2017 No. 287
Social Security

The Social Security Revaluation of Earnings Factors Order 2017

Made
Laid before Parliament
Coming into force
In accordance with section 148(2) of the Social Security Administration Act 19921, the Secretary of State for Work and Pensions has reviewed the general level of earnings obtaining in Great Britain.
The Secretary of State has concluded, having regard to earlier orders made under section 1482 of that Act, that earnings factors3 for the relevant tax years have not, during the period taken into account for that review, maintained their value in relation to the general level of earnings.
The Secretary of State makes the following Order in exercise of the powers conferred by sections 148(3) and (4) and 189(1), (4) and (5) of the Social Security Administration Act 19924.

Citation and commencement1.

This Order may be cited as the Social Security Revaluation of Earnings Factors Order 2017 and shall come into force on 6th April 2017.

Revaluation of earnings factors2.

The earnings factors for tax years specified in the Schedule to this Order in so far as they are relevant—

(a)

to the calculation—

(i)

of the additional pension in the rate of any long-term benefit, or

(ii)

of any guaranteed minimum pension5; or

(b)

to any other calculation required under Part 3 of the Pension Schemes Act 19936 (including that Part as modified by or under any other enactment),

are directed to be increased for those tax years by the percentage of their amount shown opposite those tax years in that Schedule.

Rounding of fractional amounts3.

Where any earnings factor relevant to the calculation specified in article 2(a)(i), as increased in accordance with this Order, would not but for this article be expressed as a whole number of pounds, it shall be so expressed by rounding down any fraction of a pound less than one half and rounding up any other fraction of a pound.

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

Richard Harrington
Minister of State,
Department for Work and Pensions

SCHEDULEPercentage increase of earnings factor for specified tax years

Article 2

Tax year>

Percentage increase

1978-1979

794.1

1979-1980

689.2

1980-1981

559.3

1981-1982

452.2

1982-1983

401.5

1983-1984

365.7

1984-1985

331.2

1985-1986

304.5

1986-1987

271.4

1987-1988

245.8

1988-1989

218.1

1989-1990

187.1

1990-1991

167.6

1991-1992

143.0

1992-1993

128.2

1993-1994

117.3

1994-1995

110.8

1995-1996

101.9

1996-1997

96.4

1997-1998

87.1

1998-1999

78.8

1999-2000

71.6

2000-2001

61.5

2001-2002

55.3

2002-2003

48.9

2003-2004

43.7

2004-2005

38.4

2005-2006

33.0

2006-2007

28.6

2007-2008

23.5

2008-2009

18.6

2009-2010

15.0

2010-2011

13.6

2011-2012

11.1

2012-2013

9.1

2013-2014

7.2

2014-2015

6.2

2015-2016

4.7

2016-2017

2.6

EXPLANATORY NOTE
(This note is not part of the Order)

This Order is made following a review under section 148 (revaluation of earnings factors) of the Social Security Administration Act 1992 (c. 5).

This Order applies to the earnings factors relevant to the calculation of additional pension in any long term benefit (in practice, now relevant only to the calculation of inherited additional pension), or of any guaranteed minimum pension or to any other calculation required under Part 3 of the Pension Schemes Act 1993 (c. 48). The Order provides that these earnings factors are to be increased for the tax years specified in the Schedule to the Order by the percentage of their amount specified in that Schedule.

The percentages specified in this Order for the tax years from and including 2000 – 2001 are also used in the revaluing of state scheme pension debits and credits in accordance with sections 13 and 14 of, and paragraphs 2(6) of Schedule 8 and 2(6) of Schedule 10 to, the Pensions Act 2014 (c. 19). The percentage specified for 2015 – 2016 is used to increase flat rate accrual amounts of additional pension in accordance with paragraphs 4(2), 8(4) and 9(4) of Schedule 4B to the Social Security Contributions and Benefits Act 1992 (c. 4).

The percentage specified for the tax year 2016 – 2017 is 2.6%. The percentages for earlier tax years have been increased so that the earnings factors for those years are revalued at 2016 – 2017 earning levels. For the tax year 2016 – 2017, the percentage specified in this Order is only relevant for the revaluation of state scheme debits and credits. This is because accruals of additional pension ended with the introduction of the new state pension on 6th April 2016, and it is not necessary to specify a percentage for calculations under Part 3 of the Pension Schemes Act 1993 for tax years after 2015 – 2016.

This Order also provides for rounding fractional amounts for earnings factors relevant to the calculation of the additional pension in the rate of any long-term benefit. By virtue of section 23(2) of the Social Security Contributions and Benefits Act 1992, rounding is not required for the purpose of the calculation of any guaranteed minimum pension.

A full impact assessment has not been produced for this instrument as it has no new impact on business or civil society organisations.