House of Lords - Explanatory Note
Welfare Reform And Pensions Bill - continued          House of Lords

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ANNEX B: FAMILY LAW (SCOTLAND) ACT 1985, AS AMENDED

This extract shows the text of sections 8 to 27 of the Family Law (Scotland) Act as amended by this Bill. It has no authoritative status. Text to be inserted by Bill appears in bold italics; text to be removed appears struck out. Refer to the commentary on Parts III and IV (pension sharing on divorce) for details.

--- Financial provision on divorce, etc.

Orders for financial provision

8.- (1) In an action for divorce, either party to the marriage may apply to the court for one or more of the following orders-

(a) an order for the payment of a capital sum to him by the other party to the marriage;

(aa) an order for the transfer of property to him by the other party to the marriage;

(b) an order for the making of a periodical allowance to him by the other party to the marriage;

(ba) an order under section 12A(2) or (3) of this Act;

(baa) a pension sharing order

(c) an incidental order within the meaning of section 14(2) of this Act.

(2) Subject to sections 12 to 15 of this Act, where an application has been made under subsection (1) above, the court shall make

such order, if any, as is-

(a) justified by the principles set out in section 9 of this Act; and

(b) reasonable having regard to the resources of the parties.

(3) An order under subsection (2) above is in this Act referred to as an "order for financial provision".

(4) The court may not-

(a) when making an order under subsection (1) above, make both a pension sharing order and an order under section 12A(2) or (3) of this Act in relation to the same pension arrangement ; nor

(b) make a pension sharing order in relation to the rights of a person under a pension arrangement if there is in force an order under section12A(2) or (3) of this Act which relates to benefits or future benefits to which he is entitled under the pension arrangement. Pension sharing orders: apportionment of charges

8A. If a pension sharing order relates to rights under a pension arrangement , the court may include in the order provision about the apportionment between the parties of any charge under section 33 of the Welfare Reform and Pensions Act 1999 (charges in respect of pension sharing costs) or under corresponding Northern Ireland legislation.

Principles to be applied.

9.- [This section is not amended by the Bill.]

Sharing of value of matrimonial property

10.- (1) In applying the principle set out in section 9(1)(a) of this Act, the net value of the matrimonial property shall be taken to be shared fairly between the parties to the marriage when it is shared equally or in such other proportions as are justified by special circumstances.

(2) The net value of the matrimonial property shall be the value of the property at the relevant date after deduction of any debts incurred by the parties or either of them-

(a) before the marriage so far as they relate to the matrimonial property, and

(b) during the marriage,

which are outstanding at that date.

(3) In this section "the relevant date" means whichever is the earlier of-

(a) subject to subsection (7) below, the date on which the parties ceased to cohabit;

(b) the date of service of the summons in the action for divorce.

(4) Subject to subsection (5) below, in this section and in section 11 of this Act "the matrimonial property" means all the property belonging to the parties or either of them at the relevant date which was acquired by them or him (otherwise than by way of gift or succession from a third party)-

(a) before the marriage for use by them as a family home or as furniture or plenishings for such home; or

(b) during the marriage but before the relevant date.

(5) The proportion of any rights or interests of either party

(a) under a life policy or similar arrangement; and

(b) in any benefits under a pension scheme arrangement which either party has or may have (including such benefits payable in respect of the death of either party), which is referable to the period to which subsection (4)(b) above refers shall be taken to form part of the matrimonial property.

(6) In subsection (1) above "special circumstances", without prejudice to the generality of the words, may include-

(a) the terms of any agreement between the parties on the ownership or division of any of the matrimonial property;

(b) the source of the funds or assets used to acquire any of the matrimonial property where those funds or assets were not derived from the income or efforts of the parties during the marriage;

(c) any destruction, dissipation or alienation of property by either party;

(d) the nature of the matrimonial property, the use made of it (including use for business purposes or as a matrimonial home) and the extent to which it is reasonable to expect it to be realised or divided or used as security;

(e) the actual or prospective liability for any expenses of valuation or transfer of property in connection with the divorce.

