Social Security Act 1985

SCHEDULE 1A (1) (1) This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this Schedule if— (a) it terminates before normal pension age; and (b) on the date when it terminates— (i) he has accrued rights to benefit under the scheme; or (ii) he would have accrued rights to benefit under it if his relevant employment had also terminated on that date. (2) In this Part of this Schedule “the revaluation condition” means— (a) in relation to benefit payable to the member, that, subject to sub-paragraph (3) below, there are 365 days or more in the period of which the first day is the day after the date when his pensionable service terminates and the last is the day on which he attains normal pension age; (b) in relation to benefit payable to any other person in respect of the member, that, subject to sub-paragraph (3) below, there are 365 days or more in the period mentioned in paragraph (a) above and the member dies after attaining normal pension age. (3) For the purpose of calculating the number of days in the period mentioned in sub-paragraph (2) above, any day which is 29th February shall be disregarded. (4) For the purposes of this Part of this Schedule “normal pension age”, “relevant employment” and, subject to paragraph 2(3) below, “pensionable service” are to be construed in accordance with Schedule 16 to the Social Security Act 1973. (2) (1) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied— (a) any pension or other retirement benefit payable under the scheme to the member; and (b) any pension or other benefit payable under it to any other person in respect of him, is to be revalued by adding the appropriate amount to the amount that would be payable but for this Schedule or regulations made under it. (2) For the purposes of this Schedule “the appropriate amount” is $$ABC(D-E),$where—(a) A=the revaluation percentage specified in the last period of one year beginning on the date of the commencement of this Part of this Schedule or on an anniversary of that date and ending before the date on which the member attains normal pension age as the revaluation percentage for the period which is of the same length as the number of complete years in the period mentioned in paragraph 1(2)(a) above;(b) B=the length of the member’s qualifying pensionable service;(c) C=the length of his pensionable service;(d) D=the amount of the pension or other benefit—$ (i) which on the date when his pensionable service terminates has accrued to him or to any other person in respect of him; or (ii) which would have so accrued on that date if his relevant employment had also terminated on that date; (e) E=any part of the amount mentioned in paragraph (d) above which consists of the member’s or his widow’s guaranteed minimum. (3) In sub-paragraph (2)(b) and (c) above— - “pensionable service” includes any notional pensionable service which is credited to the member by the scheme; and - “qualifying pensionable service” means any part of the member’s pensionable service which falls on or after 1st January 1985. (4) For the purposes of sub-paragraph (2)(b) and (c) above, any notional pensionable service which is credited to a member by a scheme shall be taken to have ended immediately before the member’s actual pensionable service began. (5) Any rule of a scheme the effect of which is that benefit falls to be revalued by reference to any period is to be disregarded in making any calculation required by this paragraph. (3) (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference to the member’s average salary over the period of service on which that benefit is based. (2) A benefit to which this paragraph applies is referred to in this Schedule as an “average salary benefit”. (3) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any average salary benefit payable to the member or to any other person in respect of him is to be revalued— (a) by revaluing his salaries during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or (b) by the method specified in paragraph 2 above. (4) The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate. (5) In this paragraph “salaries” means the member’s salaries for the period between 1st January 1985 and the date when his pensionable service terminated, or such part of them as was relevant under the scheme to the calculation of the retirement benefits payable under the scheme to him or to any other person in respect of him; and those salaries are to be taken for the purposes of this paragraph to include— (a) any amount which is attributed to them, otherwise than by virtue of this paragraph, as the result of a revaluation for which the rules of the scheme provide; and (b) any amount which is for any reason credited to the member by way of salary notionally earned. (6) For the purposes of the application of this paragraph to a case where a member is credited with an amount by reference to salary notionally earned over a period of time of a particular length that period shall be taken to have ended immediately before the member’s actual pensionable service began. (4) (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference solely to the member’s length of service. (2) A benefit to which this paragraph applies is referred to in this Schedule as a “flat rate benefit”. (3) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any flat rate benefit payable to the member or to any other person in respect of him is to be revalued— (a) by revaluing the benefits which have accrued to him during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or (b) by the method specified in paragraph 2 above. (4) The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate. (5) (1) This paragraph applies to any benefit the rate or amount of which is calculated by reference to a payment or payments made by the member, or by any other person in respect of him. (2) A benefit to which this paragraph applies is referred to in this Schedule as a “money purchase benefit”. (3) In the case of such a benefit, if the revaluation condition is satisfied, the investment yield and