The Social Security (Contributions) (Re-rating) Order 1990

Explanatory Note

(This note is not part of the Order)

This Order provides for matters in respect of which the Social Security (Contributions and Allocation of Contributions) (Re-rating) Order 1989 (S.I.1989/26) contained provisions.

This Order increases the amounts of weekly earnings specified in the secondary earnings brackets in section 4(6E) of the Social Security Act 1975 (“the Act”), determining the appropriate percentage rate at which Class 1 contributions are payable under that Act (article 2).

The increases in respect of Bracket 1 are from £74.99 to £79.99, in respect of Bracket 2 from £75.00 and £114.99 to £80.00 and £124.99, in respect of Bracket 3 from £115.00 and £164.99 to £125.00 and £174.99 and in respect of Bracket 4, from £165.00 to £175.00.

The Order increases the rates of Class 2 and Class 3 contributions payable under the Act from £4.25 to £4.55 and from £4.15 to £4.45 respectively (articles 3(a) and 4).

It increases from £2,350 to £2,600 the amount of earnings below which an earner may be excepted from liability for Class 2 contributions (article 3(b)).

It also increases, from £5,050 to £5,450 and from £16,900 to £18,200, the lower and upper limits of profits or gains between which Class 4 contributions are payable (article 5).

In accordance with sections 121(1) and 123A(6A) of the Act, a copy of the report by the Government Actuary (Cm 948), giving his opinion on the likely effect on the National Insurance Fund of the making of the Order in so far as it amends sections 4(6E), 7, 8(1), 9(2) and 10(1) of the Act, was laid before Parliament with a draft of this Order.