Social Security Act 1985

JurisdictionUK Non-devolved
Citation1985 c. 53


Social Security Act 1985

1985 CHAPTER 53

An Act to amend the law relating to occupational pensions, social security and statutory sick pay; to empower the Secretary of State to amend section 1 of the Vaccine Damage Payments Act 1979 and extend the Pneumoconiosis etc. (Workers' Compensation) Act 1979; to make provision for pensions and gratuities for members of the Horserace Totalisator Board, the Horserace Betting Levy Board and the Gaming Board for Great Britain; and for connected purposes.

[22nd July 1985]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

I Occupational Pensions

Part I

Occupational Pensions

S-1 Short service benefit for members of schemeswhose employment is terminated before age of 26.

1 Short service benefit for members of schemeswhose employment is terminated before age of 26.

1. Paragraph 6(1)(a ) of Schedule 16 to the Social Security Act 1973(the effect of which is that an occupational pension scheme need not provide benefit for a member whose service in relevant employment is terminated before he has attained the age of 26) shall cease to have effect.

S-2 Transfer and revaluation.

2 Transfer and revaluation.

2. The Social Security Pensions Act 1975shall be amended in accordance with Schedule 1 to this Act—

a ) to introduce a premium payable in certain cases where an earner ceases to be in employment to which an occupational pension scheme applies and there is a transfer of his accrued rights
b ) to provide for the extinguishment of the liability of schemes to provide benefits which are secured by policies of insurance or annuity contracts
c ) to make further provision as to the revaluation of benefits under schemes; and
d ) to ensure that schemes provide transfer values for their members.
S-3 Information about schemes.

3 Information about schemes.

3. The Social Security Pensions Act 1975 shall be amended in accordance with Schedule 2 to this Act in relation to information about occupational pension schemes.

S-4 Earnings factors and guaranteed minimum pensions.

4 Earnings factors and guaranteed minimum pensions.

4. The Social Security Pensions Act 1975 and the Social Security (Miscellaneous Provisions) Act 1977shall be amended in accordance with Schedule 3 to this Act in relation to earnings factors and guaranteed minimum pensions.

S-5 Managers of schemes.

5 Managers of schemes.

(1) The Secretary of State may by regulations provide who is to be treated as a manager of an occupational pension scheme for any of the purposes—

(a ) of the Social Security Acts 1975 to 1985; or

(b ) of the Social Security Act 1973 .

(2) Section 166 of the Social Security Act 1975 shall apply to the power to make regulations under subsection (1) above as it applies to powers to make regulations under that Act.

(3) Regulations made under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4) In this section ‘occupational pension scheme’ has the meaning assigned to it by section 66 of the Social Security Pensions Act 1975.

S-6 Miscellaneous amendments relating to protection of pensions.

6 Miscellaneous amendments relating to protection of pensions.

(1) In subsection (1) of section 41A of the Social Security Pensions Act 1975 (protection of earners' pensions), the following words shall be substituted for the words from ‘than’ to the end—

‘(i) in a case where by virtue of paragraph 9(2)(b ) of Schedule 16 to the Social Security Act 1973 a pension is provided by way of complete substitute for short service benefit, than the weekly rate of that pension; and

(ii) in any other case, than the relevant aggregate.’.

(2) The following subsection shall be inserted after subsection (1B) of that section—

(1C) In subsection (1) above ‘the relevant aggregate’ means the aggregate of the following—

(a ) the relevant sum;

(b ) the excess mentioned in subsection (1)(c ) above; and

(c ) any amount which is an appropriate addition at the time in question.’.

(3) In subsection (1) of section 41B of that Act (protection of widows' pensions), the following words shall be substituted for the words from ‘than’ to the end—

‘(i) in a case where by virtue of paragraph 9(2)(b ) of Schedule 16 to the Social Security Act 1973 a pension is provided by way of complete substitute for a widow's pension, than the weekly rate of the pension so provided; and

(ii) in any other case, than the relevant aggregate.’.

