Statutory Instruments
SOCIAL SECURITY
Made
26th March 2002
Coming into force
6th April 2002
Whereas the Treasury, as a result of carrying out in the tax year 2001–02 a review of the general level of earnings in Great Britain pursuant to section 141(1) and (2) of the Social Security Administration Act 1992(1) (“the Administration Act”), have determined that an Order should be made under that section amending Part 1 of the Social Security Contributions and Benefits Act 1992(2) by altering the amount of earnings below which an earner may be excepted from liability for Class 2 contributions, the amount of a Class 3 contribution and the lower and upper limits of profits or gains to be taken into account for Class 4 contributions:
And whereas the Treasury, with a view to adjusting the level at which the National Insurance Fund stands for the time being and having regard to the sums which may be expected to be paid from the Fund in the financial year ending 31st March 2003, think it expedient that an Order should be made under section 143(1) of the Administration Act(3), altering the secondary percentage for secondary Class 1 contributions:
And whereas this Order makes provision for Northern Ireland corresponding to that mentioned in the two preceding recitals, pursuant to section 129 of the Social Security Administration (Northern Ireland) Act 1992(4):
And whereas the Treasury, with a view to adjusting the level at which the National Insurance Fund stands for the time being and having regard to estimated benefit expenditure for the financial year ending 31st March 2003, think it expedient that an Order should be made under section 2(2) of the Social Security Act 1993 (“the 1993 Act”)(5):
And whereas the Treasury, with a view to adjusting the level at which the Northern Ireland National Insurance Fund stands for the time being and having regard to estimated benefit expenditure for the financial year ending 31st March 2003, think it expedient that an Order should be made under Article 4(3) of the Social Security (Northern Ireland) Order 1993 (“the 1993 Order”)(6):
And whereas a draft of the following Order was laid before Parliament in accordance with the provisions of sections 141(3) and 190(1) of the Administration Act, section 166(10A) of the Social Security Administration (Northern Ireland) Act 1992(7), section 2(8) of the 1993 Act and Article 4(8) of the 1993 Order and approved by resolution of each House of Parliament:
Now, therefore, the Treasury, in exercise of the powers conferred by sections 141(4) and (5), 142(2) and (3), 143(1) and (4), 144(2) and 189(3) of the Administration Act, sections 129 and 165 (11A) of the Social Security Administration (Northern Ireland) Act 1992(8), section 2(2) and (8) of the 1993 Act and Article 4(3) and (8) of the 1993 Order and now vested in them(9), and of all other powers enabling them in that behalf, hereby make the following Order:
1.—(1) This Order may be cited as the Social Security (Contributions) (Re-rating and National Insurance Funds Payments) Order 2002 and shall come into force on 6th April 2002.
(2) In this Order—
“the Act” means the Social Security Contributions and Benefits Act 1992;
“the Northern Ireland Act” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992(10).
2. In both section 9 of the Act(11) and section 9 of the Northern Ireland Act(12) (calculation of secondary Class 1 contributions) in subsection (2) for “11.9” (percentage rate) substitute “11.8”.
3. In both section 11 of the Act(13) and section 11 of the Northern Ireland Act(14) (Class 2 contributions) in subsection (4) (small earnings exception) for “£3,955” substitute “£4,025”.
4. In both section 13(1) of the Act(15) and section 13(1) of the Northern Ireland Act(16) (amount of a Class 3 contribution) for “£6.75” substitute “£6.85”.
5. In each of sections 15(3) and 18(1) of the Act(17) and sections 15(3) and 18(1) of the Northern Ireland Act(18) (Class 4 contributions recoverable under the Income Tax Acts and under regulations)—
(a)for “£4,535” (lower limit) in each place where it appears, substitute “£4,615”; and
(b)for “£29,900” (upper limit) substitute “£30,420”.
6. Section 2(2) of the Social Security Act 1993 (payments into the National Insurance Fund out of money provided by Parliament) shall have effect with respect to the tax year 2002–03 and the prescribed percentage of estimated benefit expenditure for the financial year ending with 31st March in that tax year shall be 2 per cent.
