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Social Security Contributions (Transfer of Functions, etc.) Act 1999

Summary

4.At present, the Contributions Agency (CA), an executive agency of the DSS, is responsible for the operational functions of collecting and recording National Insurance contributions (“contributions”) which are paid into the National Insurance Fund (NIF). Payment of contributions gives entitlement to contributory benefits. CA also carries out the operational functions in relation to contracting-out of the State Earnings-Related Pensions Scheme (SERPS), Statutory Sick Pay (SSP) and Statutory Maternity Pay (SMP). These functions will be carried out by the Inland Revenue from the day appointed for the operational transfer.

5.The DSS currently has policy responsibility for SSP, SMP, SERPS and for contributions.

6.The Chancellor of the Exchequer announced in his Budget speech on 17 March 1998 that the CA and its operational functions would transfer from the DSS to the Inland Revenue in April 1999 (Hansard vol. 308, cols 1097 – 1189). It was also announced that policy responsibility for contributions would transfer to the Inland Revenue once decisions had been reached on a new benefit entitlement test. Control and management of the NIF will also move to the Inland Revenue.

7.The Act effects these transfers.

8.The Act makes a number of changes to social security and other legislation as it relates to functions transferred by the Act, in particular by bringing appeals about contributions, SSP and SMP within the jurisdiction of the General and Special Commissioners for Income Tax, who hear tax appeals. Although operational functions in respect of contracting-out of SERPS will transfer to the Inland Revenue, policy responsibility will remain with the Secretary of State. Similarly, policy responsibility for SSP and SMP will remain with the Secretary of State, while operational functions will transfer to the Inland Revenue. Appeals concerning issues where the policy responsibility remains with DSS other than SSP and SMP (i.e. contracting-out matters, credits and home responsibilities protection) will be heard by the new unified appeals tribunals to be set up under Chapter I of Part I of the Social Security Act 1998 (SSA).

9.In addition the Act corrects a defect in the legislation which governs the financing of National Insurance rebates for contracted-out occupational money purchase pension schemes. It represents a technical amendment in relation to Government accounting mechanisms, and does not affect individuals in, or employers running, occupational pension schemes.

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Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

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