Social Security Pensions Act 1975

Section 58.

SCHEDULE 3 E+W+S Priority in Bankruptcy Etc.

Earner’s contributions to occupational pension scheme E+W+S

1 [F1 This Schedule applies to] any sum owed on account of an earner’s contributions to an occupational pension scheme, being contributions deducted from earnings paid in the period of four months immediately preceding the [F2 relevant date] or otherwise due in respect of earnings paid or payable in that period.

Textual Amendments

F1 Words substituted (with effect from 29.12.1986) by Insolvency Act 1985 (c. 65), Sch. 8, para. 26(2)

F2 Words substituted (with effect from 29.12.1986) by Insolvency Act 1985 (c. 65), Sch. 8, para. 26(3)

Employer’s contributions to occupational pension scheme E+W+S

2 (1) [F3 This Schedule applies to] any sum owed on account of an employer’s contributions to a contracted-out scheme, being contributions payable—

(a) in the period of twelve months immediately preceding the [F4 relevant date]; and

(b) in respect of earners in contracted-out employment by reference to the scheme towards the provision for those earners of guaranteed minimum pensions under the scheme.

[F5 (1A) This Schedule applies to any sum owed on account of an employer’s minimum payments to a contracted-out scheme falling to be made in the period of twelve months immediately preceding the relevant date.]

(2) In so far as contributions [F6 or payments] cannot from the terms of the scheme be identified as falling within sub-paragraph (1) [F6 or (1A)] above, the amount of the debt having priority by virtue of that sub-paragraph shall be deemed [F7 , in a case where the relevant event took place before the day of the passing of the Social Security Act 1985,] to be an amount equal to—

(a) 7 per cent. of the total reckonable earnings paid or payable, in the period of twelve months referred to in that sub-paragraph, to or for the benefit of non-contributing earners; or

(b) 4·5 per cent. of the total reckonable earnings paid or payable in that period to or for the benefit of contributing earners.

[F6 and shall be deemed, [F8 in any other case], to be an amount equal to—

(i) [F9 4.8] per cent. of the total reckonable earnings mentioned in paragraph (a) above; and

(ii) [F9 3.0] per cent. of the total reckonable earnings mentioned in paragraph (b) above; and]

(3) For the purposes of sub-paragraph (2) above—

(a) the earnings to be taken into account as reckonable earnings are those paid or payable to or for the benefit of earners in contracted-out employment (by reference to the scheme) in the whole or any part of the said period of twelve months; and

(b) earners are to be identified as contributing or non-contributing in relation to service of theirs in contracted-out employment by reference to the scheme according to whether or not in the period in question they were liable under the terms of the scheme to contribute in respect of that service towards the provision of pensions under the scheme.

(4) In this paragraph “employer” shall be construed in accordance with regulations made under section 66(3) of this Act and “reckonable earnings”, in relation to any employment, means the earner’s earnings from that employment so far as those earnings—

(a) were comprised in any payment of earnings made to him or for his benefit at a time when the employment was contracted-out employment; and

(b) exceeded the current lower earnings limit but not the current upper earnings limit.

Textual Amendments

F3 Words substituted (with effect from 29.12.1986) by Insolvency Act 1985 (c. 65), Sch. 8, para. 26(2)

F4 Words substituted (with effect from 29.12.1986) by Insolvency Act 1985 (c. 65), Sch. 8, para. 26(3)

F5 Sch. 3 para. 2(1A) inserted (with effect from 6.4.1988) by Social Security Act 1986 (c. 50), Sch. 2, para. 12(a)

F6 Words inserted (with effect from 6.4.1988) by Social Security Act 1986 (c. 50), Sch. 2, para. 12(b)

F7 Words inserted by Social Security Act 1985 (c. 53), s. 29(1), Sch. 5 para. 36

F8 Words substituted (with effect from 29.12.1986) by Insolvency Act 1985 (c. 65), Sch. 8, para. 26(4)

F9 Figures in Sch. 3 para. 2(2) substituted, in relation to earnings from 6.4.1993, for figures of 5.8 and 3.8, by virtue of S.I. 1992/795, arts. 3(a)(b).

