The Social Security (Contracting-out and Qualifying Earnings Factor) Regulations 1996

• Citation: S.I. 1996/2477
• Sections: 2

Section 1 Citation, commencement and interpretation

(1) These Regulations may be cited as the Social Security (Contracting-out and Qualifying Earnings Factor) Regulations 1996 and shall come into force on 6th April 1997.

(2) In these Regulations, unless the context otherwise requires—

“the Contributions and Benefits Act" means the Social Security Contributions and Benefits Act 1992 ;

“the Pension Schemes Act" means the Pension Schemes Act 1993.

Section 2 Modification of the application of section 44(5) of the Contributions and Benefits Act

(1) Where, by virtue of subsection (1) of section 48A of the Pension Schemes Act, section 44(6) of the Contributions and Benefits Act has effect for the tax year 1997-98 or any later tax year, in relation to some but not all of the earnings of an earner, the application of section 44(5) of the Contributions and Benefits Act is modified for that year in accordance with this regulation.

(2) In a case where the year is one in which the amount of a Class 1 contribution in respect of the earnings paid to or for the benefit of an earner in a tax week was reduced under sections 41 (as it had effect before the second abolition date) or 42A of the Pension Schemes Act (reduced rates of Class 1 contributions for earners in contracted-out employment) section 44(5) of the Contributions and Benefits Act is modified so that the qualifying earnings factor for the purposes of section 44(5)(a) of that Act shall be calculated by applying the formula—

where—L is the weekly lower earnings limit for the final relevant year; and

N is the number of tax weeks in which a Class 1 contribution for the earner is reduced in accordance with sections 41 (as it had effect before the second abolition date) or 42A of the Pension Schemes Act.

(3) In a case where the year is one in which an amount is paid in respect of an earner under section 45(1) of the Pension Schemes Act (minimum contributions towards appropriate personal pension schemes) section 44(5) of the Contributions and Benefits Act is modified so that the qualifying earnings factor for the purposes of section 44(5)(a) of that Act shall be zero.