been imposed under the provision in question in relation to the tax return only; and
C is the maximum penalty that could have been so imposed in relation to the associated contributions return only.
(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8) Sub-paragraph (6) above shall have effect notwithstanding any provision which treats a penalty under section 98A of that Act as if it were tax charged in an assessment and due and payable.
(9) In the application of section 98A of that Act by virtue of this paragraph, any reference to a year of assessment shall be construed, in relation to a contributions return, as a reference to the tax year corresponding to that year of assessment.
(10) In the application of section 100D of that Act (court proceedings for penalties in cases of fraud) by virtue of this paragraph—
(a) subsection (2) shall have effect with the omission of the words “ or Northern Ireland ” and paragraph (c); and
(b) subsection (3) shall have effect with the omission of the words from “ and any such proceedings instituted in Northern Ireland ” onwards.
(11) In the application of section 103 of that Act (time limit for recovery) by virtue of this paragraph—
(a) any reference in subsection (1) to tax shall be taken to include a reference to Class 1, Class 1A and Class 1B contributions;
(b) any penalty by virtue of sub-paragraph (4) above shall be regarded as a penalty in respect of the tax return in question; and
(c) where, by virtue of subsection (2) (death), subsection (1)(b) does not apply in relation to a penalty under section 98A(2)(b) or (4) of that Act in respect of a tax return, it shall also not apply in relation to a penalty so imposed in respect of the associated contributions return.
(12) A penalty under section 98A of that Act as it applies by virtue of this paragraph shall not be imposed where—
(a) a decision relating to contributions falls to be made under or by virtue of section 8, 10 or 11 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999, and has not yet been made; and
(b) the decision will affect a person’s liability for the penalty, or the amount of it.
(13) For the purposes of this paragraph—
(a) “contributions return” and “tax return” shall be construed in accordance with sub-paragraph (1) above; and
(b) a contributions return and a tax return are “associated” if the contributions return is required to be made—
(i) at the same time as the tax return, or
(ii) where sub-paragraph (1)(b) above applies, at a time defined by reference to the time for making the tax return.
7A (1) This paragraph applies where paragraph 7 above applies; and in this paragraph “contributions return” has the same meaning as in that paragraph.
(2) Without prejudice to paragraph 7(2) above or to the other powers of the Inland Revenue to penalise omissions or errors in returns, regulations made by the Treasury may provide for the Inland Revenue to impose penalties in respect of a person who, in making a contributions return, fraudulently or negligently—
(a) fails to provide any information or computation that he is required to provide; or
(b) provides any such information or computation that is incorrect.
(3) Regulations under sub-paragraph (2) above shall—
(a) prescribe the rates of penalty, or provide for how they are to be ascertained;
(b) provide for the penalty to be imposed by the Inland Revenue within six years after the date on which the penalty is incurred;
(c) provide for determining the date on which, for the purposes of paragraph (b) above, the penalty is incurred;
(d) prescribe the means by which the penalty is to be enforced; and
(e) provide for enabling the Inland Revenue, in their discretion, to mitigate or to remit the penalty, or to stay or to compound any proceedings for it.
Collection of contributions otherwise than through PAYE system
7B (1) The Treasury may by regulations provide that, in such cases or circumstances as may be prescribed, Class 1, Class 1A, Class 1B or Class 2 contributions shall be paid to the Inland Revenue in a manner different from that in which income tax in relation to which PAYE regulations apply is payable.
(2) Regulations under this paragraph may, in particular—
(a) provide for returns to be made to the Inland Revenue by such date as may be prescribed;
(b) prescribe the form in which returns are to be made, or provide for returns to be made in such form as the Inland Revenue may approve;
(c) prescribe the manner in which contributions are to be paid, or provide for contributions to be paid in such manner as the Inland Revenue may approve;
(d) prescribe the due date for the payment of contributions;
(e) require interest to be paid on contributions that are not paid by the due date, and provide for determining the date from which such interest is to be calculated;
(f) provide for interest to be paid on contributions that fall to be repaid;
(g) provide for determining the date from which interest to be charged or paid pursuant to regulations under paragraph (e) or (f) above is to be calculated;
(h) provide for penalties to be imposed in respect of a person who—
(i) fails to submit, within the time allowed, a return required to be made in accordance with regulations under paragraph (a) above;
(ii) in making such a return, fraudulently or negligently fails to provide any information or computation that he is required to provide;
(iii) in making such a return, fraudulently or negligently provides any incorrect information or computation; or
(iv) fails to pay Class 2 contributions by the due date;
(i) provide for a penalty imposed pursuant to regulations under paragraph (h) above to carry interest from the date on which it becomes payable until payment.
(3) Where—
(a) a decision relating to contributions falls to be made under section 8, 9, 10, 12, 14 or 15 of the Social Security Act 1998; and
(b) the decision will affect a person’s liability for, or the amount of, any interest due in respect of those contributions,
regulations under sub-paragraph (2)(e) above shall not require any such interest to be paid until the decision has been made.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) Regulations under sub-paragraph (2)(h) above shall—
(a) prescribe the rates of penalty, or provide for how they are to be ascertained;
(b) ... provide for the penalty to be imposed by the Inland Revenue—
(i) within six years after the date on which the penalty is incurred; or
(ii) where the amount of the penalty is to be ascertained by reference to the amount of any contributions payable, at any later time within three years after the final determination of the amount of those contributions;
(c) provide for determining the date on which, for the purposes of paragraph (b) above, the penalty is incurred;
(d) prescribe the means by which the penalty is to be enforced; and
(e) provide for enabling the Inland Revenue, in their discretion, to mitigate or to remit the penalty, or to stay or to compound any proceedings for it.
(5A) Regulations under this paragraph may, in relation to any penalty imposed by such regulations, make provision applying (with or without modifications) any enactment applying for the purposes of income tax that is contained in Part X of the Taxes Management Act 1970 (penalties).
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8) Interest or penalties may be charged by virtue of regulations under this paragraph in respect of a period before the coming into force of section 57 of the Social Security Act 1998 but only to the extent that interest or penalties would have been chargeable if the contributions in question had been recoverable, in respect of that period, by virtue of regulations under paragraph 6 above.
(9) Any reference to contributions in sub-paragraph (1) above shall be construed as including a reference to any interest or penalty payable, in respect of contributions, by virtue of regulations under paragraph (e) or (h) of sub-paragraph (2) above.
(10) The rate of interest applicable for any purpose of this paragraph shall be the rate from time to time prescribed under section 178 of the Finance Act 1989 for the corresponding purpose of paragraph 6 above.
7BZA (1) The Inland Revenue may by regulations provide for Class 1, Class 1A, Class 1B or Class 2 contributions to which regulations under paragraph 7B apply to be recovered in a similar manner to income tax.
(2) Regulations under sub-paragraph (1) may apply or extend with or without modification in relation to such contributions any of the provisions of the Income Tax Acts or of PAYE regulations.
(3) Any reference to contributions in this paragraph shall be construed as including a reference to any interest or penalty payable, in respect of contributions, by virtue of regulations under paragraph (e) or (h) of paragraph 7B(2).
7BA The Inland Revenue may by regulations provide for amounts in respect of contributions or interest that fall to be paid or repaid in accordance with any regulations under this Schedule to be set off, or to be capable of being set off, in prescribed circumstances and to the prescribed extent, against any such liabilities under regulations under this Schedule of the person entitled to the payment or repayment as may be prescribed.
7BB (1) Regulations may provide, in connection with maternity allowance under section 35 or 35B, for a person who is, or will be, ... entitled to pay a Class 2 contribution in respect of a week in a tax year to be able to pay a Class 2 contribution in respect of that week at any time in the period—
(a) beginning with that week, and
(b) ending with a prescribed date.
(2) The regulations may provide that where a person pays a Class 2 contribution in respect of a week in a tax year under the regulations—
(a) the contribution is to be treated, before the end of the tax year, as a Class 2 contribution under section 11(6);
(b) the contribution is to be treated, after the end of the tax year—
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(ii) ...as a Class 2 contribution under section 11(6).
(3) Regulations under this paragraph are to be made by the Treasury acting with the concurrence of the Secretary of State.