any bonuses arising from payments made by or on behalf of a member shall be applied, subject to sub-paragraph (4) below, towards providing any pension or other retirement benefit which is payable under the scheme to him or to any other person in respect of him in the manner in which they would have been applied if his pensionable service had not terminated. (4) The Secretary of State may by regulations authorise trustees and managers of schemes to deduct from any pension or other retirement benefit provided under sub-paragraph (3) above an appropriate amount in respect of the administrative expenses incurred by them in carrying this paragraph into effect. (6) Nothing in paragraph 2, 3, 4 or 5 above is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 by way of complete substitute for another pension or benefit. (7) (1) Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule. (2) This Part of this Schedule does not override a protected provision of a scheme. (3) Subject to sub-paragraph (4) below, in sub-paragraph (2) above “protected provision” has the same meaning as it has in subsection (2) of section 41C above by virtue of subsection (3) of that section. (4) In its application to schemes which are not contracted-out section 41C(3) above shall have effect for the purpose of this paragraph as if— (a) there were omitted— (i) from paragraph (a), sub-paragraph (ii) and the word “or” immediately preceding it; (ii) from paragraph (b), the word “and”; and (iii) from paragraph (c), the words from “authorised” to the end; and (b) there were added at the end of paragraph (c) the words ”and (d) any provision of a scheme whereby— (i) no pension, or a pension at a reduced rate, is payable to a widow whom the earner married not more than six months before his death; (ii) the whole or any part of a pension is not paid to a widow, but instead comparable benefits are provided for one or more dependants of the deceased earner; or (iii) no pension, or a pension at a reduced rate, is payable to a widow (or, where a provision such as is mentioned in sub-paragraph (ii) above operates, to another dependant of the deceased) who was more than ten years younger than he was.” (8) If under a scheme— (a) the amount of the pension or other benefit for a member or for any other person in respect of him falls to be increased during the period mentioned in paragraph 1(2)(a) above— (i) by the percentages specified during that period under section 23(2) above; or (ii) under any arrangement which, in the opinion of the Occupational Pensions Board, maintains the value of the pension or other benefit by reference to the rise in the general level of prices in Great Britain during that period; and (b) the increase falls to be determined by reference to an amount from which the guaranteed minimum for a member or his widow has not been deducted, the fact that the scheme provides as mentioned in sub-paragraph (a) above does not in itself result in conflict with paragraph 2, 3 or 4 above. (9) In making any calculation for the purposes of this Part of this Schedule any commutation, forfeiture or surrender of the whole or part of a pension shall be disregarded. (10) The same money may not be treated as providing both the benefit required by section 41A or 41B above and the increase in benefit required by this Part of this Schedule. (11) (1) This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this Part of this Schedule if— (a) it terminates at least one year before normal pension age; and (b) on the date when it terminates— (i) he has accrued rights to benefit under the scheme; or (ii) he would have accrued rights to benefit under it if his relevant employment had also terminated on that date. (2) For the purposes of this Part of this Schedule “relevant employment”, “pensionable service” and “normal pension age” are to be construed in accordance with Schedule 16 to the Social Security Act 1973. (3) Any reference to a member in the following provisions of this Part of this Schedule is a reference to a member of an occupational pension scheme to whom this Part of this Schedule applies. (12) (1) Subject to the following provisions of this Schedule, a member acquires a right, when his pensionable service terminates, to the cash equivalent at the relevant date of any benefits— (a) which have accrued to or in respect of him under the applicable rules; or (b) which would have so accrued to or in respect of him if his relevant employment had terminated on the date when his pensionable service terminates. (2) In this paragraph “the applicable rules” means— (a) the rules of the scheme, except so far as— (i) section 41A or 41B above; or (ii) Part I of this Schedule, overrides them; and (b) any provision which the rules of the scheme do not contain but which a scheme must contain if it is to conform with the preservation requirements; and (c) any provision— (i) of section 41A or 41B above; or (ii) of Part I of this Schedule, which overrides any of the rules of the scheme; - “the relevant date” means the date when the member’s pensionable service terminates or the date of the relevant application, whichever is the later; and - “the relevant application” means any application which the member has made under paragraph 16 below and which he has not withdrawn. (3) Subject to sub-paragraph (4) below, in sub-paragraph (2) above “the preservation requirements” means the requirements set out in Part I of Schedule 16 to the Social Security Act 1973 as the requirements of Part II of that Act relating to preservation of benefit under occupational pension schemes. (4) Where— (a) a scheme provides benefits for members with less than 5 years’ qualifying service, as defined in paragraph 7 of Schedule 16 to the Social Security Act 1973; and (b) on the date when the pensionable service of a member of that scheme terminates he has sufficient service to qualify for benefits under the scheme, paragraph 6(1)(b) of that Schedule is to be treated as if a reference to the service which the member has on the date when his pensionable service terminates were