Social Security Pensions Act 1975

27 Contracted-out rates of Class 1 contributions. E+W+S

(1) Where the earnings paid to or for the benefit of an earner in any tax week are in respect of an employment which is contracted-out employment at the time of the payment, the amount of a Class 1 contribution shall be the aggregate of—

(a) the normal percentage of so much of the earnings paid in that week in respect of the employment as does not exceed the current lower earnings limit; and

(b) the contracted-out percentage of so much of those earnings as exceeds that limit but does not exceed the current upper earnings limit [F1 and

(c) in the case of a secondary Class 1 contribution, the normal percentage of so much of those earnings as exceeds the current upper earnings limit.]

(2) In subsection (1) above—

• “the normal percentage” means the percentage that would apply for the calculation of the amount of the contribution if the employment were not contracted-out employment;

• “the contracted-out percentage” means—

  (a)

  in the case of a primary Class 1 contribution, a percentage less by [F2 2·0] than the normal percentage;

  (b)

  in the case of a secondary Class 1 contribution, a percentage less by [F2 3·8] than the normal percentage.

(3) In the case of earners paid otherwise than weekly the references in subsection (1) above to the current lower or upper earnings limit shall be construed as references to the prescribed equivalents.

(4) [F3 Where—

(a) an earner has ceased to be employed in an employment; and

(b) earnings are paid to him or for his benefit within the period of 6 weeks, or such other period as may be prescribed, from the day on which he so ceased,

that employment]shall be treated for the purpose of subsection (1) above as contracted-out employment at the time when the earnings are paid if it was contracted-out employment in relation to the earner when he was last employed in it.

(5) This section shall not affect the amount of any primary Class 1 contribution which is payable at a reduced rate by virtue of regulations under [F4 section 19(4) of the Contributions and Benefits Act].

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F5

Textual Amendments

F1 Words added by Social Security Act 1985 (c. 53) Sch. 5, para. 17.

F2 Figures substituted by Social Security (Class 1 Contribution—Contracted-out Percentages) Order 1987, art. 2. (S.I. 1987/656). New figures of 1·8 and 3·0 are to be substituted, with effect from 6.4.1993, for 2·0 and 3·8 respectively by S.I. 1992/795, art. 2

F3 Words substituted (with effect from 6.4.1987) by Social Security Act 1986 (c. 50), Sch. 10, para. 13

F4 Words substituted (with effect from 1.7.1992) by Social Security (Consequential Provisions) Act 1992 (c. 6), Sch. 2, para. 21

F5 S. 27(6) repealed by Social Security Act 1989 (c. 24), Sch. 9. Repeal takes effect on 21.7.1989 by virtue of ss. 3 and 33(3)(a) and (g) Social Security Act 1989.