General regulation - making powers
8 (1) The appropriate authority may by regulations provide—
(a) for requiring persons to maintain, in such form and manner as may be prescribed, records—
(i) of the earnings paid by them to and in respect of earners, and
(ii) of the contributions paid or payable in respect of earnings so paid,
for the purpose of enabling the incidence of liability for contributions of any class to be determined, and to retain the records for so long as may be prescribed;
(aa) for requiring persons to maintain, in such form and manner as may be prescribed, records of such matters as may be prescribed for purposes connected with the employment allowance provisions (within the meaning of the National Insurance Contributions Act 2014), and to retain the records for so long as may be prescribed;
(b) for requiring persons to maintain, in such form and manner as may be prescribed, records of such matters as may be prescribed for the purpose of enabling the incidence of liability for Class 1A or Class 1B contributions to be determined, and to retain the records for so long as may be prescribed;
(c) for treating primary Class 1 contributions, when payable on the primary contributor’s behalf by the secondary contributor, but not paid, as actually paid where the failure to pay is shown not to have been with the consent or connivance of, or attributable to any negligence on the part of, the primary contributor and, in the case of contributions so treated, for treating them also as paid at a prescribed time or in respect of a prescribed period;
(ca) for requiring a secondary contributor to notify a person to whom any of his liabilities are transferred by an election under paragraph 3B above of—
(i) any transferred liability that arises;
(ii) the amount of any transferred liability that arises; and
(iii) the contents of any notice of withdrawal by the Inland Revenue of any approval that relates to that election;
(d) for treating, for the purpose of any entitlement to benefit, contributions paid at or after any prescribed time as paid at some other time (whether earlier or later) or, in the case of contributions paid after the due date for payment, or at such later date as may be prescribed, as not having been paid;
(e) for enabling contributions to be treated as paid in respect of a tax year earlier or later than that in respect of which they were actually paid;
(f) for treating (for the purposes of Class 2 contributions) a week which falls partly in one, and partly in another, tax year as falling wholly within one or the other of those tax years;
(g) for treating contributions of the wrong class, or at the wrong rate, or of the wrong amount, as paid on account of contributions properly payable (notwithstanding section 14 above, in the case of Class 3 contributions) or as paid (wholly or in part) in discharge of a liability for a contributions equivalent premium;
(h) for the repayment, in prescribed cases, of the whole or a prescribed part of any contributions paid by reference to earnings which have become repayable;
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(ia) for the repayment, in prescribed cases, of the whole or a prescribed part of a Class 1A or of a Class 1B contribution;
(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(l) without prejudice to paragraph (g) above, for enabling—
(i) the whole or part of any payment of secondary Class 1 contributions to be treated as a payment of Class 1A contributions or a Class 1B contribution;
(ii) the whole or part of any payment of Class 1A contributions to be treated as a payment of secondary Class 1 contributions , a Class 1B contribution or Class 2 contributions;
(iia) the whole or part of any payment of a Class 1B contribution to be treated as a payment of secondary Class 1 contributions, Class 1A contributions or Class 2 contributions;
(iii) the whole or part of any payment of Class 2 contributions to be treated as a payment of secondary Class 1 contributions , Class 1A contributions or a Class 1B contribution;
(m) for the return of the whole or any prescribed part of any contributions paid either in error or in such circumstances that, under any provision of Part I of this Act or of regulations, they fall to be repaid;
(n) for treating a person as being an employed earner, notwithstanding that his employment is outside Great Britain;
(o) for treating a person’s employment as continuing during periods of holiday, unemployment or incapacity for work and in such other circumstances as may be prescribed;
(p) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(q) for any other matters incidental to the payment, collection or return of contributions.
(1A) In sub-paragraph (1), “the appropriate authority” means the Treasury, except that, in relation to—
(a) provision made by virtue of paragraph (d) of that sub-paragraph, and
(b) provision made by virtue of paragraph (q) of that sub-paragraph in relation to the matters referred to in paragraph (d),
it means the Secretary of State acting with the concurrence of the Inland Revenue.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9 The Treasury may by regulations provide that—
(a) for the purpose of determining whether a contribution is payable in respect of any person, or
(b) for determining the amount or rate of any contribution,
he is to be treated as having attained at the beginning of a week, or as not having attained until the end of a week, any age which he attains during the course of that week.
Deduction of contributions from pension, etc.
10 (1) Where a person is in receipt of a pension or allowance payable by the Secretary of State by virtue of any prescribed enactment or instrument, the Secretary of State may with the consent of that person pay any contributions (other than Class 1 or Class 4 contributions) payable by him and deduct the amount so paid from the pension or allowance.
(2) Sub-paragraph (1) above shall have effect notwithstanding anything in any Act, Royal Warrant, Order in Council, order or scheme.
Sickness payments counting as remuneration
11 (1) The Treasury may by regulations make provision as to the manner in which, and the person through whom, any sickness payment which, by virtue of section 4(1) above, is to be treated as remuneration derived from employed earner’s employment is to be made.
(2) In any case where regulations made under sub-paragraph (1) above have the effect of requiring a registered friendly society (within the meaning of the Friendly Societies Act 1974) to make amendments to its rules, the amendments may, notwithstanding any provision of those rules, be made in accordance with the procedure prescribed by regulations made by the Chief Registrar of Friendly Societies for the purposes of this paragraph.
SCHEDULE 2 Levy of Class 4 contributions with income tax
Section 16(3).
Interpretation
1 In this Schedule—
(a) “the Act of 1988” means the Income and Corporation Taxes Act1988;
(ab) “ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;
(ac) “ITA 2007” means the Income Tax Act 2007;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) “year” means year of assessment within the meaning of the Income Tax Acts (see section 989 of ITA 2007).
Method of computing profits or gains
2 Subject to the following paragraphs, Class 4 contributions shall be payable in respect of the full amount of all profits—
(a) which are the profits of any relevant trade, profession or vocation which is not carried on wholly outside the United Kingdom, and
(b) which are chargeable to income tax under Chapter 2 of Part 2 of ITTOIA 2005.
Reliefs
3 (1) For the purposes of computing the amount of profits ... in respect of which Class 4 contributions are payable, relief shall be available under, and in the manner provided by, the following provisions of ITA 2007—
(a) sections 64 and 72 (set-off of trade losses against general income), but only where loss arises from activities the profits ... of which would be brought into computation for the purposes of Class 4 contributions;
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) section 83 (carry-forward of loss against subsequent profits); and
(d) section 89 (carry-back of terminal losses).
(2) The following relief provisions ... shall not apply, that is to say—
(a) Chapter I of Part VII of the Act of 1988 and Chapters 2 and 3 of Part 3 and sections 457, 458 and 459 of ITA 2007 (personal reliefs);
(b) section 383 of ITA 2007 (relief for payment of interest);
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(d) sections 88 and 94 of ITA 2007 (treatment of interest as a loss for purposes of carry-forward or carry-back);
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
(f) sections 619 and 620 (premiums or other consideration under annuity contracts and trust schemes); and
(g) section 639 (personal pension contributions).
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) Where in the year 1990-1991 or any subsequent year of assessment for which a person claims and is allowed relief by virtue of sub-paragraph (1) above there falls to be made in computing his net income for income tax purposes a deduction in respect of any loss in any relevant trade, profession or vocation—
(a) the amount of the deduction shall, as far as may be, be treated for the purpose of the charge to Class 4 contributions as reducing the person’s profits ... for that year of any relevant trade, profession or vocation, and
(b) any excess shall be treated for that purpose as reducing such profits ... for subsequent years (being deducted as far as may be from those of the immediately following year, whether or not the person claims or is entitled to claim relief under this paragraph for that year, and, so far as it cannot be so deducted, then from those of the next year, and so on).
(5) Relief shall be allowed, in respect of—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) payments under section 383 of ITA 2007 (relief for payment of interest), being payments for which relief from income tax is or can be given,
(c) payments from which a sum representing income tax must be deducted under—
(i) section 900(2) of ITA 2007 (commercial payments made by individuals),
(ii) section 903(5) of that Act (patent royalties), or
(iii) section 906(5) of that Act (certain royalties etc where usual place of abode of owner is abroad),
(d) so much of any payment from which a sum representing income tax must be deducted under section 910(2) of ITA 2007 (proceeds of a sale of patent rights: payments to non-UK residents) as is equal to the amount referred to in that provision as “the chargeable amount”, or
(e) a payment from which a sum representing income tax must be deducted as a result of a direction under section 944(2) of ITA 2007 (tax avoidance: certain payments to non-UK residents)
so far as the payment is incurred wholly or exclusively for the purposes of any relevant trade, profession or vocation, by way of deduction from or set-off against profits ... chargeable to Class 4 contributions for the year in which the payments are made; and, in the case of any insufficiency of the profits ... of that year, the payments shall be carried forward and deducted from or set off against the profits ... of any subsequent year (being deducted or set off as far as may be from or against the profits ... of the immediately following year, whether or not relief can be claimed under this paragraph for that year, and so far as it cannot be so deducted, from or against those of the next year, and so on).
Partnerships
4 (1) Where a trade or profession is carried on by two or more persons jointly, the liability of any one of them in respect of Class 4 contributions shall arise in respect of his share of the profits ... of that trade or profession (so far as immediately derived by him from carrying it on); and for this purpose his share shall be aggregated with his share of the profits ... of any other trade, profession or vocation (so far as immediately derived by him from carrying it on or exercising it).
(2) Where sub-paragraph (1) above applies, the Class 4 contributions for which a person is liable in respect of the profits ... of the trade or profession carried on jointly (aggregated, where appropriate, as mentioned in that sub-paragraph) shall be charged on him separately.