(7) For the purposes of subsection (3) above no account shall be taken of any cessation of cohabitation where the parties thereafter resumed cohabitation, except where the parties ceased to cohabit for a continuous period of 90 days or more before resuming cohabitation for a period or periods of less than 90 days in all.

(8) The Secretary of State may by regulations make provision-

(a) for the value of any benefits under a pension scheme to be calculated and verified, for the purposes of this Act, in a prescribed manner;

(b) for the trustees or managers of any pension scheme to provide, for the purposes of this Act, information as to that value, and for the recovery of the administrative expenses of providing such information from either party, and regulations made by virtue of paragraph (a) above may provide for that value to be calculated and verified in accordance with guidance which is prepared and from time to time revised by a prescribed body and approved by the Secretary of State.

(8) The Secretary of State may by regulations make provision-

(a) about calculation and verification in relation to the valuation for the purposes of this Act of benefits under a pension arrangement or relevant state scheme rights;

(b) about calculation and verification in relation to the valuation for the purposes of this Act of shareable rights under a pension arrangement or shareable state scheme rights;

(c) imposing on the person responsible for a pension arrangement, or on the Secretary of State, requirements with respect to the supply of information for the purposes of this Act, and for the recovery of administrative expenses of providing such information from either party.

(8A) Regulations under subsection (8)(a) above may include-

(a) provision for calculation and verification in accordance with guidance from time to time prepared by a prescribed person; and

(b) provision by reference to regulations under section 22 or 41(4) of the Welfare Reform and Pensions Act 1999.

(9) Regulations under subsection (8) above may make different provision for different purposes and shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(10) In this section-

"benefits under a pension scheme" includes any benefits by way of pension, whether under a pension scheme or not;

"pension scheme" means-

(a) an occupational pension scheme or a personal pension scheme (applying the definitions in section 1 of the Pension Schemes Act 1993, but as if the reference to employed earners in the definition of "personal pension scheme" were to any earners);

(b) a retirement annuity contract; or

(c) an annuity, or insurance policy, purchased or transferred for the purpose of giving effect to rights under a pension scheme falling within paragraph (a) above; and

"prescribed" means prescribed by regulations.

(11) In this section, references to the trustees or managers of a pension scheme-

(a) in relation to a contract or annuity referred to in paragraph (b) or (c) of the definition of "pension scheme" in subsection (10) above, shall be read as references to the provider of the annuity;

(b) in relation to an insurance policy referred to in paragraph (c) of that definition, shall be read as a reference to the insurer.

Factors to be taken into account.

11.- [This section is not amended by the Bill.]

Orders for payment of capital sum or transfer of property

12.- [This section is not amended by the Bill.]

Orders for payment of capital sum: pensions lump sums

12A.- (1) This section applies where the court makes an order under section 8(2) of this Act for payment of a capital sum (a "capital sum order") by a party to the marriage ("the liable party") in circumstances where-

(a) the matrimonial property within the meaning of section 10 of this Act includes any rights or interests in benefits under a pension scheme arrangement which the liable party has or may have (whether such benefits are payable to him or in respect of his death); and

(b) those benefits include a lump sum payable to him or in respect of his death.

(2) Where the benefits referred to in subsection (1) above include a lump sum payable to the liable party, the court, on making the capital sum order, may make an order requiring the trustees or managers of the pension scheme person responsible for the pension arrangement in question to pay the whole or part of that sum, when it becomes due, to the other party to the marriage ("the other party").

(3) Where the benefits referred to in subsection (1) above include a lump sum payable in respect of the death of the liable party, the court, on making the capital sum order, may make an order-

(a) if the trustees or managers of the pension scheme person responsible for the pension arrangement in question have has power to determine the person to whom the sum, or any part of it, is to be paid, requiring them to pay the whole or part of that sum, when it becomes due, to the other party;

(b) if the liable party has power to nominate the person to whom the sum, or any part of it, is to be paid, requiring the liable party to nominate the other party in respect of the whole or part of that sum;

(c) in any other case, requiring the trustees or managers of the pension scheme person responsible for the pension arrangement in question to pay the whole or part of that sum, when it becomes due, to the other party instead of to the person to whom, apart from the order, it would be paid.

