Most Gracious Sovereign, We, your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom in Parliament assembled, towards providing such sums as may be required for the national health service in England, in Wales and in Scotland, and for the health service in Northern Ireland, have freely and voluntarily resolved to give and grant unto Your Majesty the increases in national insurance contributions hereinafter mentioned; and do therefore most humbly beseech Your Majesty that it may be enacted, and be it enacted, by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Increases in contributions
For section 8 of the Social Security Contributions and Benefits Act 1992 (c. 4) substitute—
For section 8 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) substitute—
In section 9 of the Social Security Contributions and Benefits Act 1992 (c. 4) (calculation of secondary Class 1 contributions: Great Britain), for subsections (2) and (3) substitute—
In section 9 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) (calculation of secondary Class 1 contributions: Northern Ireland), for subsections (2) and (3) substitute—
In section 15 of the Social Security Contributions and Benefits Act 1992 (Class 4 contributions recoverable under Income Tax Acts: Great Britain), for subsection (3) substitute—
In section 15 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (Class 4 contributions recoverable under Income Tax Acts: Northern Ireland), for subsection (3) substitute—
In section 18 of the Social Security Contributions and Benefits Act 1992 (c. 4) (Class 4 contributions recoverable under regulations: Great Britain), after subsection (1) insert—
In section 18 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) (Class 4 contributions recoverable under regulations: Northern Ireland), after subsection (1) insert—
Application towards cost of national health service
Section 162 of the Social Security Administration Act 1992 (c. 5) (destination of contributions) is amended as follows.
In subsection (5) (allocation towards cost of national health service in England, Wales and Scotland)—
after “means” insert “ 100 per cent of the product of the additional rate together with ”,
in paragraph (a), for “1.05” substitute “ 2.05 ”,
in paragraphs (b), (c) and (ca), for “0.9” substitute “ 1.9 ”, and
in paragraph (f), for the words from “1.15” onwards substitute “ 2.15 per cent of the amount estimated to be that of so much of the profits or gains, or earnings, in respect of which those contributions were paid as exceeded the lower limit specified in paragraph (a) of subsection (3) of section 15, and in paragraph (a) of subsection (1A) of section 18, of the Contributions and Benefits Act but did not exceed the upper limit specified in those subsections. ”
After that subsection insert—
Section 142 of the Social Security Administration (Northern Ireland) Act 1992 (c. 8) (destination of contributions) is amended as follows.
In subsection (5) (allocation towards cost of health service in Northern Ireland)—
after “means” insert “ 100 per cent of the product of the additional rate together with ”,
in paragraph (a), for “1.05” substitute “ 2.05 ”,
in paragraphs (b), (c) and (ca), for “0.9” substitute “ 1.9 ”, and
in paragraph (f), for the words from “1.15” onwards substitute “ 2.15 per cent of the amount estimated to be that of so much of the profits or gains, or earnings, in respect of which those contributions were paid as exceeded the lower limit specified in paragraph (a) of subsection (3) of section 15, and in paragraph (a) of subsection (1A) of section 18, of the Contributions and Benefits Act but did not exceed the upper limit specified in those subsections. ”
After that subsection insert—
Supplementary
Schedule 1 (consequential amendments) has effect.
Schedule 2 (repeals and revocations) has effect.
This Act may be cited as the National Insurance Contributions Act 2002.
This Act has effect in relation to the tax year 2003-04 and subsequent tax years; and for this purpose “tax year” has the meaning given by section 122(1) of the Social Security Contributions and Benefits Act 1992 (c. 4).
The amendments, repeals and revocations made by this Act have the same extent as the provisions to which they relate.
Subject to that, this Act extends to Northern Ireland (as well as to England and Wales and Scotland).
Consequential amendments
The Social Security Contributions and Benefits Act 1992 has effect subject to the following amendments.
In section 10(5) (amount of Class 1A contributions), for “percentage rate specified as the secondary percentage in section 9(2) above” substitute “ secondary percentage ”.
