Law

Social Security Act 1998

United Kingdom · statute

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In force since 2024-02-21, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 100 provisions

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100 provisions

36 Appropriate officers

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37 The social fund Commissioner and inspectors

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38 Reviews of determinations

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39ZA Certificates

A document bearing a certificate which— is signed by a person authorised in that behalf by the Secretary of State, and states that the document, apart from the certificate, is a record of a decision of an officer of the Secretary of State, shall be conclusive evidence of the decision; and a certificate purporting to be so signed shall be deemed to be so signed unless the contrary is proved.

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39 Interpretation etc. of Chapter II

(1) In this Chapter— “appeal tribunal” means an appeal tribunal constituted under Chapter I of this Part; “claimant”, in relation to a joint-claim couple claiming a joint-claim jobseeker’s allowance (within the meaning of the Jobseekers Act 1995), means the couple or either member of the couple; “Commissioner” (except in the expression “tax appeal Commissioners”) means the Chief Social Security Commissioner or any other Social Security Commissioner, and includes a tribunal of three or more Commissioners constituted under section 16(7) above; “claimant”, in relation to a couple jointly claiming universal credit, means the couple or either member of the couple; “health care professional” means— a registered medical practitioner, a registered nurse, an occupational therapist or physiotherapist registered with a regulatory body established by an Order in Council under section 60 of the Health Act 1999, or a member of such other profession regulated by a body mentioned in section 25(3) of the National Health Service Reform and Health Care Professions Act 2002 as the Secretary of State may prescribe; “relevant benefit” has the meaning given by section 8(3) above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1A) In this Chapter— (a) a reference to a benefit includes a reference to a loan under section 18 of the Welfare Reform and Work Act 2016; (b) a reference to a claim for a benefit includes a reference to an application for a loan under section 18 of the Welfare Reform and Work Act 2016; (c) a reference to a claimant includes a reference to an applicant for a loan under section 18 of the Welfare Reform and Work Act 2016 or, in relation to a couple jointly applying for a loan under that section, a reference to the couple or either member of the couple; (d) a reference to an award of a benefit to a person includes a reference to a decision that a person is eligible for a loan under section 18 of the Welfare Reform and Work Act 2016; (e) a reference to entitlement to a benefit includes a reference to eligibility for a loan under section 18 of the Welfare Reform and Work Act 2016. (2) Expressions used in this Chapter to which a meaning is assigned by section 191 of the Administration Act have that meaning in this Chapter. (3) Part II of the Administration Act, which is superseded by the foregoing provisions of this Chapter, shall cease to have effect.

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40 Child support: revision of decisions

For section 16 of the Child Support Act there shall be substituted the following section— Revision of decisions 16 (1) Any decision of the Secretary of State under section 11, 12 or 17 may be revised by the Secretary of State— (a) either within the prescribed period or in prescribed cases or circumstances; and (b) either on an application made for the purpose or on his own initiative; and regulations may prescribe the procedure by which a decision of the Secretary of State may be so revised. (2) In making a decision under subsection (1), the Secretary of State need not consider any issue that is not raised by the application or, as the case may be, did not cause him to act on his own initiative. (3) Subject to subsections (4) and (5) and section 28ZC, a revision under this section shall take effect as from the date on which the original decision took (or was to take) effect. (4) Regulations may provide that, in prescribed cases or circumstances, a revision under this section shall take effect as from such other date as may be prescribed. (5) Where a decision is revised under this section, for the purpose of any rule as to the time allowed for bringing an appeal, the decision shall be regarded as made on the date on which it is so revised. (6) Except in prescribed circumstances, an appeal against a decision of the Secretary of State shall lapse if the decision is revised under this section before the appeal is determined.

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41 Child support: decisions superseding earlier decisions

For sections 17 to 19 of the Child Support Act there shall be substituted the following section— Decisions superseding earlier decisions 17 (1) Subject to subsection (2), the following, namely— (a) any decision of the Secretary of State under section 11 or 12 or this section, whether as originally made or as revised under section 16; (b) any decision of an appeal tribunal under section 20; and (c) any decision of a Child Support Commissioner on an appeal from such a decision as is mentioned in paragraph (b), may be superseded by a decision made by the Secretary of State, either on an application made for the purpose or on his own initiative. (2) In making a decision under subsection (1), the Secretary of State need not consider any issue that is not raised by the application or, as the case may be, did not cause him to act on his own initiative. (3) Regulations may prescribe the cases and circumstances in which, and the procedure by which, a decision may be made under this section. (4) Subject to subsection (5) and section 28ZC, a decision under this section shall take effect as from the date on which it is made or, where applicable, the date on which the application was made. (5) Regulations may provide that, in prescribed cases or circumstances, a decision under this section shall take effect as from such other date as may be prescribed.