7. Article 4(3) of the Social Security (Northern Ireland) Order 1993 (payments into the Northern Ireland National Insurance Fund out of appropriated money) shall have effect with respect to the tax year 2002–03 and the prescribed percentage of estimated benefit expenditure for the financial year ending with 31st March in that tax year shall be 2 per cent.
Tony McNulty
Anne McGuire
Two of the Lords Commissioners of Her Majesty’s Treasury
26th March 2002
(This note is not part of the Order)
This Order reduces the rate of secondary Class 1 contributions, specified in section 9(2) of the Social Security Contributions and Benefits Act 1992 (“the Act”), from 11.9 per cent to 11.8 per cent. It increases from £3,955 to £4,025 the amount of earnings below which an earner may be excepted from liability for Class 2 contributions, specified in section 11(4) of the Act. It also amends the amount of a Class 3 contribution specified in section 13(1) of the Act from £6.75 to £6.85 (Articles 2 to 4).
The Order amends, from £4,535 to £4,615 and from £29,900 to £30,420 respectively, the lower and upper limits of profits or gains specified in sections 15(3) and 18(1) of the Act, between which Class 4 contributions are payable (Article 5).
Articles 2 to 5 of the Order also make provision for Northern Ireland corresponding to that in the preceding two paragraphs (the section numbers are the same in the Social Security Contributions and Benefits (Northern Ireland) Act 1992).
The Order provides for section 2(2) of the Social Security Act 1993 to have effect for the tax year 2002–03. It also provides that the amount of any money that may be provided by Parliament to be paid into the National Insurance Fund in that year shall not exceed in aggregate 2 per cent. of the estimated benefit expenditure for the financial year ending 31st March 2003 (Article 6). The Order also makes corresponding provision for Northern Ireland (Article 4(3) of the Social Security (Northern Ireland) Order 1993 being the provision brought into effect) (Article 7).
In accordance with sections 142(1) and 144(1) of the Social Security Administration Act 1992, a copy of the report by the Government Actuary (Cm. 5383) 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 9(2), 11(4), 13(1), 15(3) and 18(1) of the Act, was laid before Parliament with the draft of this Order.
This Order does not impose any new costs on business.
1992 c. 5; section 141(1) and (2) were amended by paragraph 44 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999 (c. 2).
Section 143(1) was amended by paragraph 90(1) of Schedule 7 to the Social Security Act 1998 (c. 14) and paragraph 46(2) of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999.
1992 c. 8; the relevant amendment to section 129 is paragraph 43 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999 (S.I. 1999/671).
1993 c. 3; section 2 was amended by paragraph 60 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999.
S.I. 1993/592 (N.I. 2); Article 4 was amended by paragraph 52 of Schedule 3 to S.I. 1999/671.
Section 166(10A) was inserted by paragraph 50(4) of Schedule 3 to S.I. 1999/671.
Section 165(11A) was inserted by paragraph 49(4) of Schedule 3 to S.I. 1999/671.
See paragraphs 44 to 46, 48, 57 and 60 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999 and paragraphs 43, 49, 50 and 52 of Schedule 3 to S.I. 1999/671.
Section 9 was substituted by paragraph 5 of Schedule 9 to the Welfare Reform and Pensions Act 1999 (c. 30), and the figure in subsection (2) was amended by Article 2 of S.I. 2001/477.
Section 9 was substituted by paragraph 5 of Schedule 10 to the Welfare Reform and Pensions Act 1999, and the figure in subsection (2) was amended by Article 2 of S.I. 2001/477.
Section 11 was amended by paragraph 12 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999, and the figure in subsection (4) was last amended by Article 3 of S.I. 2001/477.
Section 11 was amended by paragraph 13 of Schedule 3 to S.I. 1999/671 and the figure in subsection (4) was last amended by Article 3 of S.I. 2001/477.
Section 13 was amended by paragraph 14 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) Act 1999, and the figure in subsection (1) was last amended by Article 4 of S.I. 2001/477.
Section 13 was amended by paragraph 15 of Schedule 3 to S.I. 1999/671 and the figure in subsection (1) was last amended by Article 4 of S.I. 2001/477.