Trustees, etc.
5 In any circumstances in which apart from this paragraph a person would—
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) by virtue of section 8 of ITTOIA 2005 be assessed and charged to Class 4 contributions in respect of profits ... received or receivable by him in the capacity of trustee,
such contributions shall not be payable either by him or by any other person.
Other provisions
6 (1) Section 101 of the Finance Act 2009 (late payment interest on sums due to HMRC) shall apply in relation to any amount due in respect of Class 4 contributions as it applies in relation to income tax; and section 102 of the Finance Act 2009 (repayment interest on sums to be paid by HMRC) shall, with the necessary modifications, apply in relation to Class 4 contributions as it applies in relation to income tax.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Where an assessment has become final and conclusive for the purposes of income tax for any year, that assessment shall also be final and conclusive for the purposes of computing liability for Class 4 contributions; and no allowance or adjustment of liability, on the ground of diminution of income or loss, shall be taken into account in computing profits ... chargeable to Class 4 contributions unless that allowance or adjustment has previously been made on an application under the special provisions of the Income Tax Acts relating to it, or falls to be allowed under paragraph 3(5) of this Schedule.
8 The provisions of Part V of the Taxes Management Act 1970 (appeals, etc.) shall apply with the necessary modifications in relation to Class 4 contributions as they apply in relation to income tax; but nothing in this Schedule affects the extent to which the Income Tax Acts apply with respect to any decision falling to be made—
(a) under subsection (1) of section 17 above or subsection (1) of section 17 of the Northern Ireland Contributions and Benefits Act as to whether by regulations under that subsection a person is excepted from liability for Class 4 contributions, or his liability is deferred; or
(b) under regulations made by virtue of section 17(3) or (4) or 18 above or section 17(3) or (4) or 18 of the Northern Ireland Contributions and Benefits Act.
...
9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 3 Contribution conditions for entitlement to benefit
Section 21(3) and (4).
Part I The conditions
Unemployment benefit
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term incapacity benefit
2 (1) The contribution conditions for short-term incapacity benefit are the following.
(2) The first condition is that—
(a) the claimant must have actually paid contributions of a relevant class in respect of one of the last three complete years before the beginning of the relevant benefit year, and those contributions must have been paid before the relevant time; and
(b) the earnings factor derived as mentioned in sub-paragraph (4) below must be not less than that year’s lower earnings limit multiplied by 25.
(3) The second condition is that—
(a) the claimant must in respect of the last two complete years before the beginning of the relevant benefit year have either paid or been credited with contributions of a relevant class or been credited (in the case of 1987-88 or any subsequent year) with earnings; and
(b) the earnings factor derived as mentioned in sub-paragraph (5) below must be not less in each of those years than the year’s lower earnings limit multiplied by 50.
(4) The earnings factor referred to in paragraph (b) of sub-paragraph (2) above is that which is derived—
(a) if the year in question is 1987-88 or any subsequent year—
(i) from so much of the claimant’s earnings as did not exceed the upper earnings limit and upon which primary Class 1 contributions have been paid or treated as paid; or
(ii) from Class 2 contributions; and
(b) if the year in question is an earlier year, from the contributions paid as mentioned in paragraph (a) of that sub-paragraph.
(5) The earnings factor referred to in paragraph (b) of sub-paragraph (3) above is that which is derived—
(a) if the year in question is 1987-88 or any subsequent year—
(i) from so much of the claimant’s earnings as did not exceed the upper earnings limit and upon which primary Class 1 contributions have been paid or treated as paid or from earnings credited; or
(ii) from Class 2 contributions; and
(b) if the year in question is an earlier year, from the contributions referred to in paragraph (a) of that sub-paragraph.
(6) For the purposes of these conditions—
(a) “the relevant time” is the day in respect of which benefit is claimed;
(b) “the relevant benefit year” is the benefit year in which there falls the beginning of the period of incapacity for work which includes the relevant time.
(7) Where a person makes a claim for incapacity benefit and does not satisfy the first contribution condition (specified in sub-paragraph (2) above) or, as the case may be, the second contribution condition (specified in sub-paragraph (3) above) and, in a later benefit year in which he would satisfy that condition had no such claim been made, he makes a further claim for incapacity benefit, the previous claim shall be disregarded.
(8) Regulations may—
(a) provide for the first contribution condition (specified in sub-paragraph (2) above) to be taken to be satisfied in the case of persons who have been entitled to any prescribed description of benefit during any prescribed period or at any prescribed time;
(b) with a view to securing any relaxation of the requirements of that condition (as so specified) in relation to persons who have been so entitled, provide for that condition to apply in relation to them subject to prescribed modifications.
(9) In sub-paragraph (8)—
“benefit” includes (in addition to any benefit under Parts II to V of this Act)—
any benefit under Parts VII to XII of this Act, and
credits under regulations under section 22(5) above;
“modifications” includes additions, omissions and amendments.
Maternity allowance
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
...
4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Widowed mother’s allowance, widowed parent’s allowance, bereavement allowance and widow’s pension; retirement pensions (Categories A and B)
5 (1) This paragraph sets out the contribution conditions for—
(a) a widowed mother's allowance, a widowed parent's allowance or a widow's pension;
(b) a Category A retirement pension (other than one in relation to which paragraph 5A applies);
(c) a Category B retirement pension in the cases provided for by any of sections 48A to 51ZA.
(2) The first condition is that—
(a) the contributor concerned must in respect of any one relevant year have actually paid contributions of a relevant class; and
(b) the earnings factor derived—
(i) if that year is 1987-88 or any subsequent year, from so much of the contributor’s earnings as did not exceed the upper earnings limit and upon which such of those contributions as are primary Class 1 contributions were paid or treated as paid and any Class 2 or Class 3 contributions, or
(ii) if that year is an earlier year, from the contributions referred to in paragraph (a) above,
must be not less than the qualifying earnings factor for that year.
(3) The second condition is that—
(a) the contributor concerned must, in respect of each of not less than the requisite number of years of his working life, have paid or been credited with contributions of a relevant class or been credited (in the case of 1987-88 or any subsequent year) with earnings; and
(b) in the case of each of those years, the earnings factor derived as mentioned in sub-paragraph (4) below must be not less than the qualifying earnings factor for that year.
(4) For the purposes of paragraph (b) of sub-paragraph (3) above, the earnings factor—
(a) in the case of 1987-88 or any subsequent year, is that which is derived from—
(i) so much of the contributor’s earnings as did not exceed the upper earnings limit and upon which such of the contributions mentioned in paragraph (a) of that sub-paragraph as are primary Class 1 contributions were paid or treated as paid or earnings credited; and
(ii) any Class 2 or Class 3 contributions for the year; or
(b) in the case of any earlier year, is that which is derived from the contributions mentioned in paragraph (a) of that sub-paragraph.
(5) For the purposes of the first condition, a relevant year is any year ending before that in which the contributor concerned attained pensionable age or died under that age; and the following table shows the requisite number of years for the purpose of the second condition, by reference to a working life of a given duration—
Duration of working life | Requisite number of years
10 years or less | The number of years of the working life, minus 1.
20 years or less (but more than 10) | The number of years of the working life, minus 2.
30 years or less (but more than 20) | The number of years of the working life, minus 3.
40 years or less (but more than 30) | The number of years of the working life, minus 4.
More than 40 years | The number of years of the working life, minus 5.
(6) The first condition shall be taken to be satisfied if the contributor concerned was entitled to long-term incapacity benefit at any time during—
(a) the year in which he attained pensionable age or died under that age, or
(b) the year immediately preceding that year.
(6A) The first condition shall be taken to be satisfied if the contributor concerned was entitled to main phase employment and support allowance at any time during—
(a) the year in which he attained pensionable age or died under that age, or
(b) the year immediately preceding that year.
(6B) The reference in sub-paragraph (6A) to main phase employment and support allowance is to an employment and support allowance in the case of which the calculation of the amount payable in respect of the claimant includes an addition under section 2(1)(b) or 4(2)(b) of the Welfare Reform Act 2007 (addition where conditions of entitlement to support component or work-related activity component satisfied).
(7) The second condition shall be taken to be satisfied notwithstanding that paragraphs (a) and (b) of sub-paragraph (3) above are not complied with as respects each of the requisite number of years if—
(a) those paragraphs are complied with as respects at least half that number of years ... ; and
(b) in each of the other years the contributor concerned was, within the meaning of regulations, precluded from regular employment by responsibilities at home.
But nothing in this sub-paragraph applies in relation to any benefit to which section 23A above applies.
(7A) Regulations may provide that a person is not to be taken for the purposes of sub-paragraph (7)(b) above as precluded from regular employment by responsibilities at home unless he meets the prescribed requirements as to the provision of information to the Secretary of State.
(8) For the purposes of Parts I to VI of this Act a person’s working life is the period between—
(a) (inclusive) the tax year in which he attained the age of 16; and
(b) (exclusive) the tax year in which he attained pensionable age or died under that age.
