National Insurance Act 1965

59 Further provisions as to payments in lieu of contributions.

(1) Except as provided by this section, section 58 of this Act shall apply whether a person's period of service in a non-participating employment comes to an end by reason of the termination of his service in that employment or by reason of the employment ceasing to be a non-participating employment, and, subject to any regulations under section 63(1) of this Act, where that period is brought to an end by an employer's death, shall apply as if it had come to an end immediately before the death.

(2) For the purposes of the said section 58, if an employment becomes or ceases to be a non-participating employment in the course of a person's service in it, his service before and after the time when it does so shall be treated as service in different employments.

(3) For the purposes of the said section 58, a person having at the end of his service in a non-participating employment equivalent pension benefits in respect of it shall be deemed to be assured of those benefits if, and shall be deemed not to be assured of them unless, either—

(a) he is absolutely and indefeasibly entitled to them, and the manner in which they are secured and the provision made for their payment are such as may be prescribed ; or

(b) such other conditions as may be prescribed are satisfied ;

and regulations may provide for treating as having effect from the end of a person's service in a non-participating employment any option exercised or other thing done within the prescribed period thereafter in relation to his retirement benefits in respect of it.

(4) Where—

(a) a payment in lieu of contributions would, but for this subsection, fall to be made in respect of a person on the coming to an end of his service in a non-participating employment; and

(b) on the coming to an end of that service, or within the prescribed period thereafter, he enters another non-participating employment; and

(c) his service in the previous employment is service qualifying him for equivalent pension benefits under the recognised superannuation scheme relating to his new employment (on the like assumptions as are to be made under section 57(2) and (3) of this Act in relation to his service in the new employment); and

(d) if the scheme is a recognised superannuation scheme by virtue of paragraph (b) of section 57(4) of this Act, the conditions of that paragraph are satisfied in relation to the said benefits,

then for the purpose of any liability to make a payment in lieu of contributions in respect of him the two employments shall be treated as a single continuous employment (any interval being disregarded):

Provided that—

(i) this subsection shall not apply unless either both employments are under the same employer or such other conditions as may be prescribed are satisfied; and

(ii) regulations may direct that paragraph (c) of this subsection shall not apply in any prescribed cases in which provision is made by the recognised superannuation scheme relating to the new employment for taking into account in any manner the service in the previous employment.

(5) Provision may be made by regulations for excluding or restricting the liability to make payments in lieu of contributions in cases where a person serves at the same time in more than one employment, and for modifying the operation of any provision of this Act in relation to any such payment of which the amount is reduced by virtue of this subsection; and regulations may also modify the operation of subsection (4) of this section in cases where a person serves as aforesaid or would, apart from the regulations, be treated by virtue of that subsection as so serving.

(6) Where an insured person's period of service in a non-participating employment comes to an end otherwise than by his death, and at the end of it he is over pensionable age, then for the purpose of any liability to make a payment in lieu of contributions in respect of that service he shall be deemed to be assured at the end of it (in lieu of any pension benefits he then has) of the same pension benefits, save as provided by regulations under subsection (3) of this section, as those of which he would have been assured on the coming to an end of the service on his attaining pensionable age by his then retiring from the employment; and any question whether those benefits are equivalent pension benefits, and any question as to the amount of, or as to the graduated contributions attributable to, any payment in lieu of contributions, shall be determined as if the service had come to an end by his so retiring:

Provided that where the date for his retirement on pension under the recognised superannuation scheme relating to the employment is fixed by reference to his attaining that age and so as to fall not later than six months after he does so, but does not depend solely on age, this subsection shall apply as if he did not attain that age before that date.

(7) A payment in lieu of contributions shall become due at such time as may be prescribed after the end of the period of service to which it relates ; and if any person fails to make at or within the time prescribed for the purpose any such payment for which he is liable, he shall be liable to be proceeded against and punished under section 8(2) of this Act as for a failure so to make payment of a contribution.

(8) Section 14(1) of this Act shall apply to payments in lieu of contributions as it applies to contributions, and for the purposes of paragraph (c) of the said section 14(1) any such payment shall be deemed to be payable by an employer on behalf of the insured person in respect of whom it is payable.