substituted for the reference to 5 years’ qualifying service. (13) (1) A member who acquires a right to a cash equivalent under this Part of this Schedule may only take it by exercising the option conferred by sub-paragraph (2) below. (2) Subject to sub-paragraphs (3) and (4) below, the option conferred by this sub-paragraph on any such member is that of requiring the trustees or managers of the scheme of which he is a member to use the cash equivalent to which he has acquired a right in whichever of the ways specified in paragraphs (a), (b) and (c) below he chooses— (a) for acquiring transfer credits allowed under the rules of another scheme whose trustees or managers are able and willing to accept him and which satisfies prescribed requirements; (b) for purchasing from one or more insurance companies such as are mentioned in section 52C(4)(a) above, chosen by the member and willing to accept payment on account of the member from the trustees or managers, one or more annuities which satisfy prescribed requirements; (c) subject to sub-paragraph (3) below, for subscribing to such other type or types of pension arrangements as may be prescribed. (3) Except in such circumstances as may be prescribed sub-paragraph (2) above is to be construed as if paragraph (c) were omitted. (4) A member may exercise the option conferred by sub-paragraph (2) above in different ways in relation to different portions of his cash equivalent, but a member who exercises that option must do so in relation to the whole of his cash equivalent or, where sub-paragraph (5) below applies, in relation to the whole of the sum mentioned in sub-paragraph (6) below. (5) Where— (a) the trustees or managers of an occupational pension scheme which is not a contracted-out scheme are able or willing to have transferred to it only the liability for a member’s accrued rights other than his accrued rights to guaranteed minimum pensions; and (b) the member has not required them to use the portion of his cash equivalent that represents guaranteed minimum pensions in either of the ways specified in sub-paragraph (2)(b) and (c) above, paragraph 12 above, this paragraph and paragraph 14 below are to be construed as conferring on the member an option only in respect of the sum mentioned in sub-paragraph (6) below. (6) The sum referred to in sub-paragraph (5) above is the sum equal to the balance of the cash equivalent to which the member would be entitled if sub-paragraph (5) above did not apply, after deduction of an amount sufficient for the trustees or managers of the scheme from which he is being transferred to meet their liability in respect of his and his widow’s guaranteed minimum pensions. (14) (1) The cash equivalents mentioned in paragraph 12(1) above are to be calculated and verified in the prescribed manner. (2) The power to make regulations conferred by sub-paragraph (1) above includes power to provide that cash equivalents are to be calculated and verified in such manner as may be approved in particular cases— (a) by prescribed persons; or (b) by persons with prescribed professional qualifications or experience; or (c) by persons approved by the Secretary of State. (3) Regulations may provide— (a) that in calculating cash equivalents account shall be taken— (i) of any surrender, commutation or forfeiture of the whole or part of a member’s pension which occurs before the trustees or managers of the scheme of which he is a member do what is needed to comply with what he requires under paragraph 16 below; (ii) in a case where paragraph 13(5) above applies, of the need to deduct an appropriate amount to provide guaranteed minimum pensions; and (b) that in circumstances specified in the regulations a cash equivalent shall be increased or reduced to an amount greater or less than the amount for which paragraph 12(1) above provides. (4) Without prejudice to the generality of sub-paragraph (3) above— (a) the circumstances that may be specified by virtue of paragraph (b) of that sub-paragraph include— (i) the length of time which elapses between the termination of a member’s pensionable service and his exercise of the option conferred by this Part of this Schedule or regulations under it; (ii) failure by the trustees or managers of a scheme to do what is needed to carry out what a member of the scheme requires within six months of the date on which they receive an application from him under paragraph 16 below; and (iii) the state of the funding of a scheme; and (b) regulations under that sub-paragraph may specify as the amount by which a cash equivalent is to be reduced such an amount that a member has no right to receive anything. (15) (1) A member may only exercise the option conferred by paragraph 13 above on or before the last option date. (2) In this paragraph “the last option date” means the date which falls— (a) one year before the date on which he attains normal pension age; or (b) six months after the date when his pensionable service terminates, whichever is the later. (3) A member loses the right to any cash equivalent under this Part of this Schedule— (a) if his pension or benefit in lieu of a pension or any part of it becomes payable before he attains normal pension age; (b) if he fails to exercise the option conferred by paragraph 13 above on or before the last option date; or (c) if the scheme is wound up. (16) (1) A member may only exercise the option conferred by paragraph 13 above by making an application in writing to the trustees or managers of the scheme. (2) In any case where— (a) a member has exercised that option; and (b) the trustees or managers of the scheme have done what is needed to carry out what the member requires, the trustees or managers shall be discharged from any obligation to provide benefits to which the cash equivalent related except, in any such case as is mentioned in paragraph 13(5) above, to the extent that an obligation to provide such guaranteed minimum pensions continues to subsist. (3) If the trustees or managers of a scheme receive an application under this paragraph, it shall be their