5A (1) This paragraph applies to—
(a) a Category A retirement pension in a case where the contributor concerned attains pensionable age on or after 6th April 2010;
(b) a Category B retirement pension in the cases provided for by any of sections 48A to 51ZA.
(2) The contribution condition for a Category A or Category B retirement pension in relation to which this paragraph applies is that—
(a) the contributor concerned must, in respect of each of not less than 30 years of his working life, have paid or been credited with contributions of a relevant class or been credited (in the case of 1987-88 or any subsequent year) with earnings; and
(b) in the case of each of those years, the earnings factor derived as mentioned in sub-paragraph (3) below must be not less than the qualifying earnings factor for that year.
(3) For the purposes of paragraph (b) of sub-paragraph (2) above, the earnings factor—
(a) in the case of 1987-88 or any subsequent year, is that which is derived from—
(i) so much of the contributor's earnings as did not exceed the upper earnings limit and upon which such of the contributions mentioned in paragraph (a) of that sub-paragraph as are primary Class 1 contributions were paid or treated as paid or earnings credited; and
(ii) any Class 2 or Class 3 contributions for the year; or
(b) in the case of any earlier year, is that which is derived from the contributions mentioned in paragraph (a) of that sub-paragraph.
(4) Regulations may modify sub-paragraphs (2) and (3) above for the purposes of their application in a case where—
(a) the contributor concerned has paid, or been credited with, contributions, or
(b) contributions have been deemed to be, or treated as, paid by or credited to him,
under the National Insurance Act 1946 or the National Insurance Act 1965.
Child’s special allowance
6 (1) The contribution condition for a child’s special allowance is that—
(a) the contributor concerned must in respect of any one relevant year have actually paid contributions of a relevant class; and
(b) the earnings factor derived from those contributions must be not less than that year’s lower earnings limit multiplied by 50.
(2) For the purposes of this condition, a relevant year is any year ending before the date on which the contributor concerned attained pensionable age or died under that age.
Part II Satisfaction of conditions in early years of contribution
7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8 Where a person claims short-term incapacity benefit, he shall be taken to satisfy the first contribution condition for the benefit if on a previous claim for any short-term benefit he has satisfied the first contribution condition for that benefit, by virtue of paragraph 8 of Schedule 3 to the 1975 Act, with contributions of a class relevant to short-term incapacity benefit.
9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE 4 Rates of benefits, etcNote: This Schedule is subject to alteration by orders made by the Secretary of State under Part X of the Administration Act.
PART I CONTRIBUTORY PERIODICAL BENEFITS
Description of benefit | Weekly rate
2. | Short-term incapacity benefit. | (a)lower rate | £110.70
(b)higher rate | £130.90
2A. | Long-term incapacity benefit. | £146.60
5. | Category B retirement pension where section 48A(4) or 48AA(4) applies. | £110.75
PART II BEREAVEMENT PAYMENT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III NON-CONTRIBUTORY PERIODICAL BENEFITS
Description of benefit | Weekly rate
1. | Attendance allowance. | (a)higher rate | £114.60
(b)lower rate | £76.70
(the appropriate rate being determined in accordance with section 65(3)).
2. | Severe disablement allowance. | £103.85
3. | Age related addition. | (a)higher rate | £15.50
(b)middle rate | £8.60
(c)lower rate | £8.60
(the appropriate rate being determined in accordance with section 69(1)).
4. | Carer’s allowance. | £86.45
5. | Guardian’s allowance. | £22.95
7. | Category D retirement pension. | £110.75
8. | Age addition (to a pension of any category, and otherwise under section 79). | £0.25.
PART IV INCREASES FOR DEPENDANTS
Benefit to which increase applies (1) | Increase for adult dependant (3)
£
1A. | Short-term incapacity benefit—
(a) | where the beneficiary is under pensionable age; | 66.35
(b) | where the beneficiary is over pensionable age. | 82.00
2. | Long-term incapacity benefit. | 85.15
8. | Severe disablement allowance. | 51.05
PART V RATES OF INDUSTRIAL INJURIES BENEFIT
Description of benefit, etc. | Rate
1. | Disablement pension (weekly rates). | For the several degrees of disablement set out in column (1) of the following Table, the respective amounts in column (2) of that Table.
TABLE
Degree of Disablement | Amount
(1) | (2)
Per cent. | £
100 | 233.90
90 | 210.51
80 | 187.12
70 | 163.73
60 | 140.34
50 | 116.95
40 | 93.56
30 | 70.17
20 | 46.78
2. | Maximum increase of weekly rate of disablement pension where constant attendance needed. | (a) | except in cases of exceptionally severe disablement | £93.60;
(b) | in any case | £187.20.
3. | Increase of weekly rate of disablement pension (exceptionally severe disablement). | £93.60.
4. | Maximum of aggregate of weekly benefit payable for successive accidents. | £233.90.
5. | Unemployability supplement under paragraph 2 of Schedule 7. | £144.65.
6. | Increase under paragraph 3 of Schedule 7 of weekly rate of unemployability supplement. | (a) | if on the qualifying date the beneficiary was under the age of 35 or if that date fell before 5th July 1948 | £30.00
(b) | if head (a) above does not apply and on the qualifying date the beneficiary was under the age of 40 and he had not attained pensionable age before 6th April 1979 | £30.00
(c) | if heads (a) and (b) above do not apply and on the qualifying date the beneficiary was under the age of 45 | £19.20
(d) | if heads (a), (b) and (c) above do not apply and on the qualifying date the beneficiary was under the age of 50 and had not attained pensionable age before 6th April 1979 | £19.20
(e) | in any other case | £9.60.
7. | Increase under paragraph 4 of Schedule 7 of weekly rate of disablement pension. | £11.35.
8. | Increase under paragraph 6 of Schedule 7 of weekly rate of disablement pension. | £86.45.
9. | Maximum disablement gratuity under paragraph 9 of Schedule 7. | £15,520.00
10. | Widow’s pension (weekly rates). | (b) | higher permanent rate | £184.90;
(c) | lower permanent rate 30 per cent of the first sum specified in section 44(4) (Category A basic retirement pension) (the appropriate rate being determined in accordance with paragraph 16 of Schedule 7)
11. | Widower’s pension (weekly rate). | £184.90.
12. | Weekly rate of allowance in respect of children and qualifying young persons under paragraph 18 of Schedule 7. | In respect of each child or qualifying young person | £11.35.
SCHEDULE 4A Additional pension: accrual rates for purposes of section 45(2)(c)
Part I The amount
1 (1) The amount referred to in section 45(2)(c) above is to be calculated as follows—
(a) take for each tax year concerned the amount for the year which is found under the following provisions of this Schedule;
(b) add the amounts together;
(c) divide the sum of the amounts by the number of relevant years;
(d) the resulting amount is the amount referred to in section 45(2)(c) above, except that if the resulting amount is a negative one the amount so referred to is nil.
(2) For the purpose of applying sub-paragraph (1) above in the determination of the rate of any additional pension by virtue of section ... 39C(1) ... or 48B(2) above, in a case where the deceased spouse died under pensionable age or by virtue of section 39C(1) ... or 48B(2) above, in a case where the deceased civil partner died under pensionable age, or by virtue of section 39C(1) above, in a case where the deceased cohabiting partner died under pensionable age, the divisor used for the purposes of sub-paragraph (1)(c) above shall be whichever is the smaller of the alternative numbers referred to below (instead of the number of relevant years).
(3) The first alternative number is the number of tax years which begin after 5th April 1978 and end before the date when the entitlement to the additional pension commences.
(4) The second alternative number is the number of tax years in the period—
(a) beginning with the tax year in which the deceased spouse, civil partner or cohabiting partner attained the age of 16 or, if later, 1978-79; and
(b) ending immediately before the tax year in which the deceased spouse, civil partner or cohabiting partner would have attained pensionable age if he had not died earlier.
(5) For the purpose of applying sub-paragraph (1) above in the determination of the rate of any additional pension by virtue of section 48BB(5) above, in a case where the deceased spouse or civil partner died under pensionable age, the divisor used for the purposes of sub-paragraph (1)(c) above shall be whichever is the smaller of the alternative numbers referred to below (instead of the number of relevant years).
(6) The first alternative number is the number of tax years which begin after 5th April 1978 and end before the date when the deceased spouse or civil partner dies.
(7) The second alternative number is the number of tax years in the period—
(a) beginning with the tax year in which the deceased spouse or civil partner attained the age of 16 or, if later, 1978-79; and
(b) ending immediately before the tax year in which the deceased spouse or civil partner would have attained pensionable age if he had not died earlier.
(8) In this paragraph “relevant year” has the same meaning as in section 44 above.
Part II Surplus earnings factor
2 (1) This Part of this Schedule applies if for the tax year concerned there is a surplus in the pensioner’s earnings factor.
