Social Security Pensions Act 1975

Part I — Contributions

Earnings limits

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• (1) For the purposes of the Social Security Act 1975 (in this Act referred to as " the principal Act ") and this Act—

• (a) the lower earnings limit for Class 1 contributions (level of weekly earnings at which liability for such contributions arises); and

• (b) the upper earnings limit for Class 1 contributions (maximum amount of weekly earnings in respect of which such contributions are payable),

for any tax year shall be such amounts as may be specified for that year by regulations made in accordance with subsections (2) and (3) below.

• (2) The amount specified as the lower earnings limit for any tax year shall be an amount equal to or not more than 49p less than—

• (a) the sum which at the beginning of that year is specified in section 6(1)(a) below; or

• (b) that sum as increased by any Act or order passed or made before the beginning of that year and taking effect before 6th May in that year.

• (3) The amount specified as the upper earnings limit for any tax year shall be an amount which either—

• (a) is equal to seven times the sum by reference to which the lower earnings limit for that year is specified in accordance with subsection (2) above ; or

• (b) exceeds or falls short of seven times that sum by an amount not exceeding half that sum.

Rates of contributions in respect of employed earners

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• (1) In section 4(6) of the principal Act (rates of Class 1 contributions)—

• (a) for the reference to 5.5 per cent, (primary contribution) there shall be substituted a reference to 6-5 per cent.; and

• (b) for the reference to 8.5 per cent, (secondary contribution) there shall be substituted a reference to 10 per cent.

• (2) Subsection (1) above is without prejudice to the power conferred by section 122 of the principal Act to alter the percentage rates for primary and secondary Class 1 contributions ; and if that subsection comes into force without any order having been made under that section altering either or both of the rates specified in that subsection the Secretary of State shall lay before Parliament a report explaining why he considers those rates to be appropriate.

Married women and widows

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• (1) The provisions of the principal Act whereby primary Class 1 contributions may be paid at a reduced rate and Class 2 contributions need not be paid by a married woman or widow shall cease to have effect.

• (2) As respects any woman who is married or a widow when subsection (1) above comes into force regulations shall provide—

• (a) for enabling her to elect that her liability in respect of primary Class 1 contributions shall be a liability to contribute at such reduced rate as may be prescribed; and

• (b) either for enabling her to elect that her liability in respect of Class 2 contributions shall be a liability to contribute at such reduced rate as may be prescribed or for enabling her to elect that she shall be under no liability to pay such contributions ; and

• (c) for enabling her to revoke any such election.

• (3) Regulations under subsection (2) above may—

• (a) provide for the making or revocation of any election under the regulations to be subject to prescribed exceptions and conditions;

• (b) preclude a person who has made such an election from paying Class 3 contributions while the election has effect;

• (c) provide for treating an election made or revoked for the purpose of any provision of the regulations as made or revoked also for the purpose of any other provision of the regulations;

• (d) provide for treating an election made in accordance with regulations under section 130(2) of the principal Act as made for the purpose of regulations under this section.

• (4) Regulations may provide for earnings factors to be derived, for such purposes as may be prescribed, from contributions which by virtue of regulations under subsection (2) above are paid at a reduced rate; and if provision is made for a person to have earnings factors so derived for the purpose of establishing entitlement to any benefit, the regulations may, in relation to that person, vary or add to the requirements for entitlement to that benefit.

Persons over pensionable age

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• (1) No primary Class 1 contribution shall be payable in respect of earnings paid to or for the benefit of an employed earner in respect of any period after he attains pensionable age, but without prejudice to any liability to pay secondary Class 1 contributions in respect of any such earnings.

• (2) No Class 2 contributions shall be payable by an earner in respect of any period after he attains pensionable age.

• (3) In section 9(8)(b) of the principal Act (exception from liability to pay Class 4 contributions for persons who have attained pensionable age and retired from regular employment) the words " and retired from regular employment" shall be omitted.

Voluntary contributions

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• (1) No person shall be entitled to pay a Class 3 contribution in respect of any tax year if his earnings factor, or the aggregate of his earnings factors, for that year derived from contributions actually paid is equal to or exceeds the qualifying earnings factor for that year; and regulations may provide for precluding the payment of Class 3 contributions in other cases.

• (2) Regulations may provide for the repayment of Class 3 contributions that have been paid in cases where their payment was precluded by, or by regulations made under, subsection (1) above; and contributions repayable by virtue of any such regulations shall, for the purpose of determining the contributor's entitlement to any benefit, be treated as not having been paid.

• (3) In subsection (1) above and in the subsequent provisions of this Act " qualifying earnings factor", in relation to any tax year, means an earnings factor equal to the lower earnings limit for that year multiplied by 52.