duty, subject to the following provisions of this paragraph, to do what is needed to carry out what the member requires— (a) within twelve months of the date on which they receive the application; or (b) by the date on which the member attains normal pension age, whichever is the earlier. (4) If— (a) disciplinary proceedings or proceedings before a court have been commenced against a member at any time before the expiry of the period of twelve months beginning with the date when his pensionable service terminates; and (b) it appears to the trustees or managers of the scheme of which he is a member that the proceedings may lead to the whole or part of the pension or benefit in lieu of a pension payable to the member or his widow being forfeited, it shall be the trustees’ or managers’ duty, subject to the following provisions of this paragraph, to do what is needed to carry out what the member requires before— (i) the date before which they would be obliged to do it under sub-paragraph (3) above; or (ii) the end of the period of three months after the conclusion of the disciplinary or court proceedings (including any proceedings on appeal), whichever is the later. (5) The Occupational Pensions Board may grant an extension of the period within which the trustees or managers of a scheme are obliged to do what is needed to carry out what a member of the scheme requires— (a) in any case where in the opinion of the Board— (i) the scheme is being wound up or is about to be wound up; (ii) the scheme is ceasing to be a contracted-out scheme; (iii) the interests of the members of the scheme generally will be prejudiced if the trustees or managers of the scheme do what is needed to carry out what is required within that period; or (iv) the member has not taken all such steps as the trustees or managers can reasonably expect him to take in order to satisfy them of any matter which falls to be established before they can properly carry out what he requires; (b) in any case where the provisions of section 49 above apply; and (c) in any case where a request for an extension has been made on a ground specified in paragraph (a) or (b) above, and the Board’s consideration of the request cannot be completed before the end of that period. (6) A request under sub-paragraph (5) above may only be made by the trustees or managers. (7) The Board shall have power, if they are satisfied that there has been a relevant change of circumstances since they granted an extension, or that they granted an extension in ignorance of a material fact or on the basis of a mistake as to a material fact— (a) to direct that the extension shall end on a date earlier than that on which it would otherwise have ended; or (b) to revoke the grant of the extension. (8) An application to the trustees or managers of a scheme under this paragraph is to be taken to have been made if it is delivered to them personally, or sent by post in a registered letter or by the recorded delivery service. (17) (1) Subject to sub-paragraph (2) below, a member of a scheme may withdraw an application under paragraph 16 above by giving the trustees or managers of the scheme notice in writing that he no longer wishes them to do what is needed to carry out what he previously required. (2) Such a notice shall be of no effect if it is given to the trustees or managers at a time when, in order to comply with what the member previously required, they have already entered into an agreement with a third party to use the whole or part of the member’s cash equivalent in a way specified in paragraph 13(2)(a), (b) or (c) above. (3) A member who withdraws an application may make another. (4) A notice to the trustees or managers of a scheme under this paragraph is to be taken to have been given if it is delivered to them personally, or sent by post in a registered letter or by recorded delivery service. (18) (1) Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule. (2) This Part of this Schedule does not override any provision of a scheme to the extent that it deals with priorities on a winding-up. (19) In making any calculation for the purposes of this Schedule— (a) any charge or lien on the whole or part of a pension; and (b) any set-off against the whole or part of a pension, shall be disregarded. (20) (1) The Secretary of State may by regulations direct that this Schedule shall have effect, in such cases as he may specify in the regulations, subject to such modifications as he may there specify. (2) In sub-paragraph (1) above “modification” includes, without prejudice to the generality of that sub-paragraph, addition, omission and amendment. (21) The Occupational Pensions Board may at any time, and shall if requested by the trustees or managers of an occupational pension scheme, advise on any question whether— (a) any provision of this Schedule (including, without prejudice to section 20(2) of the Interpretation Act 1978, any such provision as modified by regulations under paragraph 20 above) does or does not override any provision of the scheme; (b) any benefit is an average salary benefit, a flat rate benefit or a money purchase benefit. (22) (1) On an application made to them in respect of an occupational pension scheme (other than a public service pension scheme) by persons competent to make such an application in respect of it, the Occupational Pensions Board shall issue a determination on any such question as is mentioned in paragraph 21 above. (2) The persons competent to make an application under this paragraph in respect of a scheme are— (a) the persons mentioned in section 41E(2)(a) to (d) above; and (b) such other persons as regulations may specify, in relation to any category of schemes into which the scheme falls, as being proper persons to make an application for the purposes of this paragraph in respect of a scheme of that category. (23) It is hereby declared that nothing in the foregoing provisions of this Schedule is to be taken to preclude a scheme from being framed or managed more favourably to beneficiaries than is called for by those provisions.