In section 10A(6) (amount of Class 1B contributions), for “that specified as the secondary percentage in section 9(2) above” substitute “ the secondary percentage ”.
Section 17 (Class 4 contributions: exceptions, deferment etc.) is amended as follows.
In subsection (1), after “contributions” insert “ , or any prescribed part of such contributions, ”.
In subsection (4), for “for Class 4 contributions” substitute “ to pay Class 4 contributions, or any part of such contributions, ”.
Section 19 (general power to regulate liability for contributions) is amended as follows.
In subsection (1), after “classes” insert “ , or any prescribed part of such contributions, ”.
In subsection (3), after “class” insert “ or any part of such contributions ”.
In subsection (4)(a), for “her liability in respect of primary Class 1 contributions” substitute “ so much of her liability in respect of primary Class 1 contributions as is attributable to section 8(1)(a) above ”.
In section 21(5)(c)(i) (meaning of “the earnings factor”), for “all his earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
Section 22 (earnings factors) is amended as follows.
In subsections (1)(a) and (2A), for “those of his earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
In subsection (3)(a), after “earnings” insert “ not exceeding the upper earnings limit ”.
In section 23(3)(a) (tables and rules for ascertaining earnings factors), after “of earnings” insert “ not exceeding the upper earnings limit ”.
In section 24(2)(a) (calculation of earnings factors in absence of records), for “that person’s earnings” substitute “ so much of that person’s earnings as did not exceed the upper earnings limit and ”.
In section 44(6)(za) (earnings factors for Category A retirement pension), for “those of his earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
In section 44A(1)(a) (deemed earnings factors), for “earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
Section 122(1) (interpretation) is amended as follows.
Before the definition of “beneficiary” insert—.
Before the definition of “medical examination” insert—.
After the definition of “relevant loss of faculty” insert—.
Schedule 1 (supplementary provisions relating to contributions) is amended as follows.
In paragraph 1—
in sub-paragraph (2)(a), after “in respect of the aggregated earnings” insert “ attributable to section 8(1)(a) above ”, and
in sub-paragraph (3)—
after “amount of the primary Class 1 contribution” insert “ attributable to section 8(1)(a) above ”, and
for “rate of primary Class 1 contributions” (in each place) substitute “ main primary percentage ”.
In paragraph 3(1), after “primary contribution” insert “ or a prescribed part of the earner’s primary contribution ”.
Schedule 3 (contribution conditions for entitlement to benefit) is amended as follows.
In paragraph 2(4)(a)(i) and (5)(a)(i), for “earnings upon” substitute “ so much of the claimant’s earnings as did not exceed the upper earnings limit and upon ”.
In paragraph 4(2)(a), for “earnings” substitute “ so much of the contributor’s earnings as did not exceed the upper earnings limit and ”.
In paragraph 5(2)(b)(i), for “earnings” substitute “ so much of the contributor’s earnings as did not exceed the upper earnings limit and ”.
In paragraph 5(4)(a)(i), for “any earnings” substitute “ so much of the contributor’s earnings as did not exceed the upper earnings limit and ”.
In paragraph 7(4)(a), for “his earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
The Social Security Administration Act 1992 has effect subject to the following amendments.
Section 141 (annual review of contributions) is amended as follows.
In subsection (4)(d), for the words from “section 15(3)” onwards substitute “ subsection (3) of section 15 as the upper limit of profits or gains to be taken into account for the purposes of Class 4 contributions under that section and as the lower limit of profits or gains to be taken into account for those purposes under paragraph (a) of that subsection. ”
In subsection (5)—
for “specified in section 15(3) of the Contributions and Benefits Act” substitute “ referred to in subsection (4)(d) above ”, and
for “18(1) of that Act” substitute “ 18 of the Contributions and Benefits Act ”.
Section 143 (power to alter contributions with view to adjusting level of National Insurance Fund) is amended as follows.
