National Insurance Act 1965

Contributions.

2 Source of funds.

For the purpose of providing the funds required for paying benefit under this Act and for making any other payments which under this Act are to be made out of the National Insurance Fund, contributions shall be payable by insured persons, by employers and out of moneys provided by Parliament in accordance with sections 3 to 7 of this Act.

3 Flat-rate contributions by insured persons and employers.

Subject to the provisions of this Act—

(a) every employed person of any description set out in column 1 of Part I of Schedule 1 to this Act shall be liable to pay weekly contributions at the rate set out in relation to that description—

(i) unless his employment is a non-participating employment, in column 2 of the said Part I; or

(ii) if his employment is a non-participating employment, in column 3 of the said Part I;

(b) every employer of an employed person of any description set out in column 1 of Part II of the said Schedule 1, or of any person of any such description who is to be treated by virtue of the said Part II as an employed person, shall be liable to pay weekly contributions in respect of that person at the rate set out in relation to that description—

(i) unless that person's employment is a non-participating employment, in column 2 of the said Part II; or

(ii) if that person's employment is a non-participating employment, in column 3 of the said Part II;

(c) every self-employed person of any description set out in column 1 of Part III of the said Schedule 1 shall be liable to pay weekly contributions at the rate set out in relation to that description in column 2 of the said Part III;

(d) every non-employed person of any description set out in column 1 of Part IV of the said Schedule 1 shall be liable to pay weekly contributions at the rate set out in relation to that description in column 2 of the said Part IV.

4 Graduated contributions by employed persons and employers.

(1) Subject to the provisions of this Act, where in any income tax week there is made to or for the benefit of a person over the age of eighteen a payment on account of his remuneration in any one employment of an amount exceeding nine pounds (or the equivalent amount for remuneration not paid weekly), then if the employment was an employed contributor's employment and is not at the time of the payment a non-participating employment and that person either is under pensionable age or has not retired from regular employment—

(a) he shall be liable to pay a graduated contribution based on that payment; and

(b) his employer in the employment shall be liable to pay such a contribution in respect of him; and

(c) the amount of the graduated contribution payable by each of them shall be four and a quarter per cent. of the amount, up to nine pounds, by which that payment exceeds nine pounds (or of the equivalent amount for remuneration not paid weekly).

(2) In relation to graduated contributions, references in this Act to remuneration shall be taken to include, and to include only, any emoluments assessable to income tax under Schedule E (other than pensions), being emoluments from which tax under that Schedule is deductible, but shall apply to a payment of any such remuneration whether or not tax in fact falls to be deducted from that payment.

(3) Except in so far as regulations otherwise provide, the graduated contributions payable in any income tax week in respect of a person's remuneration shall be determined—

(a) by aggregating, and treating as a single payment of remuneration in one employment, all payments made in that week on account of remuneration in the same employment, or in any two or more employments under the same employer, except any employment such that graduated contributions are not payable in respect of it;

(b) by apportioning between the employments any single payment of remuneration in two or more employments under different employers, and (subject to the foregoing paragraph) treating as separate payments the parts apportioned to each employment.

(4) Where a person in any income tax year is paid remuneration from two or more employments, and the graduated contributions paid by him in respect of that remuneration exceed the prescribed amount, the excess—

(a) shall for the purposes of the powers conferred by section 14 of this Act be treated as representing contributions of the wrong class paid in error; and

(b) shall for the purpose of any right under this Act to benefit be treated as not properly payable.

(5) For the purpose of graduated contributions, any sums deducted (whether for contributions, for income tax or otherwise) from any payment of remuneration which is or would but for the deduction be made shall, except in so far as regulations otherwise provide, be treated as paid on account of the remuneration; and for the purpose aforesaid any payment of remuneration shall be disregarded in so far as it is directed by regulations to be treated as coming from sums comprised in a previous payment of remuneration or to be otherwise excluded from the computation of a person's remuneration.