State scheme premiums E+W+S

3 (1) [F10 This Schedule applies to] any sum owed on account of a state scheme premium payable at any time before, or in consequence of, [F11 a person going into liquidation or being adjudged bankrupt][F12 the sequestration of a debtor’s estate][F13 or (in the case of a company not in liquidation)—

(a) the appointment of a receiver as mentioned in section 40 of the Insolvency Act 1986 (debenture-holders secured by floating charge), or

(b) the appointment of a receiver under section 53(6) or 54(5) of that Act (Scottish company with property subject to floating charge), or

(c) the taking of possession by debenture-holders (so secured) as mentioned in section 196 of the Companies Act 1985].

(2) Where any such premium is payable in respect of a period of service of more than twelve months (taking into account any previous linked qualifying service), the amount to be paid in priority by virtue of this paragraph shall be limited to the amount of the premium that would have been payable if the service had been confined to the last twelve months taken into account in fixing the actual amount of the premium.

(3) Where—

(a) by virtue of this paragraph the whole or part of a premium is required to be paid in priority to other debts of the debtor or his estate; and

(b) the person liable for the payment would be entitled to recover the whole or part of any sum paid on account of it from another person either under section 47 of this Act or under any provision made by the relevant scheme for the purposes of that section or otherwise,

that other person shall be liable for any part of the premium for the time being unpaid; but so that no person shall be liable by virtue of this sub-paragraph for an amount in excess of the sum which might thereunder be recovered from him if the premium had been paid in full by the person liable for it, after deducting from that sum any amount which has been or may be recovered from him in respect of any part of that payment paid otherwise than under this sub-paragraph.

(4) The payment under sub-paragraph (3) above of any amount in respect of a premium shall have the same effect on the rights and liabilities of the person making it (other than his liabilities under that sub-paragraph) as if it had been a payment of that amount on account of the sum recoverable from him in respect of a premium as mentioned in sub-paragraph (3)(b) above.

Textual Amendments

F10 Words substituted (with effect from 29.12.1986) by Insolvency Act 1985 (c. 65), Sch. 8, para. 26(2)

F11 Words substituted (with effect from 29.12.1986) for company insolvency in Great Britain and for Bankruptcy in England and Wales, by Insolvency Act 1985 (c. 65), Sch. 8 para. 26(3)

F12 Words substituted (with effect from 29.12.1986) for bankruptcy in Scotland, by Bankruptcy (Scotland) Act 1985 (c. 66), Sch. 7, para. 13(i)

F13 Words added (with effect from 29.12.1986) by Insolvency Act 1986 (c. 45), Sch. 14

Interpretation E+W+S

4 [F14 Section 196(3) of the Companies Act 1985 and section 387 of Insolvency Act 1986 apply as regards the meaning in this Schedule of the expression “the relevant date”][F15 In this Schedule “the relevant date” has the same meaning as in Part I of Schedule 3 to the Bankruptcy (Scotland) Act 1985]; and references to a contracted-out scheme, contracted-out employment and a state scheme premium include references to a contracted-out scheme, contracted-out employment and a state scheme premium within the meaning of any provisions in force in Northern Ireland and corresponding to the provisions of this Act.

Textual Amendments

F14 Words substituted (with effect from 29.12.1986) for company insolvency in Great Britain and for bankruptcy in England and Wales only, by Insolvency Act 1986 (c. 45), Sch. 14

F15 Words applying, for the purposes of sequestration of a debtor's estate in Scotland, following substitution (with effect from 29.12.1986) of words by Insolvency Act 1985 (c. 65), Sch. 8, para. 26(5) and further amendment (also with effect from 29.12.1986), by Bankruptcy (Scotland) Act 1985 (c. 66), Sch. 7, para. 13(ii)