(2) The amount for the year is to be found as follows—
(a) calculate the part of the surplus for that year falling into each of the bands specified in the appropriate table below;
(b) multiply the amount of each such part in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c) multiply each amount found under paragraph (b) above by the percentage specified in the appropriate table in relation to the appropriate band;
(d) add together the amounts calculated under paragraph (c) above.
(3) The appropriate table for persons attaining pensionable age after the end of the first appointed year but before 6th April 2009 is as follows—
Table 1
Amount of surplus | Percentage
Band 1. | Not exceeding LET | 40 + 2N
Band 2. | Exceeding LET but not exceeding 3LET - 2QEF | 10 + N/2
Band 3. | Exceeding 3LET - 2QEF | 20 + N
(4) The appropriate table for persons attaining pensionable age on or after 6th April 2009 where the tax year concerned falls before 2010-11 is as follows—
Table 2
Amount of surplus | Percentage
Band 1. | Not exceeding LET | 40
Band 2. | Exceeding LET but not exceeding 3LET - 2QEF | 10
Band 3. | Exceeding 3LET - 2QEF | 20
(4A) The appropriate table for persons attaining pensionable age on or after 6th April 2009 where the tax year concerned is 2010-11 or a subsequent tax year is as follows—
TABLE 2A
Amount of surplus | Percentage
Band 1 | Not exceeding LET | 40
Band 2 | Exceeding LET ... | 10
(5) Regulations may provide, in relation to persons attaining pensionable age after such date as may be prescribed, that the amount found under this Part of this Schedule for the second appointed year or any subsequent tax year is to be calculated using only so much of the surplus in the pensioner’s earnings factor for that year as falls into Band 1 in the table in sub-paragraph (4) above.
(6) For the purposes of the tables in this paragraph—
(a) the value of N is 0.5 for each tax year by which the tax year in which the pensioner attained pensionable age precedes 2009-10;
(b) “LET” means the low earnings threshold for that year as specified in section 44A above;
(c) “QEF” means the qualifying earnings factor for the tax year concerned.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7) In the calculation of “2QEF” the amount produced by doubling QEF shall be rounded to the nearest whole £100 (taking any amount of £50 as nearest to the previous whole £100).
(8) In this paragraph “final relevant year” has the same meaning as in section 44 above.
Part III Contracted-out employment etc
Introduction
3 (1) This Part of this Schedule applies if the following condition is satisfied in relation to each tax week in the tax year concerned.
(2) The condition is that any earnings paid to or for the benefit of the pensioner in the tax week in respect of employment were in respect of employment qualifying him for a pension provided by a salary related contracted-out scheme or by a money purchase contracted-out scheme or by an appropriate personal pension scheme.
(3) If the condition is satisfied in relation to one or more tax weeks in the tax year concerned, Part II of this Schedule does not apply in relation to the year.
The amount
4 The amount for the year is amount C where—
(a) amount C is equal to amount A minus amount B, and
(b) amounts A and B are calculated as follows.
Amount A
5 (1) Amount A is to be calculated as follows.
(2) If there is an assumed surplus in the pensioner’s earnings factor for the year—
(a) calculate the part of the surplus for that year falling into each of the bands specified in the appropriate table below;
(b) multiply the amount of each such part in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c) multiply each amount found under paragraph (b) above by the percentage specified in the appropriate table in relation to the appropriate band;
(d) add together the amounts calculated under paragraph (c) above.
(3) The appropriate table for persons attaining pensionable age after the end of the first appointed year but before 6th April 2009 is as follows—
Table 3
Amount of surplus | Percentage
Band 1. | Not exceeding LET | 40 + 2N
Band 2. | Exceeding LET but not exceeding 3LET - 2QEF | 10 + N/2
Band 3. | Exceeding 3LET - 2QEF | 20 + N
(4) The appropriate table for persons attaining pensionable age on or after 6th April 2009 where the tax year concerned falls before 2010-11 is as follows—
Table 4
Amount of surplus | Percentage
Band 1. | Not exceeding LET | 40
Band 2. | Exceeding LET but not exceeding 3LET - 2QEF | 10
Band 3. | Exceeding 3LET - 2QEF | 20
(4A) The appropriate table for persons attaining pensionable age on or after 6th April 2009 where the tax year concerned is 2010-11 or a subsequent tax year is as follows—
Table 4A
Amount of surplus | Percentage
Band 1 | Not exceeding LET | 40
Band 2 | Exceeding LET ... | 10
Amount B (first case)
6 (1) Amount B is to be calculated in accordance with this paragraph if the pensioner’s employment was entirely employment qualifying him for a pension provided by a salary related contracted-out scheme or by a money purchase contracted-out scheme.
(2) If there is an assumed surplus in the pensioner’s earnings factor for the year—
(a) multiply the amount of the assumed surplus in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(b) multiply the amount found under paragraph (a) above by the percentage specified in sub-paragraph (3) below.
(3) The percentage is—
(a) 20 + N if the person attained pensionable age after the end of the first appointed year but before 6th April 2009;
(b) 20 if the person attained pensionable age on or after 6th April 2009.
Amount B (second case)
7 (1) Amount B is to be calculated in accordance with this paragraph if the pensioner’s employment was entirely employment qualifying him for a pension provided by an appropriate personal pension scheme.
(2) If there is an assumed surplus in the pensioner’s earnings factor for the year—
(a) calculate the part of the surplus for that year falling into each of the bands specified in the appropriate table below;
(b) multiply the amount of each such part in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c) multiply each amount found under paragraph (b) above by the percentage specified in the appropriate table in relation to the appropriate band;
(d) add together the amounts calculated under paragraph (c) above.
(3) The appropriate table for persons attaining pensionable age after the end of the first appointed year but before 6th April 2009 is as follows—
Table 5
Amount of surplus | Percentage
Band 1. | Not exceeding LET | 40 + 2N
Band 2. | Exceeding LET but not exceeding 3LET - 2QEF | 10 + N/2
Band 3. | Exceeding 3LET - 2QEF | 20 + N
(4) The appropriate table for persons attaining pensionable age on or after 6th April 2009 where the tax year concerned falls before 2010-11 is as follows—
Table 6
Amount of surplus | Percentage
Band 1. | Not exceeding LET | 40
Band 2. | Exceeding LET but not exceeding 3LET - 2QEF | 10
Band 3. | Exceeding 3LET - 2QEF | 20
(4A) The appropriate table for persons attaining pensionable age on or after 6th April 2009 where the tax year concerned is 2010-11 or a subsequent tax year is as follows—
Table 6A
Amount of surplus | Percentage
Band 1 | Not exceeding LET | 40
Band 2 | Exceeding LET ... | 10
Interpretation
8 (1) In this Part of this Schedule “salary related contracted-out scheme”, “money purchase contracted-out scheme” and “appropriate personal pension scheme” have the same meanings as in the Pension Schemes Act 1993.
(2) For the purposes of this Part of this Schedule the assumed surplus in the pensioner’s earnings factor for the year is the surplus there would be in that factor for the year if section 48A(1) of the Pension Schemes Act 1993 (no primary Class 1 contributions deemed to be paid) did not apply in relation to any tax week falling in the year.
(3) Section 44A above shall be ignored in applying section 44(6) above for the purpose of calculating amount B.
(4) For the purposes of this Part of this Schedule—
(a) the value of N is 0.5 for each tax year by which the tax year in which the pensioner attained pensionable age precedes 2009-10;
(b) “LET” means the low earnings threshold for that year as specified in section 44A above;
(c) “QEF” is the qualifying earnings factor for the tax year concerned.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) In the calculation of “2QEF” the amount produced by doubling QEF shall be rounded to the nearest whole £100 (taking any amount of £50 as nearest to the previous whole £100).
(6) In this Part of this Schedule “final relevant year” has the same meaning as in section 44 above.
Part IV Other cases
9 The Secretary of State may make regulations containing provisions for finding the amount for a tax year in—
(a) cases where the circumstances relating to the pensioner change in the course of the year;
(b) such other cases as the Secretary of State thinks fit.
SCHEDULE 4B Additional pension: accrual rates for purposes of section 45(2)(d)
Section 45
Part 1 Amount for purposes of section 45(2)(d)
1 (1) The amount referred to in section 45(2)(d) is to be calculated as follows—
(a) calculate the appropriate amount for each of the relevant years within section 45(2)(d) to which Part 2 of this Schedule applies;
(b) calculate the appropriate amount for each of the relevant years within section 45(2)(d) to which Part 3 of this Schedule applies; and
(c) add those amounts together.
(2) But if the resulting amount is a negative one, the amount referred to in section 45(2)(d) is nil.
Part 2 Normal rules: employment not contracted-out
Application
2 This Part applies to a relevant year if—
(a) the contracted-out condition is not satisfied in respect of any tax week in the year; and
(b) there is a surplus in the pensioner's earnings factor for the year.