(4) Any payment by the trustees or managers person responsible for the pension arrangement under an order under subsection (2) or (3) above-

(a) shall discharge so much of the trustees' or managers' liability liability of the person responsible for the pension arrangement to or in respect of the liable party as corresponds to the amount of the payment; and

(b) shall be treated for all purposes as a payment made by the liable party in or towards the discharge of his liability under the capital sum order.

(5) Where the liability of the liable party under the capital sum order has been discharged in whole or in part, other than by a payment by the trustees or managers person responsible for the pension arrangement under an order under subsection (2) or (3) above, the court may, on an application by any person having an interest, recall any order under either of those subsections or vary the amount specified in such an order, as appears to the court appropriate in the circumstances.

(6) Where-

(a) an order under subsection (2) or (3) above imposes any requirement on the trustees or managers of person responsible for a pension scheme arrangement ("the first scheme

arrangement") and the liable party acquires transfer credits under another scheme arrangement ("the new scheme arrangement") which are derived (directly or indirectly) from a transfer from the first scheme arrangement of all his accrued rights under that scheme arrangement and

(b) the trustees or managers of person responsible for the new scheme arrangement has been given notice in accordance with regulations under subsection (8) below,

the order shall have effect as if it had been made instead in respect of the person responsible for the new scheme arrangement; and in this subsection "transfer credits" has the same meaning as in the Pension Schemes Act 1993.

(7) Without prejudice to subsection (6) above, the court may, on an application by any person having an interest, vary an order under subsection (2) or (3) above by substituting for the trustees or managers person responsible for the pension arrangement specified in the order the trustees or managers of person responsible for any other pension scheme arrangement under which any lump sum referred to in subsection (1) above is payable to the liable party or in respect of his death.

(8) The Secretary of State may by regulations-

(a) require notices to be given in respect of changes of circumstances relevant to orders under subsection (2) or (3) above;

(b) make provision for the recovery of the administrative expenses of complying with such orders from the liable party or the other party.

(9) Regulations under subsection (8) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(10) Subsection (10) (other than the definition of "benefits under a pension scheme") and subsection (11) of section 10 of this Act shall apply for the purposes of this section as those subsections apply for the purposes of that section.

(10) The definition of "benefits under a pension scheme" in section 27 of this Act does not apply to this section.

Orders for periodical allowance.

13. (1) An order under section 8(2) of this Act for a periodical allowance may be made-

(a) on granting decree of divorce;

(b) within such period as the court on granting decree of divorce may specify; or

(c) after decree of divorce where-

(i) no such order has been made previously;

(ii) application for the order has been made after the date of decree; and

(iii) since the date of decree there has been a change of circumstances.

(2) The court shall not make an order for a periodical allowance under section 8(2) of this Act unless-

(a) the order is justified by a principle set out in paragraph (c), (d) or (e) of section 9(1) of this Act; and

(b) it is satisfied that an order for payment of a capital sum or for transfer of property, or a pension sharing order, under that section would be inappropriate or insufficient to satisfy the requirements of the said section 8(2).

(3) An order under section 8(2) of this Act for a periodical allowance may be for a definite or an indefinite period or until the happening of a specified event.

(4) Where an order for a periodical allowance has been made under section 8(2) of this Act, and since the date of the order there has been a material change of circumstances, the court shall, on an application by or on behalf of either party to the marriage or his executor, have power by subsequent order-

(a) to vary or recall the order for a periodical allowance;

(b) to backdate such variation or recall to the date of the application therefor or, on cause shown, to an earlier date;

(c) to convert the order into an order for payment of a capital sum or for a transfer of property.

(5) The provisions of this Act shall apply to applications and orders under subsection (4) above as they apply to applications for periodical allowance and orders on such applications.

(6) Where the court backdates an order under subsection (4)(b) above, the court may order any sums paid by way of periodical allowance to be repaid.

