Social Security Pensions Act 1975

Section 58.

SCHEDULE 3 Priority in Bankruptcy Etc

Earner's contributions to occupational pension scheme

1 Section 153 of the principal Act shall have effect as if the debts specified in subsection (2) of that section included 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 date of the relevant event or otherwise due in respect of earnings paid or payable in that period.

Employer's contributions to occupational pension scheme

2 (1) The said section 153 shall have effect as if the debts specified in subsection (2) of that section also included 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 date of the relevant event; 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.

(2) In so far as contributions cannot from the terms of the scheme be identified as falling within sub-paragraph (1) above, the amount of the debt having priority by virtue of that sub-paragraph shall be deemed 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.

(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.

State scheme premiums

3 (1) The said section 153 shall have effect as if the debts specified in subsection (2) of that section also included any sum owed on account of a state scheme premium payable at any time before, or in consequence of, the occurrence of the relevant event.

(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.

Interpretation

4 In this Schedule " the relevant event" has the meaning assigned to it by Schedule 18 to the principal Act in relation to section 153(2) of that Act; 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.