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42 Child support: appeals to appeal tribunals

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43 Child support: decisions and appeals dependent on other cases

After section 28 of the Child Support Act there shall be inserted the following sections— Decisions and appeals dependent on other cases Decisions involving issues that arise on appeal in other cases 28ZA (1) This section applies where— (a) a decision by the Secretary of State falls to be made under section 11, 12, 16 or 17 in relation to a maintenance assessment; and (b) an appeal is pending against a decision given in relation to a different maintenance assessment by a Child Support Commissioner or a court. (2) If the Secretary of State considers it possible that the result of the appeal will be such that, if it were already determined, it would affect the decision in some way— (a) he need not, except in such cases or circumstances as may be prescribed, make the decision while the appeal is pending; (b) he may, in such cases or circumstances as may be prescribed, make the decision on such basis as may be prescribed. (3) Where the Secretary of State acts in accordance with subsection (2)(b), following the determination of the appeal he shall if appropriate revise his decision (under section 16) in accordance with that determination. (4) For the purposes of this section, an appeal against a decision is pending if— (a) an appeal against the decision has been brought but not determined; (b) an application for leave to appeal against the decision has been made but not determined; or (c) in such circumstances as may be prescribed, an appeal against the decision has not been brought (or, as the case may be, an application for leave to appeal against the decision has not been made) but the time for doing so has not yet expired. (5) In paragraphs (a), (b) and (c) of subsection (4), any reference to an appeal, or an application for leave to appeal, against a decision includes a reference to— (a) an application for, or for leave to apply for, judicial review of the decision under section 31 of the Supreme Court Act 1981; or (b) an application to the supervisory jurisdiction of the Court of Session in respect of the decision. Appeals involving issues that arise on appeal in other cases 28ZB (1) This section applies where— (a) an appeal (“appeal A”) in relation to a decision falling within section 20(1) or (3), or an assessment falling within section 20(2), is made to an appeal tribunal, or from an appeal tribunal to a Child Support Commissioner; and (b) an appeal (“appeal B”) is pending against a decision given in a different case by a Child Support Commissioner or a court. (2) If the Secretary of State considers it possible that the result of appeal B will be such that, if it were already determined, it would affect the determination of appeal A, he may serve notice requiring the tribunal or Child Support Commissioner— (a) not to determine appeal A but to refer it to him; or (b) to deal with the appeal in accordance with subsection (4). (3) Where appeal A is referred to the Secretary of State under subsection (2)(a), following the determination of appeal B and in accordance with that determination, he shall if appropriate— (a) in a case where appeal A has not been determined by the tribunal, revise (under section 16) his decision which gave rise to that appeal; or (b) in a case where appeal A has been determined by the tribunal, make a decision (under section 17) superseding the tribunal’s decision. (4) Where appeal A is to be dealt with in accordance with this subsection, the appeal tribunal or Child Support Commissioner shall either— (a) stay appeal A until appeal B is determined; or (b) if the tribunal or Child Support Commissioner considers it to be in the interests of the appellant to do so, determine appeal A as if— (i) appeal B had already been determined; and (ii) the issues arising on appeal B had been decided in the way that was most unfavourable to the appellant. In this subsection “the appellant” means the person who appealed or, as the case may be, first appealed against the decision or assessment mentioned in subsection (1)(a). (5) Where the appeal tribunal or Child Support Commissioner acts in accordance with subsection (4)(b), following the determination of appeal B the Secretary of State shall, if appropriate, make a decision (under section 17) superseding the decision of the tribunal or Child Support Commissioner in accordance with that determination. (6) For the purposes of this section, an appeal against a decision is pending if— (a) an appeal against the decision has been brought but not determined; (b) an application for leave to appeal against the decision has been made but not determined; or (c) in such circumstances as may be prescribed, an appeal against the decision has not been brought (or, as the case may be, an application for leave to appeal against the decision has not been made) but the time for doing so has not yet expired. (7) In this section— (a) the reference in subsection (1)(a) to an appeal to a Child Support Commissioner includes a reference to an application for leave to appeal to a Child Support Commissioner; and (b) any reference in paragraph (a), (b) or (c) of subsection (6) to an appeal, or to an application for leave to appeal, against a decision includes a reference to— (i) an application for, or for leave to apply for, judicial review of the decision under section 31 of the Supreme Court Act 1981; or (ii) an application to the supervisory jurisdiction of the Court of Session in respect of the decision. (8) Regulations may make provision supplementing that made by this section.

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44 Child support: cases of error