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SCHEDULE 2

The following shall be inserted after section 56 of the Social Security Pensions Act 1975—

SCHEDULE 3

Part I — Earnings Factors

Social Security Pensions Act 1975 (c.60)

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• (1) In subsection (7) of section 35 of that Act (earner’s guaranteed minimum) for the words from “he” to “terminated”, in the second place where it occurs, there shall be substituted the words “the final relevant year shall be determined for the purposes of subsection (2) above by reference to the last order under section 21 above to come into force before the end of the tax year in which the service in question is terminated and without reference to the last such order to come into force before the end of the final relevant year”.

• (2) Any document the contents of which are in terms corresponding to those of section 35(7) of the Social Security Pensions Act 1975, as that subsection stood immediately before the passing of this Act, shall be construed as if its contents were and always had been in terms corresponding to those of that subsection as amended by sub-paragraph (1) above.

3

The following subsections shall be inserted after subsection (4) of section 41C of the Social Security Pensions Act 1975 (provisions supplementary to sections 41A and 41B)—

(4A) In calculating an earner’s guaranteed minimum for the purposes of sections 41A and 41B above his earnings factor shall be taken to be that factor as increased, except as provided by subsection (4B) below, by the last order under section 21 above to come into force before the end of the tax year in which the termination of employment date falls. (4B) If an earner’s termination of employment date falls in the tax year in which he attains pensionable age, subsection (4A) above shall have effect in relation to him as if for the words from “tax year” onwards there were substituted the words “final relevant year”. (4C) In subsection (4B) above “final relevant year” has the same meaning as in section 35 above.