Appropriate amount for year
3 The appropriate amount for the year for the purposes of paragraph 1 is either—
(a) the flat rate amount for the year (if the pensioner's earnings factor for the year does not exceed the LET), or
(b) the sum of the flat rate amount and the earnings-related amount for the year (if that earnings factor exceeds the LET).
4 (1) Where the final relevant year is 2015-16 or an earlier tax year, the flat rate amount for the year is calculated by multiplying the FRAA in accordance with the last order under section 148AA of the Administration Act to come into force before the end of the final relevant year.
(2) Otherwise, the flat rate amount is calculated by increasing the FRAA by the percentage by which earnings factors for 2015-16 are directed to be increased by the last order under section 148 of the Administration Act to come into force before the end of the final relevant year.
5 The earnings-related amount for the year is calculated as follows—
(a) take the part of the earnings factor for the year which exceeds the LET ...;
(b) multiply that amount in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c) multiply the amount found under paragraph (b) by 10%;
(d) divide the amount found under paragraph (c) by 44.
Part 3 Contracted-out employment
Application
6 This Part applies to a relevant year if —
(a) the contracted-out condition is satisfied in respect of each tax week in the year; and
(b) there would be a surplus in the pensioner's earnings factor for the year if section 48A of the Pension Schemes Act 1993 did not apply in relation to any tax week falling in the year.
Appropriate amount for year
7 The appropriate amount for the year for the purposes of paragraph 1 is calculated as follows—
(a) calculate amounts A and B in accordance with paragraphs 8 to 10;
(b) subtract amount B from amount A.
Amount A: assumed earnings factor not exceeding LET
8 (1) Amount A is calculated in accordance with this paragraph if the pensioner's assumed earnings factor for the year does not exceed the LET.
(2) In such a case, amount A is the flat rate amount for the year.
(3) Where the final relevant year is 2015-16 or an earlier tax year, the flat rate amount for the year is calculated by multiplying the FRAA in accordance with the last order under section 148AA of the Administration Act to come into force before the end of the final relevant year.
(4) Otherwise, the flat rate amount is calculated by increasing the FRAA by the percentage by which earnings factors for 2015-16 are directed to be increased by the last order under section 148 of the Administration Act to come into force before the end of the final relevant year.
Amount A: assumed earnings factor exceeding LET
9 (1) Amount A is calculated in accordance with this paragraph if the pensioner's assumed earnings factor for the year exceeds the LET.
(2) In such a case, amount A is calculated as follows—
(a) take the part of the assumed earnings factor for the year which exceeds the LET ...;
(b) multiply that amount in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c) multiply the amount found under paragraph (b) by 10%;
(d) divide the amount found under paragraph (c) by 44;
(e) add the amount found under paragraph (d) to the flat rate amount for the year.
(3) Where the final relevant year is 2015-16 or an earlier tax year, the flat rate amount for the year is calculated by multiplying the FRAA in accordance with the last order under section 148AA of the Administration Act to come into force before the end of the final relevant year.
(4) Otherwise, the flat rate amount is calculated by increasing the FRAA by the percentage by which earnings factors for 2015-16 are directed to be increased by the last order under section 148 of the Administration Act to come into force before the end of the final relevant year.
Amount B
10 (1) Amount B is calculated as follows—
(a) take the part of the pensioner's assumed earnings factor for the year which exceeds the QEF ...;
(b) multiply that amount in accordance with the last order under section 148 of the Administration Act to come into force before the end of the final relevant year;
(c) multiply the amount found under paragraph (b) by 20%;
(d) divide the amount found under paragraph (c) by the number of relevant years in the pensioner's working life.
(2) Section 44B is to be ignored in applying section 44(6) for the purposes of this paragraph.
Part 4 Other cases
11 The Secretary of State may make regulations containing provision for finding for a tax year the amount referred to in section 45(2)(d)—
(a) in cases where the circumstances relating to the pensioner change in the course of the year, and
(b) in such other cases as the Secretary of State thinks fit.
Part 5 Interpretation
12 In this Schedule—
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“the contracted-out condition”, in relation to a tax week, means the condition that any earnings paid to or for the benefit of the pensioner in that week in respect of employment were in respect of employment qualifying him for a pension provided by a salary related contracted-out scheme (within the meaning of the Pension Schemes Act 1993);
“the FRAA” has the meaning given by paragraph 13;
“the LET”, in relation to a tax year, means the low earnings threshold for the year as specified in section 44A above;
“the QEF”, in relation to a tax year, means the qualifying earnings factor for the year;
“the pensioner's assumed earnings factor”, in relation to a year, means the earnings factor that the pensioner would have for the year if section 48A(1) of the Pension Schemes Act 1993 did not apply in relation to any tax week falling in the year;
“relevant year” and “final relevant year” have the same meanings as in section 44 above;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13 (1) “The FRAA” means the flat rate accrual amount.
(2) Where the final relevant year is 2015-16 or an earlier tax year, that amount is £72.80 for the flat rate introduction year and subsequent tax years (but subject to section 148AA of the Administration Act).
(3) Otherwise, that amount is £93.60 for the flat rate introduction year and subsequent tax years.
SCHEDULE 5 PENSION INCREASE OR LUMP SUM WHERE ENTITLEMENT TO RETIREMENT PENSION IS DEFERRED
Section 55.
Choice between increase of pension and lump sum where pensioner’s entitlement is deferred
A1 (1) Where a person’s entitlement to a Category A or Category B retirement pension is deferred and the period of deferment is at least 12 months, the person shall, on claiming his pension or within a prescribed period after claiming it, elect in the prescribed manner either—
(a) that paragraph 1 (entitlement to increase of pension) is to apply in relation to the period of deferment, or
(b) that paragraph 3A (entitlement to lump sum) is to apply in relation to the period of deferment.
(2) If no election under sub-paragraph (1) is made within the period prescribed under that sub-paragraph, the person is to be treated as having made an election under sub-paragraph (1)(b).
(3) Regulations—
(a) may enable a person who has made an election under sub-paragraph (1) (including one that the person is treated by sub-paragraph (2) as having made) to change the election within a prescribed period and in a prescribed manner, if prescribed conditions are satisfied, and
(b) if they enable a person to make an election under sub-paragraph (1)(b) in respect of a period of deferment after receiving any increase of pension under paragraph 1 by reference to that period, may for the purpose of avoiding duplication of payment—
(i) enable an amount determined in accordance with the regulations to be recovered from the person in a prescribed manner and within a prescribed period, or
(ii) provide for an amount determined in accordance with the regulations to be treated as having been paid on account of the amount to which the person is entitled under paragraph 3A.
(4) Where the Category A or Category B retirement pension includes any increase under paragraphs 5 to 6A, no election under sub-paragraph (1) applies to so much of the pension as consists of that increase (an entitlement to an increase of pension in respect of such an increase after a period of deferment being conferred either by paragraphs 1 and 2 or by paragraph 2A).
Increase of pension where pensioner’s entitlement is deferred
1 (1) This paragraph applies where a person’s entitlement to a Category A or Category B retirement pension is deferred and one of the following conditions is met—
(a) the period of deferment is less than 12 months, or
(b) the person has made an election under paragraph A1(1)(a) in relation to the period of deferment.
(2) The rate of the person’s Category A or Category B retirement pension shall be increased by an amount equal to the aggregate of the increments to which he is entitled under paragraph 2, but only if that amount is enough to increase the rate of the pension by at least 1 per cent.
2 (1) Subject to paragraph 3 below, a person is entitled to an increment under this paragraph for each complete incremental period in his period of deferment.
(2) In this Schedule—
“incremental period” means any period of six days which are treated by regulations as days of increment for the purposes of this Schedule in relation to the person and the pension in question; ...
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) Subject to paragraph 3 below, the amount of the increment for any such incremental period shall be 1/5th per cent of the weekly rate of the Category A or Category B retirement pension to which that person would have been entitled for the period if his entitlement had not been deferred.
(4) Where an amount is required to be calculated in accordance with the provisions of sub-paragraph (3) above—
(a) the amount so calculated shall be rounded to the nearest penny, taking any 1/2p as nearest to the next whole penny above; and
(b) where the amount so calculated would, apart from this sub-paragraph, be a sum less than 1/2p, that amount shall be taken to be zero, notwithstanding any other provision of this Act, the Pensions Act or the Administration Act.
(5) For the purposes of sub-paragraph (3) above the weekly rate of pension for any period shall be taken—
(a) to include any increase under section 47(1) above and any increase under paragraph 4, 5, 5A, 6 or 6A below, but
(b) not to include any increase under section ... 83A or 85 above or any graduated retirement benefit.
(6) The reference in sub-paragraph (5) above to any increase under subsection (1) of section 47 above shall be taken as a reference to any increase that would take place under that subsection if subsection (2) of that section and section 46(5) of the Pensions Act were disregarded.
(7) Where one or more orders have come into force under section 150 or 150A of the Administration Act during the period of deferment, the rate for any incremental period shall be determined as if the order or orders had come into force before the beginning of the period of deferment.