After section 28ZB of the Child Support Act there shall be inserted the following sections— Cases of error Restrictions on liability in certain cases of error 28ZC (1) Subject to subsection (2), this section applies where— (a) the effect of the determination, whenever made, of an appeal to a Child Support Commissioner or the court (“the relevant determination”) is that the adjudicating authority’s decision out of which the appeal arose was erroneous in point of law; and (b) after the date of the relevant determination a decision falls to be made by the Secretary of State in accordance with that determination (or would, apart from this section, fall to be so made)— (i) with respect to an application for a maintenance assessment (made after the commencement date); (ii) as to whether to revise, under section 16, a decision (made after the commencement date) with respect to such an assessment; or (iii) on an application under section 17 (made after the commencement date) for a decision with respect to such an assessment to be superseded. (2) This section does not apply where the decision of the Secretary of State mentioned in subsection (1)(b)— (a) is one which, but for section 28ZA(2)(a), would have been made before the date of the relevant determination; or (b) is one made in pursuance of section 28ZB(3) or (5). (3) In so far as the decision relates to a person’s liability in respect of a period before the date of the relevant determination, it shall be made as if the adjudicating authority’s decision had been found by the Commissioner or court not to have been erroneous in point of law. (4) Subsection (1)(a) shall be read as including a case where— (a) the effect of the relevant determination is that part or all of a purported regulation or order is invalid; and (b) the error of law made by the adjudicating authority was to act on the basis that the purported regulation or order (or the part held to be invalid) was valid. (5) It is immaterial for the purposes of subsection (1)— (a) where such a decision as is mentioned in paragraph (b)(i) falls to be made; or (b) where such a decision as is mentioned in paragraph (b)(ii) or (iii) falls to be made on an application under section 16 or (as the case may be) section 17, whether the application was made before or after the date of the relevant determination. (6) In this section— “adjudicating authority” means the Secretary of State, or a child support officer; “the commencement date” means the date of the coming into force of section 44 of the Social Security Act 1998; and “the court” means the High Court, the Court of Appeal, the Court of Session, the High Court or Court of Appeal in Northern Ireland, the House of Lords or the Court of Justice of the European Union. (7) The date of the relevant determination shall, in prescribed cases, be determined for the purposes of this section in accordance with any regulations made for that purpose. (8) Regulations made under subsection (7) may include provision— (a) for a determination of a higher court to be treated as if it had been made on the date of a determination of a lower court or a Child Support Commissioner; or (b) for a determination of a lower court or a Child Support Commissioner to be treated as if it had been made on the date of a determination of a higher court. Correction of errors and setting aside of decisions 28ZD (1) Regulations may make provision with respect to— (a) the correction of accidental errors in any decision or record of a decision given under this Act; and (b) the setting aside of any such decision in a case where it appears just to set the decision aside on the ground that— (i) a document relating to the proceedings in which the decision was given was not sent to, or was not received at an appropriate time by, a party to the proceedings or a party’s representative or was not received at an appropriate time by the body or person who gave the decision; or (ii) a party to the proceedings or a party’s representative was not present at a hearing related to the proceedings. (2) Nothing in subsection (1) shall be construed as derogating from any power to correct errors or set aside decisions which is exercisable apart from regulations made by virtue of that subsection.

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45 Vaccine damage payments: decisions reversing earlier decisions

After section 3 of the Vaccine Damage Payments Act there shall be inserted the following section— Decisions reversing earlier decisions 3A (1) Subject to subsection (2) below, any decision of the Secretary of State under section 3 above or this section, and any decision of an appeal tribunal under section 4 below, may be reversed by a decision made by the Secretary of State— (a) either within the prescribed period or in prescribed cases or circumstances; and (b) either on an application made for the purpose or on his own initiative. (2) In making a decision under subsection (1) above, the Secretary of State need not consider any issue that is not raised by the application or, as the case may be, did not cause him to act on his own initiative. (3) Regulations may prescribe the procedure by which a decision may be made under this section. (4) Such notice as may be prescribed by regulations shall be given of a decision under this section. (5) Except as provided by section 5(4) below, no payment under section 1(1) above shall be recoverable by virtue of a decision under this section. (6) In this section and sections 4 and 8 below “appeal tribunal” means an appeal tribunal constituted under Chapter I of Part I of the Social Security Act 1998.

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46 Vaccine damage payments: appeals to appeal tribunals

For section 4 of the Vaccine Damage Payments Act there shall be substituted the following section— Appeals to appeal tribunals 4 (1) The claimant may appeal to an appeal tribunal against any decision of the Secretary of State under section 3 or 3A above. (2) Regulations may make— (a) provision as to the manner in which, and the time within which, appeals are to be brought; and (b) such provision with respect to proceedings before appeal tribunals as the Secretary of State considers appropriate. (3) The regulations may in particular make any provision of a kind mentioned in Schedule 5 to the Social Security Act 1998. (4) In deciding an appeal under this section, an appeal tribunal shall consider all the circumstances of the case (including any not obtaining at the time when the decision appealed against was made).

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47 Vaccine damage payments: correction of errors etc

After section 7 of the Vaccine Damage Payments Act there shall be inserted the following section— Correction of errors and setting aside of decisions 7A (1) Regulations may make provision with respect to— (a) the correction of accidental errors in any decision or record of a decision under section 3, 3A or 4 of this Act; and (b) the setting aside of any such decision in a case where it appears just to set the decision aside on the ground that— (i) a document relating to the proceedings in which the decision was given was not sent to, or was not received at an appropriate time by, a party to the proceedings or a party’s representative or was not received at an appropriate time by the body or person who gave the decision; or (ii) a party to the proceedings or a party’s representative was not present at a hearing related to the proceedings. (2) Nothing in subsection (1) shall be construed as derogating from any power to correct errors or set aside decisions which is exercisable apart from regulations made by virtue of that subsection.

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48 Apportionment of payments etc. made for more than one earner

After subsection (2) of section 3 of the Contributions and Benefits Act (“earnings” and “earner”) there shall be inserted the following subsection— (2A) Regulations made for the purposes of subsection (2) above may provide that, where a payment is made or a benefit provided to or for the benefit of two or more earners, a proportion (determined in such manner as may be prescribed) of the amount or value of the payment or benefit shall be attributed to each earner.