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4

The following paragraph shall be substituted for subsection (6)(a) of section 44 of the Social Security Pensions Act 1975 (state scheme premiums)—

(a) any relevant earnings factor shall be taken to be that factor as increased by the last order under section 21 above to come into force before those five tax years; and

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5

The following paragraph shall be substituted for subsection (3)(a) of section 45 of that Act (limited revaluation premiums)—

(a) any earnings factor shall be taken to be that factor as increased by the last order under section 21 above to come into force before the five tax years ending with the tax year in which the scheme ceases to be contracted-out; and

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Social Security (Miscellaneous Provisions) Act 1977 (c.5)

6

The following paragraph shall be substituted for subsection (1)(a) of section 21 of the Social Security (Miscellaneous Provisions) Act 1977 (calculation of guaranteed minimum pensions preserved under approved arrangements)—

(a) any earnings factor shall be taken to be that factor as increased by the last order under section 21 of the Pensions Act to come into force before those five tax years; and

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7

• (1) The provisions of this Part of this Schedule other than paragraph 3 above shall be deemed to have come into force on 6th April 1979.

• (2) Paragraph 3 above shall be deemed to have come into force on 1st January 1985.

Part II — Guaranteed Minimum Pensions

Social Security Pensions Act 1975 (c.60)

8

In section 35 of the Social Security Pensions Act 1975 (earner’s guaranteed minimum)—

• (a) in subsection (8) (by virtue of which a scheme which provides for revaluation under subsection (7) must make the same provision for all its members), after the word “applies” there shall be inserted the words “, except in such cases or classes of case as may be prescribed,”; and

• (b) the following subsection shall be inserted after that subsection—

(8A) An occupational pension scheme which— (a) at any time before the coming into operation of the first regulations made under subsection (8) above did not satisfy that subsection; but (b) would have satisfied it if those regulations had then been in operation; shall, for the purpose of determining whether the scheme satisfied that subsection, be treated as if those regulations had been in operation at that time.

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SCHEDULE 4

Attachment of Earnings Act 1971 (c.32)

1

In section 24(1) of the Attachment of Earnings Act 1971 (meaning of “earnings”), the following paragraph shall be inserted after paragraph (b)—

(c) by way of statutory sick pay.

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Social Security Act 1975 (c.14)

2

In subsection (8) of section 22 of the Social Security Act 1975 (maternity allowances), after the word “above” there shall be inserted the words “and Schedule 3, Part I, paragraph 3”.

3

In section 36 of that Act (severe disablement allowance), the following subsection shall be inserted after subsection (4)—

(4A) A person shall not be entitled to a severe disablement allowance for any day which as between him and his employer falls within a period of entitlement for the purposes of statutory sick pay.

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Social Security and Housing Benefits Act 1982 (c.24)

4

The following subsections shall be inserted after subsection (6) of section 3 of the Social Security and Housing Benefits Act 1982 (periods of entitlement)—

(6A) In a case where the employee's contract of service first takes effect between two periods of incapacity for work which by virtue of section 2(3) of this Act are treated as one, the period of entitlement begins with the first day of the second of those periods. (6B) In any case where, otherwise than by virtue of section 4(2)(6) of the principal Act (exclusion of liability where earnings are below the lower earnings limit), an employee's earnings under a contract of service in respect of the day on which the contract takes effect do not attract a liability to pay secondary Class 1 contributions, subsections (6) and (6A) above shall have effect as if for any reference to the contract first taking effect there were substituted a reference to the first day in respect of which the employee's earnings attract such a liability.

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5

The following provisions of that Act (which relate to certain payments wrongly made)—

• (a) section 24 ; and

• (b) paragraphs 7 to 11 of Schedule 2,

shall cease to have effect.

