The Social Security (Contributions) (Re–rating and National Insurance Fund Payments) Order 1995

Made: 6th March 1995

Coming into force: 6th April 1995

Now, therefore, the Secretary of State for Social Security in exercise of powers conferred by sections 141(4) and (5), 142(2), 145(2) and 189(1) and (3) of the Administration Act and, with the consent of the Treasury, section 2(2) and (8) of the 1993 Act and of all other powers enabling him in that behalf, hereby makes the following Order:

Citation, commencement and interpretation

1

• (1) This Order may be cited as the Social Security (Contributions) (Re–rating and National Insurance Fund Payments) Order 1995 and shall come into force on 6th April 1995.

• (2) In this Order “the Act” means the Social Security Contributions and Benefits Act 1992.

Weekly earnings figures and appropriate percentage rates for secondary earnings brackets

2

• (1) Section 9 of the Act (calculation of secondary Class 1 contributions)[^f00004] shall be amended in accordance with the provisions of this article.

• (2) In subsection (3) (secondary earnings brackets and percentage rates)—

• (a) for the figure “£99.99” specified in respect of Bracket 1 there shall be substituted the figure “£104.99” and for the percentage rate figure “3.6 per cent.” there shall be substituted the figure “3 per cent.”;

• (b) for the figures “£100.00” and “£144.99” specified in respect of Bracket 2 there shall be substituted respectively the figures “£105.00” and “£149.99” and for the percentage rate figure “5.6 per cent.” there shall be substituted the figure “5 per cent.”;

• (c) for the figures “£145.00” and “£199.99” specified in respect of Bracket 3 there shall be substituted respectively the figures “£150.00” and “£204.99” and for the percentage rate figure “7.6 per cent.” there shall be substituted the figure “7 per cent.”;

• (d) for the figure “£200.00” specified in respect of Bracket 4 there shall be substituted the figure “£205.00”.

Rate of, and small earnings exception from, Class 2 contributions

3

In section 11 of the Act (Class 2 contributions)[^f00005]—

• (a) in subsection (1) (weekly rate) for the figure “£5.65” there shall be substituted the figure “£5.75”;

• (b) in subsection (4) (small earnings exception) for the figure “£3,200” there shall be substituted the figure “£3,260”.

Amount of Class 3 contributions

4

In section 13(1) of the Act (amount of Class 3 contributions)[^f00006] for the figure “£5.55” there shall be substituted the figure “£5.65”.

Lower and upper limits for Class 4 contributions

5

In both section 15(3) and section 18(1) of the Act (Class 4 contributions recoverable under the Income Tax Acts and under regulations)[^f00007]—

• (a) for the figure “£6,490” (lower limit) on each occasion where it appears there shall be substituted the figure “£6,640”;

• (b) for the figure “£22,360” (upper limit) there shall be substituted the figure “£22,880”.

Prescribed percentage of estimated benefit expenditure

6

Section 2(2) of the Social Security Act 1993 shall have effect with respect to the tax year 1995-96 and the prescribed percentage of estimated benefit expenditure for the financial year ending with 31st March in that tax year shall be 10.0 per cent.

Signed

Signed by authority of the Secretary of State for Social Security.

William Hague — Minister of State, — Department of Social Security — 1st March 1995

We consent,

Derek Conway — Timothy Kirkhope — Two of the Lords Commissioners of Her Majesty’s Treasury — 6th March 1995

Explanatory note

(This note is not part of the Order)

This Order increases the amounts of weekly earnings specified in the secondary earnings brackets in section 9(3) of the Social Security Contributions and Benefits Act 1992 (“the Act”), in respect of Bracket 1 from £99.99 to £104.99, in respect of Bracket 2 from £100.00 and £144.99 to £105.00 and £149.99, in respect of Bracket 3 from £145.00 and £199.99 to £150.00 and £204.99 and in respect of Bracket 4 from pound;200.00 to £205.00. The percentage rate is reduced, in respect of Bracket 1 from 3.6% to 3%, in respect of Bracket 2 from 5.6% to 5% and in respect of Bracket 3 from 7.6% to 7% (article 2).

The Order increases the rates of Class 2 and Class 3 contributions specified in sections 11(1) and 13(1) of the Act from £5.65 to £5.75 and from £5.55 to £5.65 respectively. It also increases from £3,200 to £3,260 the amount of earnings specified in section 11(4) below which an earner may be excepted from liability for Class 2 contributions (articles 3 and 4).

The Order increases, from £6,490 to £6,640 and from £22,360 to £22,880 respectively, the lower and upper limits of profits or gains specified in sections 15(3) and 18(1) of the Act between which Class 4 contributions are payable (article 5).

The Order provides for section 2(2) of the Social Security Act 1993 to have effect for the tax year 1995-96. It also provides that the amount of money provided by Parliament to be paid into the National Insurance Fund in that year shall not exceed in aggregate 10.0% of the estimated benefit expenditure for the financial year ending 31st March 1996 (article 6).

In accordance with sections 142(1) and 147(2) of the Social Security Administration Act 1992, a copy of the report by the Government Actuary (Cm. 2747) giving his opinion on the likely effect on the National Insurance Fund of the making of the Order in so far as it amends sections 9(3), 11(1) and (4), 13(1), 15(3) and 18(1) of the Act, was laid before Parliament with a draft of this Order.

Articles 3(b), 4 and 6 of this Order do not impose any costs on business. The effect of article 2 will be to impose an administrative cost on business. The effect of article 3(a) and, in some cases, of article 5, will be to increase the National Insurance contributions payable by the self-employed.

An assessment of the costs to business of applying articles 2, 3(a) and 5 has been placed in the Libraries of both Houses of Parliament. Copies can be obtained by post from the Department of Social Security, Room 09/03, Adelphi, 1-11 John Adam Street, London WC2N 6HT.

Footnotes

[^f00001]: 1992 c. 5.

[^f00002]: 1992 c. 4.

[^f00003]: 1993 c. 3.

[^f00004]: Section 9 was further amended by article 2 of S.I. 1994/544 from 6th April 1994.

[^f00005]: Section 11 was further amended by article 3 of S.I. 1994/544 from 6th April 1994.

[^f00006]: Section 13 was further amended by article 4 of S.I. 1994/544 from 6th April 1994.

[^f00007]: Sections 15 and 18 were further amended by article 5 of S.I. 1994/544 from 6th April 1994.