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49 Payments on account of directors' contributions

After subsection (3) of section 3 of the Contributions and Benefits Act there shall be inserted the following subsections— (4) Subsection (5) below applies to regulations made for the purposes of subsection (2) above which make special provision with respect to the earnings periods of directors and former directors of companies. (5) Regulations to which this subsection applies may make provision— (a) for enabling companies, and directors and former directors of companies, to pay on account of any earnings-related contributions that may become payable by them such amounts as would be payable by way of such contributions if the special provision had not been made; and (b) for requiring any payments made in accordance with the regulations to be treated, for prescribed purposes, as if they were the contributions on account of which they were made.

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50 Payments treated as remuneration and earnings

(1) For subsection (4) of section 4 of the Contributions and Benefits Act (payments treated as remuneration and earnings) there shall be substituted the following subsection— (4) For the purposes of section 3 above there shall be treated as remuneration derived from an employed earner’s employment— (a) any gain on which the earner is chargeable to tax by virtue of section 135 (gains by directors and employees from share options) of the Income and Corporation Taxes Act 1988 (“the 1988 Act”); (b) any sum paid (or treated as paid) to or for the benefit of the earner which is chargeable to tax by virtue of section 313 of the 1988 Act (taxation of consideration for certain restrictive undertakings). (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Subsection (1) above, so far as relating to a sum which is chargeable to tax by virtue of section 313 of the Income and Corporation Taxes Act 1988, shall have effect in relation to any undertaking given on or after 10th July 1997. (4) Regulations under subsection (6) of section 4 of the Contributions and Benefits Act (as inserted by subsection (2) above)— (a) shall not be made before the passing of the Finance Act 1998; but (b) may make provision having effect in relation to acquisitions on or after 6th April 1998.

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51 Class 1 contributions

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52 Class 1A contributions

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53 Class 1B contributions

After section 10 of the Contributions and Benefits Act there shall be inserted the following section— Class 1B contributions Class 1B contributions 10A (1) Where for any tax year a person is accountable to the Inland Revenue in respect of income tax on emoluments of his employees in accordance with a PAYE settlement agreement, a Class 1B contribution shall be payable by him for that tax year in accordance with this section. (2) The Class 1B contribution referred to in subsection (1) above is payable in respect of— (a) the amount of any of the emoluments included in the PAYE settlement agreement which are chargeable emoluments; and (b) the total amount of income tax in respect of which the person is accountable for the tax year in accordance with the PAYE settlement agreement. (3) The amount of the Class 1B contribution referred to in subsection (1) above shall be the Class 1B percentage of the aggregate of the amounts mentioned in paragraphs (a) and (b) of subsection (2) above. (4) Emoluments are chargeable emoluments for the purposes of subsection (2) above if, apart from section 6(2A) or 10(8A) above, the person accountable in accordance with the PAYE settlement agreement would be liable or entitled to pay secondary Class 1 contributions or Class 1A contributions in respect of them. (5) Where— (a) the PAYE settlement agreement was entered into after the beginning of the tax year; and (b) Class 1 contributions were due in respect of any emoluments before it was entered into, those emoluments shall not be taken to be included in the PAYE settlement agreement. (6) For the purposes of subsection (3) above the Class 1B percentage shall be 12.2 per cent, but the percentage is subject to alteration under section 143A of the Administration Act. (7) Regulations may provide for persons to be excepted in prescribed circumstances from liability to pay Class 1B contributions.

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54 Contributions paid in error

After section 19 of the Contributions and Benefits Act there shall be inserted the following section— Class 1, 1A or 1B contributions paid in error 19A (1) This section applies where— (a) payments by way of Class 1, Class 1A or Class 1B contributions are made in respect of earnings paid to or for the benefit of an earner (or in respect of a benefit made available to an earner) in 1998-99 or a subsequent tax year (“year 1”); (b) the payments are made in error, in that the employment from which the earnings are derived (or by reason of which the benefit is made available) is not employed earner’s employment; and (c) the person making the payments has not been notified of the error by the Secretary of State before the end of the tax year following year 1 (“year 2”). (2) After the end of year 2 the earner shall, except in such circumstances as may be prescribed, be treated for all purposes relating to— (a) contributions and contributory benefits; and (b) statutory sick pay and statutory maternity pay, as if the earnings were derived from (or the benefit were made available by reason of) employed earner’s employment.

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55 Recovery of primary Class 1 contributions by secondary contributors

In paragraph 3 of Schedule 1 to the Contributions and Benefits Act (supplementary provisions as to contributions)— (a) in sub-paragraph (3), for the words from “and notwithstanding” to “any enactment” there shall be substituted the words “and, subject to sub-paragraph (4) below but notwithstanding any other provision in any enactment”; (b) after that sub-paragraph there shall be inserted the following sub-paragraphs— (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, earnings in a form other than money (“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; or (b) any non-monetary earnings received by the employee from the employer in the cessation year before the cessation of the employment, which he was unable to recover by deduction from the employee’s earnings.