6

• (1) In subsection (1) of section 26 of that Act (interpretation) the following definition shall be substituted for the definition of " employer " —

• " employer", in relation to an employee and a contract of service of his, means a person who under section 4 of the principal Act (liability to pay Class 1 contributions) is, or but for subsection (2)(b) of that section (exclusion of liability where earnings are below lower earnings limit) would be, liable to pay secondary Class 1 contributions in relation to any earnings (within the meaning of that Act) of the employee under the contract;

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• (2) Sub-paragraph (1) above shall not have effect in relation to periods of entitlement (within the meaning of section 3 of that Act) beginning before the commencement of this paragraph.

7

In section 26(2) of that Act for the words " his average weekly earnings in the relevant period " there shall be substituted the words " the average weekly earnings which in the relevant period have been paid to him or paid for his benefit".

SCHEDULE 5

Social Security Act 1973 (c.38)

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3

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4

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Social Security Act 1975 (c.14)

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6

In section 13 of that Act—

• (a) in paragraph (a) of subsection (5) (earnings factors), after the word “rise” there shall be inserted the words “, subject to subsection (5A) below,”; and

• (b) the following subsection shall be inserted after that subsection—

(5A) The Secretary of State may by regulations make such modifications of subsection (5)(a) above as appear to him to be appropriate in consequence of section 4(6B) above.

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7

The following subsection shall be added at the end of section 18 of that Act (duration of unemployment benefit)—

(4) Regulations may provide for treating a person for the purposes of this section as having been entitled to unemployment benefit for any day if he would have been entitled to it but for— (a) failure to make a claim; or (b) failure to make a claim within the prescribed time; but a person is not to be so treated where he shows that he did not intend, by so failing, to avoid the necessity of requalifying for benefit.

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8

The following section shall be substituted for section 83 of that Act—

(83) Regulations may provide for a person who would be entitled to any benefit but for the operation of any provision of this Act disentitling him to that benefit to be treated as if entitled to it for the purposes of any rights or obligations (whether his own or another's) under this Act which depend on his entitlement, other than the right to payment of the benefit.

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9

In section 122 of that Act (additional power to alter contributions)—

• (a) in subsection (1), the following paragraphs shall be substituted for paragraph (a)—

(a) the percentage rate for primary Class 1 contributions specified as the appropriate rate for Bracket 3 in section 4(6B); (aa) the percentage rate for secondary Class 1 contributions specified as the appropriate rate for Bracket 4 in section 4(6E);

and

• (b) in subsection (4), for the words from " 4(6)" to the end there shall be substituted the words

4 of this Act by altering— (a) the percentage rate for primary Class 1 contributions specified as the appropriate rate for Bracket 3 in subsection (6B); (b) the percentage rate for secondary Class 1 contributions specified as the appropriate rate for Bracket 4 in subsection (6E).

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10

The following paragraph shall be substituted for subsection (1)(d) of section 124 of that Act (power to increase rates of benefit)—

(d) section 30(1) above

.

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

In section 167 of that Act (parliamentary control or orders and regulations)—

• (a) in subsection (2), for “120 or 122” there shall be substituted “4, 120, 122 or 123A”; and

• (b) in subsection (3)—

• (i) after “section” there shall be inserted “4”; and

• (ii) after “122” there shall be inserted “, 123A”.

13

In paragraph 1 of Schedule 1 to that Act (Class 1 contributions where earner employed in more than one employment)—

• (a) in sub-paragraph (1A), the following words shall be substituted for the words from " the amount " to the end—

(a) the amount of the primary Class 1 contribution in respect of the aggregated earnings shall be determined in accordance with sub-paragraph (1B) below ; and (b) the amount of the secondary Class 1 contribution in respect of the aggregated earnings shall be determined in accordance with sub-paragraph (1D) below.