(8) Where a pensioner’s rights premium is paid in respect of a person who is, or if his entitlement had not been deferred would be, entitled to a Category A or Category B retirement pension, then, in calculating any increment under this paragraph which falls to be paid to him in respect of such a pension after the date on which the premium is paid there shall be disregarded any guaranteed minimum pension to which the pensioner was entitled in connection with the employment to which the premium relates.
2A (1) This paragraph applies where—
(a) a person’s entitlement to a Category A or Category B retirement pension is deferred,
(b) the pension includes an increase under paragraphs 5 to 6A, and
(c) the person has made (or is treated as having made) an election under paragraph A1(1)(b) in relation to the period of deferment.
(2) The rate of the person’s Category A or Category B retirement pension shall be increased by an amount equal to the aggregate of the increments to which he is entitled under sub-paragraph (3).
(3) For each complete incremental period in the person’s period of deferment, the amount of the increment shall be 1/5th per cent. of the weekly rate of the increase to which the person would have been entitled under paragraphs 5 to 6A for the period if his entitlement to the Category A or Category B retirement pension had not been deferred.
3 (1) Regulations may provide that sub-paragraphs (1) to (3) of paragraph 2 above shall have effect with such additions, omissions and amendments as are prescribed in relation to a person during whose period of deferment there has been a change, other than a change made by such an order as is mentioned in sub-paragraph (7) of that paragraph, in the rate of the Category A or Category B retirement pension to which he would have been entitled if his entitlement to the pension had commenced on attaining pensionable age.
(2) Any regulations under this paragraph may make such consequential additions, omissions and amendments in paragraph 8(3) below as the Secretary of State considers are appropriate in consequence of any changes made by virtue of this paragraph in paragraph 2 above.
Lump sum where pensioner’s entitlement is deferred
3A (1) This paragraph applies where—
(a) a person’s entitlement to a Category A or Category B retirement pension is deferred, and
(b) the person has made (or is treated as having made) an election under paragraph A1(1)(b) in relation to the period of deferment.
(2) The person is entitled to an amount calculated in accordance with paragraph 3B (a “lump sum”).
Calculation of lump sum
3B (1) The lump sum is the accrued amount for the last accrual period beginning during the period of deferment.
(2) In this paragraph—
‘accrued amount’ means the amount calculated in accordance with sub-paragraph (3);
‘accrual period’ means any period of seven days beginning with a prescribed day of the week, where that day falls within the period of deferment.
(3) The accrued amount for an accrual period for a person is—
(A+P)×(1+R100)52
where—
A is the accrued amount for the previous accrual period (or, in the case of the first accrual period beginning during the period of deferment, zero);
P is the amount of the Category A or Category B retirement pension to which the person would have been entitled for the accrual period if his entitlement had not been deferred;
R is—
a percentage rate two per cent. higher than the Bank of England base rate, or
if regulations so provide, such higher rate as may be prescribed.
(4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect—
(a) at the beginning of the accrual period immediately following the accrual period during which the change took effect, or
(b) if regulations so provide, at such other time as may be prescribed.
(5) For the purposes of the calculation of the lump sum, the amount of Category A or Category B retirement pension to which the person would have been entitled for an accrual period—
(a) includes any increase under section 47(1) and any increase under paragraph 4 of this Schedule, but
(b) does not include—
(i) any increase under section 83A or 85 or paragraphs 5 to 6A of this Schedule,
(ii) any graduated retirement benefit, or
(iii) in prescribed circumstances, such other amount of Category A or Category B retirement pension as may be prescribed.
(6) The reference in sub-paragraph (5)(a) to any increase under subsection (1) of section 47 shall be taken as a reference to any increase that would take place under that subsection if subsection (2) of that section and section 46(5) of the Pensions Act were disregarded.
Choice between increase of pension and lump sum where pensioner’s deceased spouse or civil partner has deferred entitlement
3C (1) Subject to paragraph 8, this paragraph applies where—
(a) a widow, widower or surviving civil partner (“W”) is entitled to a Category A or Category B retirement pension,
(b) W was married to or was the civil partner of the other party to the marriage or civil partnership (“S”) when S died,
(c) S’s entitlement to a Category A or Category B retirement pension was deferred when S died, and
(d) S’s entitlement had been deferred throughout the period of 12 months ending with the day before S’s death.
(2) W shall within the prescribed period elect in the prescribed manner either—
(a) that paragraph 4 (entitlement to increase of pension) is to apply in relation to S’s period of deferment, or
(b) that paragraph 7A (entitlement to lump sum) is to apply in relation to S’s period of deferment.
(3) If no election under sub-paragraph (2) is made within the period prescribed under that sub-paragraph, W is to be treated as having made an election under sub-paragraph (2)(b).
(4) Regulations—
(a) may enable a person who has made an election under sub-paragraph (2) (including one that the person is treated by sub-paragraph (3) as having made) to change the election within a prescribed period and in a prescribed manner, if prescribed conditions are satisfied, and
(b) if they enable a person to make an election under sub-paragraph (2)(b) in respect of a period of deferment after receiving any increase of pension under paragraph 4 by reference to that period, may for the purpose of avoiding duplication of payment—
(i) enable an amount determined in accordance with the regulations to be recovered from the person in a prescribed manner and within a prescribed period, or
(ii) provide for an amount determined in accordance with the regulations to be treated as having been paid on account of the amount to which the person is entitled under paragraph 7A.
(5) The making of an election under sub-paragraph (2)(b) does not affect the application of paragraphs 5 to 6A (which relate to an increase in pension where the pensioner’s deceased spouse or civil partner had deferred an entitlement to a guaranteed minimum pension).
Increase of pension where pensioner’s deceased spouse or civil partner has deferred entitlement
4 (1) Subject to paragraph 8, this paragraph applies where a widow, widower or surviving civil partner (“W”) is entitled to a Category A or Category B retirement pension and was married to or was the civil partner of the other party to the marriage or civil partnership (“S”) when S died and one of the following conditions is met—
(a) S was entitled to a Category A or Category B retirement pension with an increase under this Schedule,
(b) W is a widow, widower or surviving civil partner to whom paragraph 3C applies and has made an election under paragraph 3C(2)(a), or
(c) paragraph 3C would apply to W but for the fact that the condition in sub-paragraph (1)(d) of that paragraph is not met.
(1A) Subject to sub-paragraph (3), the rate of W’s pension shall be increased—
(a) in a case falling within sub-paragraph (1)(a), by an amount equal to the increase to which S was entitled under this Schedule, apart from paragraphs 5 to 6A ... ,
(b) in a case falling within sub-paragraph (1)(b), by an amount equal to the increase to which S would have been entitled under this Schedule, apart from paragraphs 5 to 6A ... , if the period of deferment had ended immediately before S’s death and S had then made an election under paragraph A1(1)(a), or
(c) in a case falling within sub-paragraph (1)(c), by an amount equal to the increase to which S would have been entitled under this Schedule, apart from paragraphs 5 to 6A ... , if the period of deferment had ended immediately before S’s death.
(3) If a married person dies after 5th October 2002 or a civil partner dies on or after 5th December 2005, the rate of the retirement pension for that person’s widow, widower or surviving civil partner shall be increased by an amount equivalent to the sum of—
(a) the increase in the basic pension to which the deceased spouse or civil partner was entitled; and
(b) one-half of the increase in the additional pension.
(4) In any case where—
(a) there is a period between the death of the former spouse or civil partner and the date on which the surviving spouse or civil partner becomes entitled to a Category A or Category B retirement pension, and
(b) one or more orders have come into force under section 150 of the Administration Act during that period,
the amount of the increase to which the surviving spouse or civil partner is entitled under this paragraph shall be determined as if the order or orders had come into force before the beginning of that period.
(5) This paragraph does not apply in any case where the deceased spouse died before 6th April 1979 and the widow or widower attained pensionable age before that date.
5 (1) Where—
(a) a widow, widower or surviving civil partner (call that person “W”) is entitled to a Category A or Category B retirement pension and was married to or was the civil partner of the other party to the marriage or civil partnership (call that person “S”) when S died, and
(b) S either—
(i) was entitled to a guaranteed minimum pension with an increase under section 15(1) of the Pensions Act, or
(ii) would have been so entitled if S had retired on the date of S’s death,
the rate of W’s pension shall be increased by the following amount.
(2) The amount is—
(a) where W is a woman—
(i) whose deceased spouse was a man, or
(ii) who falls within paragraph 7(3) below,
an amount equal to the sum of the amounts set out in paragraph 5A(2) or (3) below (as the case may be),
(b) where W is a man whose deceased spouse was a woman, an amount equal to the sum of the amounts set out in paragraph 6(2), (3) or (4) below (as the case may be) , and
(c) where W is—
(i) a woman who does not fall within paragraph 7(3) below and whose deceased spouse was a woman;
(ii) a man whose deceased spouse was a man; or
(iii) a surviving civil partner,
an amount equal to the sum of the amounts set out in paragraph (6A)(2) below.