(4) The following subsection shall be inserted after that subsection—

(1A) In subsection (1) above ‘the relevant aggregate’ means the aggregate of the following—

(a ) the relevant sum;

(b ) the excess mentioned in subsection (1)(c ) above; and

(c ) any amount which is an appropriate addition at the time in question.’.

(5) In subsection (3) of that section, for the words ‘assumption specified in subsection (4) below’ there shall be substituted the words ‘prescribed assumptions’.

(6) Regulations under that subsection may be framed so as to have effect as from 1st January 1985.

II Social Security

Part II

Social Security

S-7 Calculation of contributions.

7 Calculation of contributions.

(1) In subsection (1)(b ) of section 4 of the Social Security Act 1975 (incidence of Class 1 contributions), the words ‘primary Class 1’ shall be substituted for the word ‘such’.

(2) The following subsections shall be substituted for subsection (6) of that section—

(6) Subject to regulations under sections 128 to 132 below and to section 27 of the Pensions Act, the amount of a primary Class 1 contribution shall be the appropriate primary percentage of so much of the earnings paid in the week, in respect of the employment in question, as does not exceed the current upper earnings limit (or the prescribed equivalent in the case of earners paid otherwise than weekly).

(6A) The appropriate primary percentage is a percentage of the rate specified in subsection (6B) below as the appropriate rate for the primary earnings bracket (or the prescribed equivalent in the case of earners paid otherwise than weekly) into which the earner's earnings fall.

(6B) Subject to any order under this section or section 122 or 123A below, the primary earnings brackets and their appropriate percentage rates shall be—

Weekly earnings Percentage rate
Bracket 1:

current lower earnings limit to 54.99

5 per cent.
Bracket 2: 55.00 to 89.99 7 per cent.
Bracket 3: 90.00 or more 9 per cent.

(6C) Subject to regulations under subsection (7) or sections 128 to 132 below and to section 27 of the Pensions Act, the amount of a secondary Class 1 contribution shall be the appropriate secondary percentage of the earnings paid in the week in respect of the employment in question.

(6D) The appropriate secondary percentage is a percentage of the rate specified in subsection (6E) below as the appropriate rate for the secondary earnings bracket (or the prescribed equivalent in the case of earners paid otherwise than weekly) into which the earner's earnings fall.

(6E) Subject to any order under this section or section 122 or 123A below, the secondary earnings brackets and their appropriate percentage rates shall be—

Weekly earnings Percentage rate
Bracket 1:

current lower earnings limit to 54.99

5 per cent.
Bracket 2: 55.00 to 89.99 7 per cent.
Bracket 3: 90.00 to 129.99 9 per cent.
Bracket 4: 130.00 or more 10.45 per cent.

(6F) The Secretary of State may by order alter the number of primary or secondary earnings brackets below the highest bracket.

(6G) An order under this section may make such amendments of any enactment as appear to the Secretary of State to be necessary or expedient in consequence of any such alteration made by it.

(6H) No order shall be made under this section unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.

(6J) An order under this section shall be made so as to come into force—

(a ) on a date in the tax year in which it received Parliamentary approval; or

(b ) on a date in the next tax year.

(6K) Such an order shall have effect for the remainder of the tax year in which it comes into force and for any subsequent tax year (subject to the effect of any subsequent order under this section); and for this purpose the order is to be taken as receiving Parliamentary approval on the date on which the draft of it is approved by the second House to approve it.’.

(3) In section 7(1) of that Act (weekly rate of Class 2 contributions), ‘3.50’ shall be substituted for ‘4.75’.

(4) In section 8(1) of that Act (amount of a Class 3 contribution), ‘3.40’ shall be substituted for ‘4.65’.

(5) The following section shall be inserted after section 123 of that Act—

S-123A

123A ‘Further power to alter certain contributions.

(1) For the purposes of adjusting amounts payable by way of primary Class 1 contributions, the Secretary of State may at any time make an order amending section 4(6B) of this Act by altering any one or more of the following figures—

(a ) the upper weekly earnings figure specified in respect of Bracket 1;

(b ) the weekly earnings figures specified...

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