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12 (1) Paragraph 1 of Schedule 1 to the Welfare Reform Act (employment and support allowance: conditions relating to national insurance) is amended as follows.
(2) In sub-paragraph (1)(a) (Class 1 or Class 2 contributions to have been paid in respect of one of the last three complete tax years), for “three” substitute “ two ”.
(3) In sub-paragraph (1), for paragraph (c) substitute—
“(c)the claimant's earnings determined in accordance with sub-paragraph (2) must be not less than the base tax year's lower earnings limit multiplied by 26.”.
(4) For sub-paragraphs (2) and (3) substitute—
“(2) The earnings referred to in sub-paragraph (1)(c) are the aggregate of
(a)the claimant's relevant earnings for the base tax year upon which primary Class 1 contributions have been paid or treated as paid, and
(b)the claimant's earnings factors derived from Class 2 contributions.
(3) Regulations may make provision for the purposes of sub-paragraph (2)(a) for determining the claimant's relevant earnings for the base tax year.
(3A) Regulations under sub-paragraph (3) may, in particular, make provision—
(a)for making that determination by reference to the amount of a person's earnings for periods comprised in the base tax year;
(b)for determining the amount of a person's earnings for any such period by—
(i)first determining the amount of the earnings for the period in accordance with regulations made for the purposes of section 3(2) of the Contributions and Benefits Act, and
(ii)then disregarding so much of the amount found in accordance with sub-paragraph (i) as exceeded the base tax year's lower earnings limit (or the prescribed equivalent).”.
(5) In sub-paragraph (4)—
(a)in paragraph (a), for “persons who” substitute
(b)in that paragraph, after “prescribed time” insert
(ii)who satisfy other prescribed conditions”, and
(c)in paragraph (b), for “so entitled” substitute “ entitled as mentioned in paragraph (a)(i) ”.
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