(7) An order for a periodical allowance made under section 8(2) of this Act-

(a) shall, if subsisting at the death of the party making the payment, continue to operate against that party's estate, but without prejudice to the making of an order under subsection (4) above;

(b) shall cease to have effect on the remarriage or death of the party receiving payment, except in relation to any arrears due under it.

Incidental orders.

14.- [This section is not amended by the Bill.]

Rights of third parties.

15.- [This section is not amended by the Bill.]

Agreements on financial provision.

16.- (1) Where the parties to a marriage have entered into an agreement as to financial provision to be made on divorce, the court may make an order setting aside or varying-

(a) any term of the agreement relating to a periodical allowance where the agreement expressly provides for the subsequent setting aside or variation by the court of that term; or

(b) the agreement or any term of it where the agreement was not fair and reasonable at the time it was entered into.

(2) The court may make an order-

(a) under subsection (1)(a) above at any time after granting decree of divorce; and

(b) under subsection (1)(b) above on granting decree of divorce or within such time thereafter as the court may specify on granting decree of divorce.

(b) under subsection (1)(b) above, if the agreement does not contain a term relating to pension sharing, on granting decree of divorce or within such time as the court may specify on granting decree of divorce; or

(c) under subsection (1)(b) above, if the agreement contains a term relating to pension sharing-

(i) where the order sets aside the agreement or varies the term relating to pension sharing, on granting decree of divorce; and

(ii) where the order sets aside or varies any other term of the agreement, on granting decree of divorce or within such time thereafter as the court may specify on granting decree of divorce.

(2A) In subsection (2) above, a term relating to pension sharing is a term corresponding to provision which may be made in a pension sharing order and satisfying the requirements set out in section 20(1)(f) or 40(1)(f) of the Welfare Reform and Pensions Act 1999.

(3) Without prejudice to subsections (1) and (2) above, where the parties to a marriage have entered into an agreement as to financial provision to be made on divorce and-

(a) the estate of the party by whom any periodical allowance is payable under the agreement has, since the date when the agreement was entered into, been sequestrated, the award of sequestration has not been recalled and the party has not been discharged;

(b) an analogous remedy within the meaning of section 10(5) of the Bankruptcy (Scotland) Act 1985 has, since that date, come into force and remains in force in respect of that party's estate; or

(c) that party's estate is being administered by a trustee acting under a voluntary trust deed granted since that date by the party for the benefit of his creditors generally or is subject to an analogous arrangement, the court may, on or at any time after granting decree of divorce, make an order setting aside or varying any term of the agreement relating to the periodical allowance.

(4) Any term of an agreement purporting to exclude the right to apply for an order under subsection (1)(b) or (3) above shall be void.

(5) In this section, "agreement" means an agreement entered into before or after the commencement of this Act.

Financial provision on declarator of nullity of marriage.

17.- [This section is not amended by the Bill.]

Supplemental

Orders relating to avoidance transactions.

18.- [This section is not amended by the Bill.]

Inhibition and arrestment.

19.- [This section is not amended by the Bill.]

Provision of details of resources.

20.- [This section is not amended by the Bill.]

Award of aliment or custody where divorce or separation refused.

21.- [This section is not amended by the Bill.]

Expenses of action.

22.- [This section is not amended by the Bill.]

Actions for aliment of small amounts.

23.- [This section is not amended by the Bill.]

Matrimonial property, etc.

Marriage not to affect property rights or legal capacity.

24.- [This section is not amended by the Bill.]

Presumption of equal shares in household goods.

25.- [This section is not amended by the Bill.]

Presumption of equal shares in money and property derived from housekeeping allowance.

26.- [This section is not amended by the Bill.]