(6) Provision shall be made by regulations for determining the graduated contributions payable where the whole or part of a person's remuneration in any employment is not paid weekly (and accordingly for determining the equivalent amounts mentioned in subsection (1) of this section), and may include provision for modifying subsection (3) of this section; and regulations may also, for the purpose of graduated contributions, make provision as to the intervals at which a person's remuneration or any part of it is to be treated as paid where it is not all paid at the same intervals of a week or longer and in the amounts due for those or for corresponding intervals.

(7) Regulations may also in relation to graduated contributions make provision—

(a) for calculating the amounts payable according to a prescribed scale or otherwise adjusting them so as to avoid fractional amounts or otherwise facilitate computation ; and

(b) for requiring that the liability in respect of a payment made in an income tax week, in so far as it depends on any conditions as to a person's age or retirement, shall be determined as at the beginning of the week or as at the end of it; and

(c) for securing that liability is not avoided or reduced by an employer following in the payment of persons employed any practice which is abnormal for their employments.

5 Automatic increases in contributions.

(1) Subject to subsection (2) of this section, in each of the three years 1970, 1975 and 1980 the rates of contribution payable by insured persons and employers shall be increased (for that and subsequent years) as follows:—

(a) beginning with the first Monday in April—

(i) an addition of fivepence per week shall be made to the rate of each contribution payable under section 3(a)(i) or (b)(i) of this Act or payable by a boy or girl under the age of eighteen under section 3(c) or (d) of this Act; and

(ii) an addition of tenpence per week shall be made to the rate of any other contribution payable under the said section 3 ; and

(b) beginning with 6th April, an addition of a quarter percent, shall be made to the rate at which graduated contributions are calculated on the relevant amount of remuneration.

(2) If the Minister with the consent of the Treasury by order so directs, the foregoing subsection shall have effect in relation to the increases to be made in any of the three years specified therein with the substitution for the references to fivepence, to tenpence and to a quarter of references to any less amounts specified by the order.

6 Variation of rates of flat-rate contributions to stabilise employment.

(1) Where it appears to the Treasury expedient so to do with a view to maintaining a stable level of employment, they may by order direct that contributions under section 3 of this Act, instead of being paid at the rates set out in Schedule 1 thereto, shall, for such periods as may be specified by or determined in accordance with the order, be paid at such higher or lower rates as may be so specified or determined, so, however, that an order under this section shall not provide for increasing or reducing the rate of any contribution as an employed person and the rate of the corresponding employer's contribution by different amounts.

(2) Contributions payable in accordance with any order under this section shall be deemed for the purposes of this Act to be contributions payable in accordance with the relevant provisions of the said section 3 and Schedule 1.

7 Exchequer supplements.

(1) Subject to the provisions of this Act, there shall be paid out of moneys provided by Parliament, in such manner and at such times as the Treasury may determine, for each of the following contributions, being contributions under section 3 of this Act, the amount (hereafter in this Act referred to as " the Exchequer supplement") hereinafter respectively specified, that is to say—

(a) for each contribution as an employed person of any description set out in column 1 of Part I of Schedule 1 to this Act, an amount equal to one quarter of the contribution for the time being set out in relation to that description in column 2 of the said Part I;

(b) for each contribution as the employer of an employed person of any description set out in column 1 of Part II of the said Schedule 1, or of any person of any such description who is to be treated by virtue of the said Part II as an employed person, an amount equal to one quarter of the contribution for the time being set out in relation to that description in column 2 of the said Part II;

(c) for each contribution as a self-employed or non employed person, an amount equal to one third of the contribution,

so, however, that the aggregate amount paid in any financial year for the Exchequer supplements in respect of contributions paid in that year shall not be less than one hundred and seventy million pounds.

(2) For the purposes of the foregoing subsection, the number of contributions of any class paid in any period shall be estimated in such manner as the Treasury may determine.