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56 Contributions returns

(1) In sub-paragraph (3) of paragraph 7 of Schedule 1 to the Contributions and Benefits Act— (a) for the words “is liable to” there shall be substituted the words “has been required to pay”; and (b) for the words “be liable to” there shall be substituted the words “be required to pay”. (2) After that paragraph there shall be inserted the following paragraph— 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 powers of the Inland Revenue to penalise omissions or errors in returns, regulations may provide for the Secretary of State 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 Secretary of State 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 Secretary of State, in his discretion, to mitigate or to remit the penalty, or to stay or to compound any proceedings for it.

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57 Collection of contributions by Secretary of State

After paragraph 7A of Schedule 1 to the Contributions and Benefits Act there shall be inserted the following paragraph— Collection of contributions by Secretary of State 7B (1) Regulations may provide that, in such cases or circumstances as may be prescribed— (a) contributions payable under Part I of this Act shall be paid to the Secretary of State (and not to the Inland Revenue); and (b) the Secretary of State shall be responsible for the collection of such contributions, and generally for the relevant administration. (2) Regulations under this paragraph may, in particular— (a) provide for returns to be made to the Secretary of State 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 Secretary of State 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 Secretary of State may approve; (d) prescribe the due date for the payment of contributions; (e) subject to sub-paragraph (4) below, provide for interest to be charged by the Secretary of State on contributions that are not paid by the due date, and for enabling such interest to be remitted or repaid; (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) Regulations under sub-paragraph (2)(e) above may provide that, in such cases or circumstances as may be prescribed, interest under those regulations may be charged by the Inland Revenue (instead of the Secretary of State) as if the regulations were made by virtue of paragraph 6 above. (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) subject to sub-paragraph (6) below, provide for the penalty to be imposed by the Secretary of State— (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 Secretary of State, in his discretion, to mitigate or to remit the penalty, or to stay or to compound any proceedings for it. (6) Regulations under sub-paragraph (2)(h)(ii) or (iii) above may provide that, in such cases or circumstances as may be prescribed, penalties under those regulations may be imposed by the Inland Revenue (instead of the Secretary of State) as if the return in question were a contributions return within the meaning of paragraph 7 above. (7) Section 12 above shall not apply in relation to Class 2 contributions in respect of which the Secretary of State charges interest or imposes a penalty pursuant to regulations under paragraph (e) or (h) of sub-paragraph (2) above. (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.

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58 Interest and penalties chargeable concurrently with Inland Revenue

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59 Levy of Class 4 contributions with income tax

(1) Schedule 2 to the Contributions and Benefits Act (levy of Class 4 contributions with income tax) and Schedule 2 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland) shall each be amended as follows. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) In paragraph 3, sub-paragraph (1)(b) shall cease to have effect. (4) In sub-paragraph (2) of paragraph 4, for the words “may either be charged” to the end there shall be substituted the words “shall be charged on him separately”. (5) In sub-paragraph (1) of paragraph 6— (a) for the words from “Sections 86” to “fault)” there shall be substituted the words “Section 86 of the Taxes Management Act 1970 (interest on overdue tax)”; (b) for the words “as they apply” there shall be substituted the words “as it applies”. (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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60 Breach of regulations

For section 113 of the Administration Act there shall be substituted the following section— Breach of regulations 113 (1) Regulations and schemes under any of the Acts to which section 110 above applies may provide that any person who contravenes, or fails to comply with, any provision contained in regulations made under that Act— (a) in the case of a provision relating to contributions, shall be liable to a penalty; (b) in any other case, shall be guilty of an offence under that Act. (2) Any regulations or scheme making such provision as is mentioned in subsection (1)(a) above shall— (a) prescribe the amount or rate of penalty, or provide for how it is to be ascertained; (b) provide for the penalty to be imposed by the Secretary of State— (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 Secretary of State, in his discretion, to mitigate or to remit any such penalty, or to stay or to compound any proceedings for a penalty. (3) A person guilty of such an offence as is mentioned in subsection (1)(b) above shall be liable on summary conviction— (a) to a fine not exceeding level 3 on the standard scale; (b) in the case of an offence of continuing a contravention or failure after conviction, to a fine not exceeding £40 for each day on which it is so continued. (4) Any provision contained in regulations which authorises statutory sick pay or statutory maternity pay to be set off against secondary Class 1 contributions is not a provision relating to contributions for the purposes of this section.

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61 Offences and penalties relating to contributions

For section 114 of the Administration Act there shall be substituted the following sections— Offences relating to contributions 114 (1) Any person who is knowingly concerned in the fraudulent evasion of any contributions which he or any other person is liable to pay shall be guilty of an offence. (2) A person guilty of an offence under this section shall be liable— (a) on conviction on indictment, to imprisonment for a term not exceeding seven years or to a fine or to both; (b) on summary conviction, to a fine not exceeding the statutory maximum. Penalties relating to contributions 114A (1) If a person fails to pay, at or within the time prescribed for the purpose, any contribution which he is liable to pay, he shall be liable to a penalty. (2) If a person fails to pay, at or within the time prescribed for the purpose, any sums which he is required by regulations made by virtue of paragraph 6 or 7B of Schedule 1 to the Contributions and Benefits Act to pay, he shall be liable to a penalty under subsection (1) above without proof of his failure so to pay any particular contribution. (3) For the purposes of subsection (1) above, regulations shall— (a) prescribe the amount or rate of penalty, or provide for how it is to be ascertained; (b) provide for the penalty to be imposed by the Secretary of State— (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 Secretary of State, in his discretion, to mitigate or to remit any such penalty, or to stay or to compound any proceedings for a penalty. (4) Subsection (1) above does not apply— (a) to any failure by a person in respect of which he has been convicted of an offence under section 114(1) above; or (b) to Class 4 contributions recoverable by the Inland Revenue.

