The Social Security (Earnings Factor) Regulations 1979

Regulation 2

SCHEDULE 1 RULES FOR THE ASCERTAINMENT OF EARNINGS FACTORS

[F1 PART I CLASS 1 CONTRIBUTIONS

Textual Amendments

F1 Sch. 1 Pt. I substituted (6.6.1991) by The Social Security (Earnings Factor) Amendment Regulations 1991 (S.I. 1991/1165), regs. 1, 3, Sch.

1.— (1) In this Part of this Schedule—

[F2 “Class 1 contributions” means primary Class 1 contributions paid or treated as paid on so much of a person’s earnings as do not exceed the current upper earnings limit or the prescribed equivalent if he is paid otherwise than weekly;]

[F2 “contracted-out contributions” means primary Class 1 contributions paid or treated as paid on so much of a person’s earnings in respect of any contracted-out employment as exceed the current lower earnings limit but do not exceed the current upper earnings limit or the prescribed equivalents if he is paid otherwise than weekly;]

“the standard level” in relation to any year means that year’s lower earnings limit for [F3 primary] Class 1 contributions multiplied by 50; and

each paragraph has effect subject to the provisions of all later paragraphs.

(2) Paragraphs 2, 3 and 4 below shall apply for the purposes specified in section 13(2) of the Act, and paragraph 5 below for the purposes of section 35 of the Social Security Pensions Act1975 (earner’s guaranteed minimum).

Textual Amendments

F2 Words in Sch. 1 para. 1(1) substituted (6.4.2003) by The Social Security (Earnings Factor) Amendment Regulations 2003 (S.I. 2003/608), regs. 1(1), 2(a) (with reg. 3)

F3 Word in Sch. 1 para. 1(1) inserted (6.4.2003) by The Social Security (Earnings Factor) Amendment Regulations 2003 (S.I. 2003/608), regs. 1(1), 2(b) (with reg. 3)

2.— (1) Subject to sub-paragraph (2) below, a person’s earnings fact or derived in respect of the year commencing on 6th April 1987, or any subsequent year, from—

(a) those of his earnings paid in that year upon which Class 1contributions have been paid or treated as paid in respect of that year, and

(b) earnings with which he has been credited in respect of that year,

• shall be equal to the amount of those actual and credited earnings.

(2) Any earnings factor ascertained under sub-paragraph (1) above shall be rounded down to the nearest whole pound.

3.   Where a person’s earnings paid in the year commencing on 6th April1987, or in any subsequent year, are earnings upon which Class 1 contributions have been paid or treated as paid in respect of that year and are, or are to be, recorded as separate sums in the records of the Department of Social Security, the earnings factor derived from those earnings shall be equal to the aggregate of the amounts ascertained by rounding down each sum separately to the nearest whole pound.

4.   Where Class 1 contributions have been paid or treated as paid in respect of the year commencing on 6th April 1987, or any subsequent year, upon a person’s earnings paid in that year and, but for this paragraph, the ascertainment of any earnings factor of his in respect of such year by the application of paragraphs 2 or 3 above would have the effect that—

(a) his earnings factor derived from those earnings, or

(b) the aggregate of his earnings factors derived from those earnings, and any earnings credited in respect of the same year, together with any derived from Class 2 or Class 3 contributions paid or credited in that year

• would fall short of—

  (i)

  the qualifying earnings factor, by an amount not exceeding £50, or

  (ii)

  the standard level, by an amount not exceeding £50, or

  (iii)

  one-half of the standard level, by an amount not exceeding £25,

• the amount of that earnings factor as so ascertained shall, for the purpose of section 13(2)(a) of the Act, be increased by the amount of the shortfall, and the amount resulting shall be rounded up to the nearest whole pound.

5.— (1) Subject to sub-paragraphs (2) and (3) below, a person’s earnings factor derived in respect of the year commencing on 6th April 1987, or any subsequent year, from those of his earnings in contracted-out employment upon which contracted-out contributions have been paid, or treated as paid, in respect of such year, shall be equal to the amount of those earnings.

(2) Any earnings factor ascertained under sub-paragraph (1) above shall be rounded down to the nearest whole pound.

(3) Where a person’s earnings paid in the year commencing on 6th April1987, or in any subsequent year, are earnings upon which contracted-out contributions have been paid or treated as paid in respect of that year and are, or are to be, recorded as separate sums in the records of the Department of Social Security, the earnings factor derived from those earnings shall be equal to the aggregate of the amounts ascertained by rounding down each sum separately to the nearest whole pound.]

PART II CLASS 2 AND CLASS 3 CONTRIBUTIONS

8.  Subject to the provisions of paragraph 9, the earnings factor derived from a person's Class 2 or Class 3 contributions, being in each case contributions actually paid or contributions paid or credited, in respect of any year shall be that year's lower earnings limit for Class 1 contributions multiplied by the number of the contributions from which the earnings factor is to be derived.

9.  Where any earnings factor ascertained by applying the rule contained in paragraph 8 above would not, but for this paragraph, be expressed as a whole number of pounds, it shall be so expressed by the rounding down of any fraction of a pound less than one-half and the rounding up of any other fraction of a pound.