General

Interpretation

27- (1) In this Act, unless the context otherwise requires-

"action" means an action brought after the commencement of this Act;

"action for aliment" has the meaning assigned to it by section 2(3) of this Act;

"aliment" does not include aliment pendente lite or interim aliment under section 6 of this Act;

"benefits under a pension arrangement " includes any benefits by way of pension, including relevant state scheme rights, whether under a pension arrangement or not;

"caravan" means a caravan which is mobile or affixed to the land;

"child" includes a child whether or not his parents have ever been married to one another, and any reference to the child of a marriage (whether or not subsisting) includes a child (other than a child who has been boarded out with the parties, or one of them, by a local or other public authority or a voluntary organisation) who has been accepted by the parties as a child of the family;

"child support maintenance" has the meaning assigned to it by section 3(6) of the Child Support Act 1991;

"the court" means the Court of Session or the sheriff, as the case may require;

"decree" in an action for aliment includes an order of the court awarding aliment;

"family" includes a one-parent family;

"incidental order" has the meaning assigned to it by section 14(2) of this Act;

"maintenance assessment" has the meaning assigned to it by section 54 of the Child Support Act 1991;

"marriage", in relation to an action for declarator of nullity of marriage, means purported marriage;

"matrimonial home" has the meaning assigned to it by section 22 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 as amended by section 13(10) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 ];

"needs" means present and foreseeable needs;

"obligation of aliment" shall be construed in accordance with section 1(2) of this Act;

"order for financial provision" means an order under section 8(2) of this Act and, in sections 18(1) and 22(c) of this Act, also includes an order under section 5(2) of the Divorce (Scotland) Act 1976;

"party to a marriage" and "party to the marriage" include a party to a marriage which has been terminated or annulled;

"pension arrangement " means-

(a) any occupational pension scheme within the meaning of the Pension Schemes Act 1993;

(b) a personal pension scheme within the meaning of that Act;

(c) a retirement annuity contract;

(d) an annuity or insurance policy purchased or transferred for the purpose of giving effect to rights under an occupational pension scheme or a personal pension scheme;

(e) an annuity purchased, or entered into for the purpose of discharging liability in respect of a pension credit under section 21(1)(b) of the Welfare Reform and Pensions Act 1999 or under corresponding Northern Ireland legislation;

"pension sharing order" is an order which-

(a) provides that one party's-

(i) shareable rights under a specified pension arrangement , or

(ii) shareable state scheme rights, be subject to pension sharing for the benefit of the other party, and

(b) specifies the percentage value, or the amount, to be transferred; "person responsible for a pension arrangement " means-

(a) in the case of an occupational pension scheme or a personal pension scheme, the trustees or managers of the scheme;

(b) in the case of a retirement annuity contract or an annuity falling within paragraph (d) or (e) of the definition of "pension arrangement " above, the provider of the annuity,

(c) in the case of an insurance policy falling within paragraph (d) of the definition of that expression, the insurer;

"property" in sections 8, 12, 13 and 15 of this Act does not include a tenancy transferable under section 13 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981;

"relevant state scheme rights" means-

(a) entitlement, or prospective entitlement, to a Category A retirement pension by virtue of section 44(3)(b) of the Social Security Contributions and Benefits Act 1992 or under corresponding Northern Ireland legislation; and

(b) entitlement, or prospective entitlement, to a pension under section 55A of the Social Security Contributions and Benefits Act 1992 (shared additional pension) or under corresponding Northern Ireland legislation;

"retirement annuity contract" means a contract or scheme approved under Chapter III of Part XIV of the Income and Corporation Taxes Act 1988;

"resources" means present and foreseeable resources;

"trustees or managers" in relation to an occupational pension scheme or a personal pension scheme means-

(a) in the case of a scheme established under a trust, the trustees of the scheme; and

(b) in any other case, the managers of the scheme;

"voluntary organisation" means a body, other than a local or other public authority, the activities of which are not carried on for profit.

(1A) In subsection (1), in the definition of "pension sharing order"-

(a) the reference to shareable rights under a pension arrangement is to rights in relation to which pension sharing is available under Chapter I of Part IV of the Welfare Reform and Pensions Act 1999, or under corresponding Northern Ireland legislation, and

(b) the reference to shareable state scheme rights is to rights in relation to which pension sharing is available under Chapter II of Part IV of the Welfare Reform and Pensions Act 1999, or under corresponding Northern Ireland legislation.