; and

• (b) the following sub-paragraphs shall be inserted after that sub-paragraph—

(1B) The amount of the primary Class 1 contribution shall be the aggregate of the amounts obtained— (a) by applying the rates of primary Class 1 contributions that would apply if the aggregated earnings were all attributable to contracted-out employments— (i) to the part of the aggregated earnings attributable to any such employments, or (ii) if that part exceeds the current upper earnings limit, to so much of that part as does not exceed that limit; and (b) if that part is less than that limit, by applying the rate of primary Class 1 contributions that would apply if the "aggregated earnings were all attributable to employments which are not contracted-out to so much of the remainder of the aggregated earnings as, when added to that part, does not exceed that limit. (1C) In relation to earners paid otherwise than weekly, any reference in sub-paragraph (1A) or (1B) above to the lower or upper earnings limit shall be construed as a reference to the prescribed equivalent of that limit. (1D) The amount of the secondary Class 1 contribution shall be the aggregate of the amounts obtained— (a) by applying the rates of secondary Class 1 contributions that would apply if the aggregated earnings were all attributable to contracted-out employments to the part of the aggregated earnings attributable to any such employments ; and (b) by applying the rate of secondary Class 1 contributions that would apply if the aggregated earnings were all attributable to employments which are not contracted-out to the remainder of the aggregated earnings.

.

14

In Schedule 20 to that Act (glossary of expressions) the following definition shall be inserted after the definition of " Employment " —

" Entitled " and cognate expressions	In relation to any benefit, see— the provisions specifically relating to that benefit; in the case of a benefit specified in section 12(1), section 13; and section 165A.

.

Social Security Pensions Act 1975 (c.60)

15

In section 1(1))(b) of the Social Security Pensions Act 1975 (earnings limits), the words " primary Class 1 " shall be substituted for the word " such".

16

In section 6 of that Act (rate of Category A retirement pension)—

• (a) in subsection (5), for the word “References”, in the first place where it occurs, there shall be substituted the words “Subject to subsection (5A) below, references”; and

• (b) the following subsection shall be inserted after that subsection—

(5A) The Secretary of State may prescribe circumstances in which pensioners’ earnings factors for any relevant year may be calculated in such manner as may be prescribed.

.

17

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19

The following subsection shall be substituted for subsection (5) of section 36 of that Act—

(5) The widow’s pension need not be in accordance with subsection (2) above in case of the earner dying after termination of his service in the relevant employment having completed in that employment less than five years’ qualifying service for the purposes of Schedule 16 to the Social Security Act 1973 (preservation).

.

20

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22

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23

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24

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25

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26

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27

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28

In section 46 of that Act (provisions as to actuarial tables) the words “sections 44(7), 44A(3) and 45(4)” shall be substituted—

• (a) in subsection (1), for the words “sections 44(7) and 45(4)”; and

• (b) in subsection (3), for the words “section 44(7) and 45(4)”.

29

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30

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31

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32

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33

The words “under section 38 of this Act” shall be omitted from subsection (5)(b) of section 59 of that Act (increase of official pensions).

34

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35

In subsection (4) of section 68 of that Act (provisions extending to Northern Ireland) for the words “Section 57 of this Act extends” there shall be substituted the words “Sections 56B, 56N and 57 of this Act extend”.

36

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Social Security Act 1980 (c.30)

37

In section 9(7) of the Social Security Act 1980, for the words “the Social Security Acts 1975 to 1984)”, in both places where they occur, there shall be substituted with words “the Social Security Acts 1975 to 1985”.

Social Security and Housing Benefits Act 1982 (c.24)

38

In section 20 of the Social Security and Housing Benefits Act 1982 (offences and penalties) “3(4A)(b)” shall be inserted after “section”.

Health and Social Security Act 1984 (c.48)

39

In section 26(5) of the Health and Social Security Act 1984, for the words from “and” in the first place where it occurs to “extend” there shall be substituted the words “extends”.

Social Security (Contributions) Regulations 1979 (S.I. 1979/591)

40

In regulation 98(c) of the Social Security (Contributions) Regulations 1979 (amount of Class 2 contribution of share fishermen) “£6.30” shall be substituted for “£7.55”.

SCHEDULE 6

Short service benefit for members of schemes whose employment is terminated before age of 26.

9

15

The following shall be inserted after section 56 of the Social Security Pensions Act 1975—

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13

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Editorial notes