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62 Evidence of non-payment

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) In subsection (4) of that section, the words “for a particular contribution card or”, and the words “the card in question or”, shall cease to have effect. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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63 Recovery of contributions etc

After section 121 of the Administration Act there shall be inserted the following sections— Recovery of contributions etc. in England and Wales 121A (1) If— (a) a person is served at any time with a copy of a certificate under section 118(1) above; and (b) he neglects or refuses to pay the contributions, interest or penalty to which the certificate relates within 30 days of that time, an authorised officer may distrain upon the goods and chattels of that person (“the person in default”). (2) For the purpose of levying any such distress, a justice of the peace, on being satisfied by information on oath that there is reasonable ground for believing that the conditions in subsection (1) above are fulfilled, may issue a warrant in writing authorising the authorised officer to enter in the daytime, by force if necessary, any premises to which this section applies, calling on the assistance of any constable. (3) Every such constable shall, when so required, assist the authorised officer in the execution of the warrant and in levying the distress in the premises. (4) A warrant to enter premises by force shall be executed by the authorised officer, or under his direction and in his presence. (5) A distress levied by the authorised officer shall be kept for five days, and any costs or charges shall be borne by the person in default. (6) If the person in default does not pay the sum due, together with the costs and charges, the distress shall be appraised by one or more independent persons appointed by the authorised officer, and shall be sold by public auction by the authorised officer for payment of the sum due and all costs and charges. (7) Any surplus arising from the distress, after the deduction of the costs and charges and of the sum due, shall be paid to the owner of the goods distrained. (8) Regulations may make provision with respect to— (a) the fees chargeable on or in connection with the levying of distress; and (b) the costs and charges recoverable where distress has been levied. (9) In this section “authorised officer” means an officer of the Secretary of State authorised by him for the purposes of this section. (10) The premises to which this section applies are premises where an authorised officer has reasonable grounds for believing that— (a) any persons are employed; or (b) a trade or business is being carried on; but this section does not apply to a private dwelling-house unless an authorised officer has reasonable grounds for believing that a trade or business is being carried on from the dwelling-house and that the trade or business is not also being carried on from premises other than a dwelling-house. Recovery of contributions etc. in Scotland 121B (1) Where any contributions, interest or penalty remains unpaid 30 days after the service of a certificate under section 118(1) above, an authorised officer may apply to the sheriff for the grant of a summary warrant authorising the recovery of the amount remaining unpaid by any of the following diligences— (a) a poinding and sale in accordance with Schedule 5 to the Debtors (Scotland) Act l987; (b) an earnings arrestment; (c) an arrestment and action of furthcoming or sale. (2) An application under subsection (1) above shall be accompanied by— (a) a copy of the certificate served under section 118(1) above; and (b) a certificate by the authorised officer— (i) stating that the certificate was served on the person specified in the application; (ii) stating that the amount specified in the certificate, or any part of that amount, remains unpaid at the date of the application. (3) A summary warrant granted on an application under subsection (1) above shall be in such form as may be prescribed by Act of Sederunt. (4) Subject to subsection (5) below and without prejudice to paragraphs 25 to 34 of Schedule 5 to the Debtors (Scotland) Act 1987 (expenses of poinding and sale), the sheriff officer’s fees, together with the outlays necessarily incurred by him, in connection with the execution of a summary warrant granted on an application under subsection (1) above shall be chargeable against the debtor. (5) No fee shall be chargeable by the sheriff officer against the debtor for collecting, and accounting to the Secretary of State, for sums paid to him by the debtor in respect of the amount owing. (6) In this section “authorised officer” means an officer of the Secretary of State authorised by him for the purposes of this section.

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64 Liability of directors etc. for company’s contributions