(2) For the purposes of this Act, the parties to a marriage shall be held to cohabit with one another only when they are in fact living together as man and wife.

ANNEX C: AMENDED LEGISLATION FOR NATIONAL INSURANCE THRESHOLDS

This extract shows the text of sections 5 to 9 of the Contributions and Benefits Act 1992 as amended by Schedule 9 Part I to this Bill. It has no authoritative status. Changes made by the Bill appear in bold italics. Please refer to the commentary on. clause 64 for further details. Note that corresponding changes are made to the Northern Ireland legislation by clause 65 and Schedule 10.

--- Earnings limits and thresholds for Class1 contributions.

5.-(1) For the purposes of this Act there shall for every tax year be-

(a)the following for primary Class 1 contributions-

(i) a lower earnings limit,

(ii) a primary threshold, and

(iii) an upper earnings limit; and

(b) a secondary threshold for secondary Class 1 contributions.

Those limits and thresholds shall be the amounts specified for that year by regulations which, in the case of those limits, shall be made in accordance with subsections (2) and (3) below.

(2) The amount specified as the lower earnings limit for any tax year shall be an amount equal to or not more than 99p less than-

(a) the sum which at the beginning of that year is specified in section 44(4) below as the weekly rate of the basic pension in a Category A retirement pension; or

(b) that sum as increased by any Act or order passed or made before the beginning of that year and taking effect before 6th May in that year.

(3) The amount specified as the upper earnings limit for any tax year shall be an amount which either-

(a) is equal to 7 times the sum which is the primary threshold for that year; or

(b) exceeds or falls short of 7 times that sum by an amount not exceeding half that sum.

(4) Regulations may, in the case of each of the limits or thresholds mentioned in subsection (1) above, prescribe an equivalent of that limit or threshold in relation to earners paid otherwise than weekly (and references in this or any other Act to "the prescribed equivalent", in the context of any of those limits or thresholds, are accordingly references to the equivalent prescribed under this subsection in relation to such earners). (5) The power conferred by subsection (4) above to prescribe an equivalent of any of those limits or thresholds includes power to prescribe an amount which exceeds, by not more than £1.00, the amount which is the arithmetical equivalent of that limit or threshold. (6) Regulations under this section shall be made by the Treasury."[existing subsection(4)]

Liability for Class1 contributions. 6.-(1) Where in any tax week earnings are paid to or for the benefit of an earner over the age of 16 in respect of any one employment of his which is employed earner's employment- (a)a primary Class 1 contribution shall be payable in accordance with this section and section 8 below if the amount paid exceeds the current primary threshold (or the prescribed equivalent [...]); and (b)a secondary Class 1 contribution shall be payable in accordance with this section and section 9 below if the amount paid exceeds the current secondary threshold (or the prescribed equivalent [...]). (2) No primary or secondary Class 1 contribution shall be payable in respect of earnings if a Class 1B contribution is payable in respect of them. [Existing subsection (2A)] (3) Except as may be prescribed, no primary Class 1 contribution shall be payable in respect of earnings paid to or for the benefit of an employed earner after he attains pensionable age, but without prejudice to any liability to pay secondary Class 1 contributions in respect of any such earnings. [Existing subsection (2)] (4) The primary and secondary Class 1 contributions referred to in subsection (1) above are payable as follows- (a)the primary contribution shall be the liability of the earner; and (b)the secondary contribution shall be the liability of the secondary contributor; but nothing in this subsection shall prejudice the provisions of paragraph 3 of Schedule 1 to this Act relating to the manner in which the earner's liability falls to be discharged. [Existing subsection (3)] (5) Except as provided by this Act, the primary and secondary Class 1 contributions in respect of earnings paid to or for the benefit of an earner in respect of any one employment of his shall be payable without regard to any other such payment of earnings in respect of any other employment of his. [Existing subsection (4)] (6) Regulations may provide for reducing primary or secondary Class 1 contributions which are payable in respect of persons to whom Part XI of the Employment Rights Act 1996 (redundancy payments) does not apply by virtue of section 199(2) or 209 of that Act. [Existing subsection (5)] (7) Regulations under this section shall be made by the Treasury."