Part II — Benefits

Category A and B retirement pensions

Rate of Category A retirement pension

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• (1) The weekly rate of a Category A retirement pension shall consist of—

• (a) a basic component of £11.60 ; and

• (b) an additional component payable where there are one or more surpluses in the pensioner's earnings factors for the relevant years.

• (2) The additional component shall be the weekly equivalent of 1 ¼ per cent, of the amount of the surpluses mentioned in subsection (1)(b) above or, if there are more than 20 such surpluses, of those 20 which are the largest.

• (3) For the purposes of subsection (2) above the weekly equivalent of the amount there mentioned shall be calculated by dividing that amount by 52 and rounding the result to the nearest whole penny, taking ½ as nearest to the next whole penny above.

• (4) For the purposes of this section—

• (a) there is a surplus in the pensioner's earnings factor for a relevant year if that factor exceeds the qualifying earnings factor for the final relevant year; and

• (b) the amount of the surplus is the amount of that excess;

and for the purposes of paragraph (a) above the pensioner's earnings factor for any relevant year shall be taken to be that factor as increased by any order or orders that have come into force under section 21 below before the end of the final relevant year.

• (5) References in this section to the pensioner's earnings factor for any relevant year are references to the aggregate of his earnings factors derived from contributions actually paid by him in respect of that year.

• (6) In this section " relevant year " means any tax year (not being earlier than the first tax year for which lower and upper earnings limits are specified under section 1 above) in the period between (inclusive) the tax year in which the pensioner attained the age of 16 and (exclusive) the tax year in which he attained pensionable age and " final relevant year " means the last tax year which is a relevant year in relation to the pensioner.

Rate of widow's Category B retirement pension

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• (1) The weekly rate of a woman's Category B retirement pension payable—

• (a) by virtue of subsection (2) or (3) of section 29 of the principal Act during any period after the death of the husband; or

• (b) by virtue of subsection (4) of that section where the husband was over pensionable age when he died,

shall be determined in the manner specified in section 6 above for a Category A retirement pension, taking references in that section to the pensioner as references to the husband.

• (2) The weekly rate of a woman's Category B retirement pension payable by virtue of subsection (4) of section 29 of the principal Act where the husband was under pensionable age when he died shall be determined in the manner specified in section 6 above for a Category A retirement pension, taking references in that section to the pensioner and the tax year in which he attained pensionable age as references to the husband and the tax year in which he died.

Category B retirement pension for widower

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• (1) A man who has retired from regular employment shall be entitled to a Category B retirement pension if—

• (a) he has had a wife and she has died, and he was married to her when she died ; and

• (b) they were both over pensionable age when she died; and

• (c) she either was entitled to a Category A retirement pension or would have been so entitled if she had retired on the date of her death.

• (2) The weekly rate of a man's Category B retirement pension under this section shall be determined in the manner specified in section 6 above for a Category A retirement pension, taking references in that section to the pensioner as references to the wife.

• (3) Subject to the provisions of the principal Act, a man's Category B retirement pension under this section shall commence from the date on which he becomes entitled to it under subsection (1) above and shall be payable for his life.

Special provision for surviving spouses

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• (1) This section has effect where but for section 27(6) of the principal Act (prevention of double entitlement) a person would be entitled both—

• (a) to a Category A retirement pension; and

• (b) to a Category B retirement pension under section 8 above or a Category B retirement pension under section 29 of the principal Act by virtue of the contributions of a husband who has died.

• (2) If by reason of a deficiency of contributions the basic component in the Category A retirement pension falls Short of the sum specified in section 6(1)(a) above, that component shall be increased by the amount of the shortfall or the amount of the basic component in the rate of the Category B retirement pension, whichever is the less.

• (3) If the additional component in the Category A retirement pension falls short of the prescribed maximum, that component shall be increased by the amount of the shortfall or the amount of the additional component in the rate of the Category B retirement pension, whichever is the less.

Special provision for married women

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• (1) This section has effect where but for section 27(6) of the principal Act a married woman would be entitled both—

• (a) to a Category A retirement pension ; and

• (b) to a Category B retirement pension by virtue of the contributions of her husband.

• (2) If by reason of a deficiency of contributions the basic component in the Category A retirement pension falls short of the weekly rate specified in paragraph 9 of Part I of Schedule 4 to the principal Act (married woman's Category B retirement pension),' that component shall be increased by the amount of the shortfall or the amount of the weekly rate of the Category B retirement pension, whichever is the less.

Application of earnings rule

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Deferred retirement

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Schedule 1 to this Act shall have effect for increasing the rate of a Category A or Category B retirement pension in cases where a person defers his retirement after attaining pensionable age.

