2011 No. 477

Social Security

The Social Security Pensions (Low Earnings Threshold) Order 2011

Made

Laid before Parliament

Coming into force

In accordance with section 148A (revaluation of low earnings threshold) of the Social Security Administration Act 19921, the Secretary of State has reviewed the general level of earnings obtaining in Great Britain.

It appears to the Secretary of State that the general level of earnings has increased during the review period.

The Secretary of State makes the following Order in exercise of the powers conferred on him by section 148A of the Social Security Administration Act 1992.

Citation and commencement1

This Order may be cited as the Social Security Pensions (Low Earnings Threshold) Order 2011 and shall come into force on 6th April 2011.

Low earnings threshold2

For the purposes of the Social Security Contributions and Benefits Act 19922, it is directed that the low earnings threshold3 for the tax years following the tax year 2010 – 2011 shall be £14,400.

Signed by authority of the Secretary of State for Work and Pensions.

Steve WebbMinister of State,Department for Work and Pensions
EXPLANATORY NOTE

(This note is not part of the Order)

The low earnings threshold is the amount by reference to which the surplus earnings bands are determined for the purpose of calculating the additional pension (the state second pension) in a state retirement pension.

This Order is made following a review by the Secretary of State under section 148A (revaluation of low earnings threshold) of the Social Security Administration Act 1992 (c. 5) of the general level of earnings in Great Britain with a view to determining whether, and if so by how much, the amount of the low earnings threshold for the purposes of the Social Security Contributions and Benefits Act 1992 (c. 4) should be increased for future tax years.

As a result of that review, it appears to the Secretary of State that the general level of such earnings during the period from 1st October 2009 to 30th September 2010 has increased by 2.3%. That figure is based on the measure of Average Weekly Earnings, which has replaced the Average Earnings Index as the lead measure of short term changes in average earnings in Great Britain.

This Order directs that the low earnings threshold for the tax years following 2010 – 2011 shall be £14,400. The threshold for the tax year 2010 – 2011 was directed to be £14,100 by virtue of the Social Security Pensions (Low Earnings Threshold) Order 2010 (S.I. 2010/468).

A full impact assessment has not been produced for this instrument as it has no new impact on the private or voluntary sectors.