Notional payment of primary Class 1 contribution where earnings not less than lower earnings limit.

6A.-(1) This section applies where in any tax week earnings are paid to or for the benefit of an earner over the age of 16 in respect of any one employment of his which is employed earner's employment and the amount paid-

(a) is not less than the current lower earnings limit (or the prescribed equivalent), but

(b) does not exceed the current primary threshold (or the prescribed equivalent).

(2) Subject to any prescribed exceptions or modifications-

(a) the earner shall be treated as having actually paid a primary Class 1 contribution in respect of that week, and

(b) those earnings shall be treated as earnings upon which such a contribution has been paid, for any of the purposes mentioned in subsection (3) below.

(3) The purposes are-

(a) the purposes of section 14(1)(a) below;

(b) the purposes of the provisions mentioned in section 21(5A)(a) to (c) below;

(c) any other purposes relating to contributory benefits; and

(d) any purposes relating to jobseeker's allowance.

(4) Regulations may provide for any provision of this Act which, in whatever terms, refers-

(a) to primary Class 1 contributions being payable by a person, or

(b) otherwise to a person's liability to pay such contributions,

to have effect for the purposes of this section with any prescribed modifications.

(5) Except as may be prescribed, nothing in this section applies in relation to earnings paid to or for the benefit of an employed earner after he attains pensionable age.

(6) Except as provided by this Act, this section applies in relation to earnings paid to or for the benefit of an earner in respect of any one employment of his irrespective of any other such payment of earnings in respect of any other employment of his."

"Secondary contributor".

[This section is not affected by the Schedule]

7.-(1) For the purposes of this Act, the "secondary contributor" in relation to any payment of earning to or for the benefit of an employed earner, is-

(a)in the case of an earner employed under a contract of service, his employer;

(b)in the case of an earner employed in an office with emoluments, either-

(i) such person as may be prescribed in relation to that office; or

(ii) if no person is prescribed, the government department , public authority or body of persons responsible for paying the emoluments of the office;

but this subsection is subject to subsection (2) below.

(2) In relation to employed earners who-

(a) are paid earnings in a tax week by more than one person in respect of different employments; or

(b) work under the general control or management of a person other than their immediate employer, and in relation to any other case for which it appears to the Treasury that such provision is needed, regulations may provide that the prescribed person is to be treated as the secondary contributor in respect of the earnings paid to or for the benefit of an earner.

(3) Regulations under any provision of this section shall be made by the Treasury.

Calculation of primary Class 1 contributions.

8.-(1) Where a primary Class 1 contribution is payable as mentioned in section 6(1)(a) above, the amount of that contribution shall be the primary percentage of so much of the earner's earnings paid in the tax week, in respect of the employment in question, as-

(a) exceeds the current primary threshold (or the prescribed equivalent); and

(b) does not exceed the current upper earnings limit (or the prescribed equivalent); but this subsection is subject to regulations under section 6(6) above and sections 116 to 120 below and to section 41 of the Pensions Act (reduced rates of Class 1 contributions for earners in contracted-out employment).

(2) For the purposes of this Act the primary percentage shall be 10 per cent; but the percentage is subject to alteration under sections 143 and 145 of the Administration Act." [...]

Calculation of secondary Class 1 contributions

9.-(1) Where a secondary Class 1 contribution is payable as mentioned in section 6(1)(b) above, the amount of that contribution shall be the secondary percentage of so much of the earnings paid in the tax week, in respect of the employment in question, as exceeds the current secondary threshold (or the prescribed equivalent).

(2) For the purposes of subsection (1) above, the secondary percentage shall be 12.2 per cent; but the percentage is subject to alteration under sections 143 and 145 of the Administration Act.

(3) Subsection (1) above is subject to regulations under section 6(6) above and sections 116 to 120 below and to section 41 of the Pensions Act." [...]

 
 
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© Parliamentary copyright 1999
Prepared: 24 May 1999