Widow's benefit

Rate of widowed mother's allowance and widow's pension

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• (1) Where a woman becomes entitled to a widowed mother's allowance or a widow's pension in consequence of the death of her husband and he was over pensionable age when he died, the weekly rate of that allowance or pension shall, subject to subsection (3) below, be determined in the manner specified in section 6 above for a Category A retirement pension, taking references in that section to the pensioner as references to the husband.

• (2) Where a woman becomes entitled to a widowed mother's allowance or widow's pension in consequence of the death of her husband and he was under pensionable age when he died, the weekly rate of that allowance or pension shall, subject to subsection (3) below, be determined in the manner specified in section 6 above for a Category A retirement pension, taking references in that section to the pensioner and the tax year in which he attained pensionable age as references to the husband and to the tax year in which he died.

• (3) The foregoing provisions of this section shall, so far as they relate to a widow's pension, have effect subject to section 26(2) of the principal Act (reduction of widow's pension for woman under 50).

Invalidity benefit and disablement pension

Rate of invalidity pension for persons under pensionable age

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Subject to subsection (4) of section 15 of the principal Act (persons over pensionable age), the weekly rate of an invalidity pension under that section shall for any period of interruption of employment be determined in the manner specified in section 6 above for a Category A retirement pension, taking the reference in that section to the tax year in which the pensioner attained pensionable age as a reference to the tax year which includes or included the first day of entitlement to the pension in that period.

Invalidity pension for widows

1–5

Invalidity pension for widowers

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• (1) This section applies to a man whose wife has died and who either—

• (a) was incapable of work at the time when she died; or

• (b) becomes incapable of work within the prescribed period after that time.

• (2) Subject to subsection (5) below, a man to whom this section applies shall be entitled to an invalidity pension under this section for any day of incapacity for work which—

• (a) falls in a period of interruption of employment that began before the time when his wife died or within the prescribed period after that time ; and

• (b) is after that time and after the first 168 days of incapacity for work in that period.

• (3) An invalidity pension under this section shall be payable at—

• (a) the weekly rate that would apply if the pension were payable under section 15 of the principal Act; or

• (b) the weekly rate specified in subsection (4) below,

whichever is the higher.

• (4) Where the man's wife was over pensionable age when she died the weekly rate mentioned in paragraph (b) of subsection (3) above is a rate determined in the manner specified in section 6 above for a Category A retirement pension, taking references in that section to the pensioner as references to the wife; and where the man's wife was under pensionable age when she died the weekly rate mentioned in that paragraph is a rate determined in the manner specified in section 6 above for a Category A retirement pension, taking references in that section to the pensioner and the tax year in which he attained pensionable age as references to the wife and the tax year in which she died.

• (5) A man. shall not be entitled to an invalidity pension under this section if he is over pensionable age and has retired from regular employment; but if he retires from regular employment, having attained pensionable age, and the period of interruption of employment mentioned in subsection (2)(a) above did not terminate earlier than the day before he attained that age—

• (a) he shall, if not otherwise entitled to a Category A retirement pension and also not entitled to a Category B retirement pension by virtue of section 8 above, be entitled to a Category A retirement pension; and

• (b) the weekly rate of the Category A retirement pension to which he is entitled (whether by virtue of paragraph (a) above or otherwise) shall be determined in the manner specified in subsection (3) above for an invalidity pension under this section.

• (6) No invalidity pension shall be payable under section 15 of the principal Act for any day of incapacity for which an invalidity pension is payable under this section.

Invalidity allowance and disablement pension

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Unemployment and sickness benefit

Rate of unemployment and sickness benefit for persons under pensionable age

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• (1) The rate of unemployment or sickness benefit shall be the same for all persons entitled by virtue of subsection (2)(a) of section 14 of the principal Act (persons under pensionable age); and accordingly for subsections (4) and (5) of that section (which provide for a higher or lower rate of benefit for such persons according to whether or not they are married women) there shall be substituted—

(4) In the case of a person entitled under subsection (2)(a) above, unemployment or sickness benefit shall be payable at the weekly rate specified in relation thereto in Schedule 4, Part I, paragraph 1.

• (2) In paragraph 1 of Part I of Schedule 4 to that Act for the entry in the second column there shall be substituted " £9.80 ".

Contribution conditions and earnings factors

Contribution conditions for retirement pensions, widowed mother's allowance and widow's pension

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• (1) Paragraph 5 of Schedule 3 to the principal Act (contribution conditions for Category A and B retirement pensions, widowed mother's allowance and widow's pension) shall be amended in accordance with subsections (2) and (3) below.

• (2) In sub-paragraphs (2)(b) and (3)(b) (earnings factor for any year to be not less than that year's lower earnings limit multiplied by 50) for the words " not less than that year's lower earnings limit multiplied by 50 " there shall be substituted the words " not less than the qualifying earnings factor for that year ".

• (3) After sub-paragraph (5) there shall be added—