After section 121B of the Administration Act there shall be inserted the following sections— Liability of directors etc. for company’s contributions 121C (1) This section applies to contributions which a body corporate is liable to pay, where— (a) the body corporate has failed to pay the contributions at or within the time prescribed for the purpose; and (b) the failure appears to the Secretary of State to be attributable to fraud or neglect on the part of one or more individuals who, at the time of the fraud or neglect, were officers of the body corporate (“culpable officers”). (2) The Secretary of State may issue and serve on any culpable officer a notice (a “personal liability notice”)— (a) specifying the amount of the contributions to which this section applies (“the specified amount”); (b) requiring the officer to pay to the Secretary of State— (i) a specified sum in respect of that amount; and (ii) specified interest on that sum; and (c) where that sum is given by paragraph (b) of subsection (3) below, specifying the proportion applied by the Secretary of State for the purposes of that paragraph. (3) The sum specified in the personal liability notice under subsection (2)(b)(i) above shall be— (a) in a case where there is, in the opinion of the Secretary of State, no other culpable officer, the whole of the specified amount; and (b) in any other case, such proportion of the specified amount as, in the opinion of the Secretary of State, the officer’s culpability for the failure to pay that amount bears to that of all the culpable officers taken together. (4) In assessing an officer’s culpability for the purposes of subsection (3)(b) above, the Secretary of State may have regard both to the gravity of the officer’s fraud or neglect and to the consequences of it. (5) The interest specified in the personal liability notice under subsection (2)(b)(ii) above shall be at the prescribed rate and shall run from the date on which the notice is issued. (6) An officer who is served with a personal liability notice shall be liable to pay to the Secretary of State the sum and the interest specified in the notice under subsection (2)(b) above. (7) Where, after the issue of one or more personal liability notices, the amount of contributions to which this section applies is reduced by a payment made by the body corporate— (a) the amount that each officer who has been served with such a notice is liable to pay under this section shall be reduced accordingly; (b) the Secretary of State shall serve on each such officer a notice to that effect; and (c) where the reduced liability of any such officer is less than the amount that he has already paid under this section, the difference shall be repaid to him together with interest on it at the prescribed rate. (8) Any amount paid under a personal liability notice shall be deducted from the liability of the body corporate in respect of the specified amount. (9) In this section— “contributions” includes any interest or penalty in respect of contributions; “officer”, in relation to a body corporate, means— any director, manager, secretary or other similar officer of the body corporate, or any person purporting to act as such; and in a case where the affairs of the body corporate are managed by its members, any member of the body corporate exercising functions of management with respect to it or purporting to do so; “the prescribed rate” means the rate from time to time prescribed by regulations under section 178 of the Finance Act 1989 for the purposes of the corresponding provision of Schedule 1 to the Contributions and Benefits Act, that is to say— in relation to subsection (5) above, paragraph 6(2)(a); in relation to subsection (7) above, paragraph 6(2)(b). Appeals in relation to personal liability notices 121D (1) No appeal shall lie in relation to a personal liability notice except as provided by this section. (2) An individual who is served with a personal liability notice may appeal to an appeal tribunal against the Secretary of State’s decision as to the issue and content of the notice on the ground that— (a) the whole or part of the amount specified under subsection (2)(a) of section 121C above (or the amount so specified as reduced under subsection (7) of that section) does not represent contributions to which that section applies; (b) the failure to pay that amount was not attributable to any fraud or neglect on the part of the individual in question; (c) the individual was not an officer of the body corporate at the time of the alleged fraud or neglect; or (d) the opinion formed by the Secretary of State under subsection (3)(a) or (b) of that section was unreasonable. (3) The Secretary of State shall give a copy of any notice of an appeal under this section, within 28 days of the giving of the notice, to each other individual who has been served with a personal liability notice. (4) On an appeal under this section, the burden of proof as to any matter raised by a ground of appeal shall be on the Secretary of State. (5) Where an appeal under this section— (a) is brought on the basis of evidence not considered by the Secretary of State, or on the ground mentioned in subsection (2)(d) above; and (b) is not allowed on some other basis or ground, the appeal tribunal shall either dismiss the appeal or remit the case to the Secretary of State, with any recommendations it sees fit to make, for him to consider whether to revise his decision as to the issue and content of the personal liability notice. (6) In this section— “appeal tribunal” means an appeal tribunal constituted under Chapter I of Part I of the Social Security Act 1998; “officer”, in relation to a body corporate, has the same meaning as in section 121C above; “personal liability notice” has the meaning given by subsection (2) of that section; “revise” means revise under section 9 of the Social Security Act 1998.

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65 Class 1B contributions: supplemental

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) In subsection (5) of section 162 of that Act (destination of contributions), after paragraph (c) there shall be inserted the following paragraph— (ca) in the case of Class 1B contributions, 0.9 per cent of the amount estimated to be the aggregate of the emoluments and the amounts of income tax in respect of which those contributions were paid; .

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66 Payments of certain contributions out of the Consolidated Fund

(1) Subsection (4) of section 163 of the Administration Act (general financial arrangements) shall have effect, and shall be deemed always to have had effect, as if— (a) for the words “a secondary contributor” there were substituted the words “any person”; and (b) after the words “any secondary Class 1 contributions” there were inserted the words “, or any Class 1A contributions,”. (2) Subsection (2) of section 1 of the Social Security (Miscellaneous Provisions) Act 1977 (from which subsection (4) of section 163 is derived) shall be deemed to have had effect with the same amendments as from the commencement of the Social Security (Contributions) Act 1991.

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67 Daily rate of maternity allowance

In subsection (5) of section 35 of the Contributions and Benefits Act (maternity allowance), for paragraphs (a) and (b) there shall be substituted the words “the amount payable by way of that allowance for any day shall be taken as one seventh of the weekly rate of the allowance”.

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68 Rates of short-term incapacity benefit

For subsection (4) of section 44 of the Contributions and Benefits Act (Category A retirement pension) there shall be substituted the following subsection— (4) The weekly rate of the basic pension shall be £64.70 except that, so far as the sum is relevant for the purpose of calculating the lower rate of short-term incapacity benefit under section 30B(3) above, it shall be £62.05. In this subsection “the lower rate” means the rate payable for the first 196 days of entitlement in any period of incapacity for work.