5A (1) This paragraph applies where W (referred to in paragraph 5 above) is a woman—
(a) whose deceased spouse was a man, or
(b) who falls within paragraph 7(3) below.
(2) Where the spouse dies before 6th October 2002, the amounts referred to in paragraph 5(2)(a) above are the following—
(a) an amount equal to one-half of the increase mentioned in paragraph 5(1)(b) above,
(b) the appropriate amount, and
(c) an amount equal to any increase to which the spouse had been entitled under paragraph 5 above.
(3) Where the spouse dies after 5th October 2002, the amounts referred to in paragraph 5(2)(a) above are the following—
(a) one-half of the appropriate amount ... , and
(b) one-half of any increase to which the spouse had been entitled under paragraph 5 above.
6 (1) This paragraph applies where W (referred to in paragraph 5 above) is a man whose deceased spouse was a woman.
(2) Where the wife dies before 6th April 1989, the amounts referred to in paragraph 5(2)(b) above are the following—
(a) an amount equal to the increase mentioned in paragraph 5(1)(b) above,
(b) the appropriate amount, and
(c) an amount equal to any increase to which the wife had been entitled under paragraph 5 above.
(3) Where the wife dies after 5th April 1989 but before 6th October 2002, the amounts referred to in paragraph 5(2)(b) above are the following—
(a) the increase mentioned in paragraph 5(1)(b) above, so far as attributable to employment before 6th April 1988,
(b) one-half of that increase, so far as attributable to employment after 5th April 1988,
(c) the appropriate amount reduced by the amount of any increases under section 109 of the Pensions Act, and
(d) any increase to which the wife had been entitled under paragraph 5 above.
(4) Where the wife dies after 5th October 2002, the amounts referred to in paragraph 5(2)(b) above are the following—
(a) one-half of the increase mentioned in paragraph 5(1)(b) above, so far as attributable to employment before 6th April 1988,
(b) one-half of the appropriate amount ... , and
(c) one-half of any increase to which the wife had been entitled under paragraph 5 above
6A. (1) This paragraph applies where W (referred to in paragraph 5 above) is—
(a) a woman who does not fall within paragraph 7(3) below and whose deceased spouse was a woman;
(b) a man whose deceased spouse was a man; or
(c) a surviving civil partner.
(2) The amounts referred to in paragraph 5(2)(c) above are the following—
(a) one-half of the increase mentioned in paragraph 5(1)(b) above, so far as attributable to employment before 6th April 1988,
(b) one-half of the appropriate amount ... , and
(c) one-half of any increase to which the deceased spouse or civil partner had been entitled under paragraph 5 above.
7 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) Where an amount is required to be calculated in accordance with the provisions of paragraph 5, 5A, 6 or 6A or sub-paragraph (1) above—
(a) the amount so calculated shall be rounded to the nearest penny, taking any 1/2p as nearest to the next whole penny above; and
(b) where the amount so calculated would, apart from this sub-paragraph, be a sum less than 1/2p, that amount shall be taken to be zero, notwithstanding any other provision of this Act, the Pensions Act or the Administration Act.
(3) For the purposes of paragraphs 5, 5A and 6A above, a woman falls within this sub-paragraph if—
(a) she was married to another woman who, at the time of her death, was a woman by virtue of a full gender recognition certificate having been issued under the Gender Recognition Act 2004, and
(b) that marriage subsisted before the time when that certificate was issued.
7ZA (1) This paragraph modifies paragraphs 5A to 6A in cases where—
(a) W became entitled to a Category A or Category B retirement pension before 6 April 2012, and
(b) S died before 6 April 2012.
(“W” and “S” have the same meaning as in paragraph 5.)
(2) Paragraph 5A applies as if—
(a) in sub-paragraph (2), after paragraph (a), there were inserted—
(b) the appropriate amount; and
;
(b) in sub-paragraph (3), after “following—”, there were inserted—
(a) one half of the appropriate amount; and
.
(3) Paragraph 6 applies as if—
(a) in sub-paragraph (2), after paragraph (a), there were inserted—
(b) the appropriate amount; and
;
(b) in sub-paragraph (3), after paragraph (b), there were inserted—
(c) the appropriate amount reduced by the amount of any increases under section 109 of the Pensions Act; and
;
(c) in sub-paragraph (4), after paragraph (a), there were inserted—
(b) one half of the appropriate amount; and
.
(4) Paragraph 6A applies as if in sub-paragraph (2), after paragraph (a), there were inserted—
(b) one half of the appropriate amount; and
.
(5) In paragraphs 5A to 6A as modified by this paragraph, the “appropriate amount” means the greater of—
(a) the amount by which the deceased person's Category A or Category B retirement pension had been increased under section 150(1)(e) of the Administration Act; or
(b) the amount by which his or her Category A or Category B retirement pension would have been so increased had he or she died immediately before the surviving spouse or civil partner became entitled to a Category A or Category B retirement pension.
(6) In sub-paragraph (1)(a) the reference to becoming entitled to a pension before 6 April 2012 includes a reference to becoming entitled on or after that day to the payment of a pension in respect of a period before that day.
Entitlement to lump sum where pensioner’s deceased spouse or civil partner has deferred entitlement
7A (1) This paragraph applies where a person to whom paragraph 3C applies (“W”) has made (or is treated as having made) an election under paragraph 3C(2)(b).
(2) W is entitled to an amount calculated in accordance with paragraph 7B (a “widowed person’s or surviving civil partner's lump sum”).
Calculation of widowed person’s or surviving civil partner's lump sum
7B (1) The widowed person’s or surviving civil partner's lump sum is the accrued amount for the last accrual period beginning during the period which—
(a) began at the beginning of S’s period of deferment, and
(b) ended on the day before S’s death.
(2) In this paragraph—
‘S’ means the other party to the marriage or civil partnership;
‘accrued amount’ means the amount calculated in accordance with sub-paragraph (3);
‘accrual period’ means any period of seven days beginning with a prescribed day of the week, where that day falls within S’s period of deferment.
(3) The accrued amount for an accrual period for W is—
(A+P)×(1+R100)52
where—
A is the accrued amount for the previous accrual period (or, in the case of the first accrual period beginning during the period mentioned in sub-paragraph (1), zero);
P is—
the basic pension, and
half of the additional pension,
to which S would have been entitled for the accrual period if his entitlement had not been deferred during the period mentioned in sub-paragraph (1);
R is—
a percentage rate two per cent. higher than the Bank of England base rate, or
if regulations so provide, such higher rate as may be prescribed.
(4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect—
(a) at the beginning of the accrual period immediately following the accrual period during which the change took effect, or
(b) if regulations so provide, at such other time as may be prescribed.
(5) For the purposes of the calculation of the widowed person’s or surviving civil partner's lump sum, the amount of Category A or Category B retirement pension to which S would have been entitled for an accrual period—
(a) includes any increase under section 47(1) and any increase under paragraph 4 of this Schedule, but
(b) does not include—
(i) any increase under section 83A or 85 or paragraphs 5 to 6A of this Schedule ... ,
(ii) any graduated retirement benefit, or
(iii) in prescribed circumstances, such other amount of Category A or Category B retirement pension as may be prescribed.
(6) The reference in sub-paragraph (5)(a) to any increase under subsection (1) of section 47 shall be taken as a reference to any increase that would take place under that subsection if subsection (2) of that section and section 46(5) of the Pensions Act were disregarded.
(7) In any case where—
(a) there is a period between the death of S and the date on which W becomes entitled to a Category A or Category B retirement pension, and
(b) one or more orders have come into force under section 150 of the Administration Act during that period,
the amount of the lump sum shall be increased in accordance with that order or those orders.
Supplementary
7C (1) Any lump sum calculated under paragraph 3B or 7B must be rounded to the nearest penny, taking any 1/2p as nearest to the next whole penny above.
(2) In prescribing a percentage rate for the purposes of paragraphs 3B and 7B, the Secretary of State must have regard to—
(a) the national economic situation, and
(b) any other matters which he considers relevant.
Married couples and civil partners
8 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) The conditions in paragraph 3C(1)(c) and 4(1)(a) are not satisfied by a Category B retirement pension to which S was or would have been entitled by virtue of W’s contributions.
(5) Where the Category A retirement pension to which S was or would have been entitled includes an increase under section 51A(2) attributable to W’s contributions, the increase or lump sum to which W is entitled under paragraph 4(1A) or 7A(2) is to be calculated as if there had been no increase under that section.
(6) In sub-paragraphs (4) and (5), “W” and “S” have the same meaning as in paragraph 3C, 4 or 7A, as the case requires.
Uprating
9 The sums which are the increases in the rates of retirement pensions under this Schedule are subject to alteration by order made by the Secretary of State under section 150 of the Administration Act.