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The Social Security (Contributions, Re-rating) Order 1988

S.I. 1988/675 · Made 31 March 1988

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

SOCIAL SECURITY

Made 31st March 1988

Coming into force 6th April 1988

Whereas the Secretary of State for Social Services, as a result of carrying out in the tax year 1987—88 a review of the general level of earnings pursuant to subsections (2) and (3) of section 120 of the Social Security Act 1975f1, has determined that an Order should be made under that section amending Part I of the said Act by altering the rates of Class 2 and Class 3 contributions, the amount of earnings below which an earner may be excepted from liability for Class 2 contributions and the lower and upper limits of profits or gains to be taken into account for Class 4 contributions:

And whereas the Secretary of State, for the purposes of adjusting amounts payable by way of Class 1 contributions, has determined that an Order should be made under section 123A(1) and (2) of that Actf2 amending section 4(6B) and (6E) of that Actf3 by altering the weekly earnings figures therein specified:

And whereas a draft of the following Order was laid before Parliament in accordance with the provisions of sections 120(4), 121(2) and 123A(6) of that Act and approved by resolution of each House of Parliament:

Now, therefore, the Secretary of State for Social Services, in conjunction with the Treasury so far as relates to matters with regard to which the Treasury has so directedf4, in exercise of powers conferred upon him by sections 120(5) and (6), 121(2) and 123A(1) and (2) of the said Act and of all other powers enabling him in that behalf, hereby makes the following Order:

Annotations to the whole text

Footnotes

f1

1975 c. 14; section 120(1) was amended by the Social Security Pensions Act 1975 (c. 60), section 65 and Schedule 4, paragraph 50 (b), and see paragraph 50(a).

f2

Section 123A was inserted by section 7(5) of the Social Security Act 1985 (c. 53) and amended by section 74(1) and (2) of the Social Security Act 1986 (c. 50).

f3

Section 4(6B) and (6E) was inserted by section 7(2) of the Social Security Act 1985; the relevant instrument amending section 4(6B) and (6E) is S.I. 1987/46.

f4

See section 166(5) of the Social Security Act 1975.

Contents

  1. 1Citation, commencement and interpretation
  2. 2Weekly earnings figures for primary and secondary earnings brackets
  3. 3Rate of, and small earnings exception from, Class 2 contributions
  4. 4Amount of Class 3 contributions
  5. 5Lower and upper limits for Class 4 contributions
  6. Signature
  7. Explanatory note

1Citation, commencement and interpretation

(1)

This Order may be cited as the Social Security (Contributions, Re-rating) Order 1988 and shall come into force on 6th April 1988.

(2)

In this Order “the Act” means the Social Security Act 1975.

2Weekly earnings figures for primary and secondary earnings brackets

(1)

Section 4 of the Act (incidence of Class 1 contributions) shall be amended in accordance with the provisions of this article.

(2)

In subsection (6B)f1 (primary earnings brackets)—

(a)

for the figure £64.99 specified in respect of Bracket 1 there shall be substituted the figure £69.99;

(b)

for the figures £65.00 and £99.99 specified in respect of Bracket 2 there shall be substituted respectively the figures £70.00 and £104.99;

(c)

for the figure £100.00 specified in respect of Bracket 3 there shall be substituted the figure £105.00.

(3)

In subsection (6E)f2 (secondary earnings brackets)—

(a)

for the figure £64.99 specified in respect of Bracket 1 there shall be substituted the figure £69.99;

(b)

for the figures £65.00 and £99.99 specified in respect of Bracket 2 there shall be substituted respectively the figures £70.00 and £104.99;

(c)

for the figures £100.00 and £149.99 specified in respect of Bracket 3 there shall be substituted respectively the figures £105.00 and £154.99;

(d)

for the figure £150.00 specified in respect of Bracket 4 there shall be substituted the figure £155.00.

3Rate of, and small earnings exception from, Class 2 contributions

In section 7 of the Act (Class 2 contributions)—

(a)

in subsection (1) (weekly rate) for “£3.85”f1 there shall be substituted “£4.05”;

(b)

in subsection (5) (small earnings exception) for “£2,125”f2 there shall be substituted “£2,250”.

4Amount of Class 3 contributions

In section 8(1) of the Act (amount of Class 3 contributions) for “£3.75”f1 there shall be substituted “£3.95”.

5Lower and upper limits for Class 4 contributions

In sections 9(2) and 10(1) of the Act (Class 4 contributions recoverable under Tax Acts and regulations)—

(a)

for “£4,590” (lower limit)f1 wherever that amount appears there shall be substituted in each of those sections “£4,750”;

(b)

for “£15,340” (upper limit)f2 there shall be substituted in each of those sections “£15,860”.

Signature

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

Michael Portillo

Parliamentary Under-Secretary of State,

Department of Health and Social Security

29th March 1988

Peter Lloyd

Michael Neubert

Two of the Lords Commissioners of Her Majesty’s Treasury

31st March 1988

Explanatory note

(This note is not part of the Order)

This Order increases the amounts of weekly earnings specified in the earnings brackets in section 4(6B) and (6E) of the Social Security Act 1975, determining the appropriate percentage rate at which Class 1 contributions are payable under that Act (article 2). In both subsections, the increases in respect of Bracket 1 are from £64.99 to £69.99 and in respect of Bracket 2 from £65.00 and £99.99 to £70.00 and £104.99. In subsection (6B), the increase in respect of Bracket 3 is from £100 to £105. In subsection (6E), the increase in respect of Bracket 3 is from £100.00 and £149.99 to £105.00 and £154.99 and, in respect of Bracket 4, from £150.00 to £155.00.

This Order increases the rates of Class 2 and Class 3 contributions payable under that Act from £3.85 to £4.05 and from £3.75 to £3.95 respectively (articles 3(a) and 4). It increases from £2,125 to £2,250 the amount of earnings below which an earner may be excepted from liability for Class 2 contributions (article 3(b)). It also increases, from £4,590 to £4,750 and from £15,340 to £15,860, the lower and upper limits of profits or gains between which Class 4 contributions are payable (article 5).

In accordance with sections 121(1) and 123A(6A) of the Social Security Act 1975, a copy of the report by the Government Actuary (Cm 257), giving his opinion on the likely effect on the National Insurance Fund of the making of the Order, was laid before Parliament with a draft of it.