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69 Validation of certain housing benefit determinations

(1) Subject to subsections (3) and (4) below, in so far as a housing benefit determination made before 18th August 1997 purported to determine that housing benefit was payable in respect of— (a) charges for medical care, nursing care or personal care; or (b) charges for general counselling or any other support services, it shall be deemed to have been validly made if, on the assumption mentioned in subsection (2) below, it would have been so made. (2) The assumption is that, at all material times, such charges as are mentioned in subsection (1) above were eligible to be met by housing benefit where the claimant’s right to occupy the dwelling was conditional on his payment of the charges. (3) Where the effect of a review carried out on or after 18th August 1997 was to revise the amount of housing benefit payable in respect of any validated charges— (a) the revision shall be deemed not to have been validly made in so far as it had the effect of increasing that amount; and (b) housing benefit shall cease to be payable in respect of those charges as from the beginning of the period for which the first payment of the revised amount of benefit was made. (4) Housing benefit shall not be payable in respect of any validated charges for any period falling after— (a) 5th April 1998 where the rent is payable at intervals of a whole number of weeks; and (b) 31st March 1998 in any other case. (5) In this section— “the dwelling”, in relation to a housing benefit determination, means the dwelling in respect of which the determination was made; “housing benefit determination” means a determination under section 130 of the Contributions and Benefits Act or the corresponding provisions of the Social Security Act 1986, or a decision on a review of such a determination; “medical care” includes treatment or counselling related to mental disorder, mental handicap, physical disablement or past or present alcohol or drug dependence; “personal care” includes assistance at meal-times or with personal appearance or hygiene; “validated charges” means charges in respect of which housing benefit is payable only by virtue of subsection (1) above.

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70 Discretionary payments out of social fund

(1) For subsection (1) of section 138 of the Contributions and Benefits Act (payments out of social fund) there shall be substituted the following subsection— (1) There may be made out of the social fund, in accordance with this Part of this Act— (a) payments of prescribed amounts, whether in respect of prescribed items or otherwise, to meet, in prescribed circumstances, maternity expenses and funeral expenses; and (b) payments by way of community care grant, crisis loan or budgeting loan to meet other needs in accordance with directions given or guidance issued by the Secretary of State. (2) After subsection (4) of that section there shall be inserted the following subsection— (5) In this Part— “budgeting loan” means a loan awarded in circumstances specified in directions issued by the Secretary of State for the purpose of defraying an intermittent expense; “community care grant” means a grant awarded in circumstances so specified for the purpose of meeting a need for community care; “crisis loan” means a loan awarded in circumstances so specified for the purpose of meeting an immediate short term need; and any reference in this subsection to meeting a need or defraying an expense includes a reference to helping to meet the need or to defray the expense.

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71 Budgeting loans: criteria for making awards

(1) In subsection (1) of section 140 of the Contributions and Benefits Act (social fund: principles of determination), after the word “award” there shall be inserted the words “of a community care grant or a crisis loan”. (2) After that subsection there shall be inserted the following subsection— (1A) Subject to subsection (2) below, in determining whether to make an award of a budgeting loan to the applicant, or the amount or value to be awarded, an appropriate officer shall have regard to— (a) such of the applicant’s personal circumstances as are of a description specified in directions issued by the Secretary of State; and (b) the criteria specified in paragraphs (b) to (e) of subsection (1) above; but where the criterion mentioned in paragraph (a) above would preclude the award of such a loan, the appropriate officer shall have regard instead to such other criterion as may be specified in directions so issued. (3) In subsection (4) of that section, paragraph (e) shall cease to have effect and after paragraph (a) there shall be inserted the following paragraph— (aa) that in circumstances specified in the direction an application for an award of a community care grant may be treated as an application for an award of a crisis loan, and vice versa; .

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72 Power to reduce child benefit for lone parents

(1) Regulations may revoke any provision of regulations which prescribes a higher rate of child benefit in the case of a lone parent, notwithstanding anything in section 145(4) of the Contributions and Benefits Act (which precludes regulations from prescribing a rate lower than the rate it replaces). (2) In this section “lone parent” means a parent who— (a) has no spouse or civil partner or is not living with his spouse or civil partner; and (b) is not living with any other person as his spouse or civil partner. (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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73 Statutory sick pay not precluded by maternity allowance

In paragraph 2(d) of Schedule 11 to the Contributions and Benefits Act (circumstances in which periods of entitlement to statutory sick pay do not arise), the words “(ii) she was entitled to a maternity allowance, or” shall cease to have effect.

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74 Provision of information

In subsection (1) of section 5 of the Administration Act (regulations about claims for and payments of benefit), there shall be inserted after paragraph (h) the following paragraph— (hh) for requiring such person as may be prescribed in accordance with the regulations to furnish any information or evidence needed for a determination whether a decision on an award of benefit to which this section applies— (i) should be revised under section 9 of the Social Security Act 1998; or (ii) should be superseded under section 10 of that Act; .

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