SOCIAL SECURITY ACT 1986

An Act to make provision in relation to personal pension schemes, to amend the law relating to social security, occupational pension schemes ...to abolish maternity pay under the Employment Protection (Consolidation) Act 1978 and provide for the winding-up of the Maternity Pay Fund, to empower the Secretary of State to pay the travelling expenses of certain persons, and for connected purposes [25th July 1986]

Part I
PENSIONS

1-5. repealed by 1993 c.48

Occupational pension schemes

6. repealed by 1993 c.48

7. - Schemes becoming contracted-out between 1986 and 1993.  

(1) Subject to subsection (3) below and except in such cases as may be prescribed, where an occupational pension scheme becomes a contracted-out scheme under Part III of the Social Security Pensions Act 1975 during the period beginning on 1st January 1986 and ending on 5th April 1993, having not previously been contracted-out during any part of that period, the [Commissioners of Inland Revenue¹] shall make in relation to any tax week falling within the period beginning on 6th April 1988 and ending on 5th April 1993 a payment under this section in respect of each earner who is in employment which-

(a) is contracted-out by reference to the scheme during that tax week; and
(b) has not previously been contracted-out employment by reference to any other scheme during any part of the period beginning on 1st January 1986 and ending on 5th April, 1993.

(2) The [Commissioners of Inland Revenue¹] shall make a payment under this section to the trustees or managers of the scheme except that in such circumstances as may be prescribed [the Commissioners²] shall make such a payment to a prescribed person.
(3) A payment under this section shall not be made unless the prescribed person makes a claim for it in such manner and form, and at such time or within each period, as may be prescribed.
(4) The amount of a payment under this section in respect of a tax week is-

(a) 2 per cent, of so much of any earnings paid to or for the benefit of the earner in respect of the employment which is contracted-out by reference to the scheme in the tax week as exceeds the lower earnings limit for that week but does not exceed the upper earnings limit for it; or
(b) if 2 per cent, of any such earnings is less than £1.00, £1.00.

(5) The references to the upper and lower earnings limits in subsection (4) above are references, in the case of an earner who is paid otherwise than weekly, to their prescribed equivalents under [sections 6(1) and 8(3) of the Social Security Contributions and Benefits Act 1992³].
(6) Regulations may make provision-

(a) for earnings to be calculated or estimated in such manner and on such basis as may be prescribed for the purpose of determining whether any, and if so what, payments under this section are to be made in respect of them;
(b) for the adjustment of amounts which would otherwise be the amounts of payments under this section so as to avoid the payment of fractional amounts:
(c) for the intervals at which, for the purposes of payments under this section, payments of earnings are to be treated as made;
(d) for this section to have effect, in prescribed cases, as if for any reference to a tax week there were substituted a reference to a prescribed period and as if in any case so prescribed for the references to £1.00 in subsection (4)(b) above there were substituted references to such other sum as may be prescribed; and
(e) as to the manner in which, and time at which or period within which, payments under this section are to be made.

(7) Where in the case of a scheme a payment has been made under this section in relation to an earner-

(a) if a premium is paid under section 42 of the Social Security Pensions Act 1975 in relation to him, the amount of the premium shall be increased by the amount of the payment; and
(b) if a premium is paid under section 44 or 44A of that Act in relation to him, the amount of the premium shall be increased by the amount of the payment and by a further amount representing interest on the payment and calculated in accordance with regulations.

(8) If the [Commissioners of Inland Revenue make⁴] a payment under this section which [they are⁴] not required to make, [they may⁴] recover the amount of the payment from the person to whom [they paid⁴] it, or from any person in respect of whom [they paid⁴] it.
(9) If [Commissioners of Inland Revenue make⁵] in respect of an earner a payment under this section which [they are⁵] required to make, but [do⁵] not make it to the trustees or managers to whom [they are⁵] required to make it, [they may⁵] recover the amount of the payment from the person to whom [they paid⁵] it or from the earner.]

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Part VII
MISCELLANEOUS, GENERAL AND SUPPLEMENTARY
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Supplementary