In subsection (1)—
in paragraph (a), for “primary percentage in section 8(2)” substitute “ main primary percentage in section 8(2)(a) ”, and
in paragraph (e), for “for Class 4 contributions specified in section 15(3)” substitute “ specified as the main Class 4 percentage in section 15(3ZA)(a) ”.
In subsection (4)—
in paragraph (a), before “primary” insert “ main ”, and
in paragraph (b), for “percentage rate for Class 4 contributions” substitute “ main Class 4 percentage ”.
Section 145 (power to alter primary and secondary contributions) is amended as follows.
In subsection (1), for “primary percentage in section 8(2)” substitute “ main primary percentage in section 8(2)(a) ”.
In subsection (3), before “primary” insert “ main ”.
Section 162 (destination of contributions) is amended as follows.
In subsection (2A), for “References in subsections (1) and (2) above to contributions include references to” substitute “ The reference to contributions in subsection (1) above includes ”.
In subsection (4)(a), for “or paragraph 6 of Schedule 2 to that Act” substitute “ , or from persons in Great Britain by virtue of paragraph 6 of Schedule 2 to that Act, ”.
In subsection (6), for “subsection (5)” substitute “ subsections (5) and (5A) ”.
The Social Security Contributions and Benefits (Northern Ireland) Act 1992 has effect subject to the following amendments.
In section 10(5) (amount of Class 1A contributions), for “percentage rate specified as the secondary percentage in section 9(2) above” substitute “ secondary percentage ”.
In section 10A(6) (amount of Class 1B contributions), for “that specified as the secondary percentage in section 9(2) above” substitute “ the secondary percentage ”.
Section 17 (Class 4 contributions: exceptions, deferment etc.) is amended as follows.
In subsection (1), after “contributions” insert “ , or any prescribed part of such contributions, ”.
In subsection (4), for “for Class 4 contributions” substitute “ to pay Class 4 contributions, or any part of such contributions, ”.
Section 19 (general power to regulate liability for contributions) is amended as follows.
In subsection (1), after “classes” insert “ , or any prescribed part of such contributions, ”.
In subsection (3), after “class” insert “ or any part of such contributions ”.
In subsection (4)(a), for “her liability in respect of primary Class 1 contributions” substitute “ so much of her liability in respect of primary Class 1 contributions as is attributable to section 8(1)(a) above ”.
In section 21(5)(c)(i) (meaning of “the earnings factor”), for “all his earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
Section 22 (earnings factors) is amended as follows.
In subsections (1)(a) and (2A), for “those of his earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
In subsection (3)(a), after “earnings” insert “ not exceeding the upper earnings limit ”.
In section 23(3)(a) (tables and rules for ascertaining earnings factors), after “of earnings” insert “ not exceeding the upper earnings limit ”.
In section 24(2)(a) (calculation of earnings factors in absence of records), for “that person’s earnings” substitute “ so much of that person’s earnings as did not exceed the upper earnings limit and ”.
In section 44(6)(za) (earnings factors for Category A retirement pension), for “those of his earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
In section 44A(1)(a) (deemed earnings factors), for “earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
Section 121(1) (interpretation) is amended as follows.
Before the definition of “beneficiary” insert—.
Before the definition of “medical examination” insert—.
After the definition of “relevant loss of faculty” insert—.
Schedule 1 (supplementary provisions relating to contributions) is amended as follows.
In paragraph 1—
in sub-paragraph (2)(a), after “in respect of the aggregated earnings” insert “ attributable to section 8(1)(a) above ”, and
in sub-paragraph (3)—
after “amount of the primary Class 1 contribution” insert “ attributable to section 8(1)(a) above ”, and
for “rate of primary Class 1 contributions” (in each place) substitute “ main primary percentage ”.
In paragraph 3(1), after “primary contribution” insert “ or a prescribed part of the earner’s primary contribution ”.
Schedule 3 (contribution conditions for entitlement to benefit) is amended as follows.
In paragraph 2(4)(a)(i) and (5)(a)(i), for “earnings upon” substitute “ so much of the claimant’s earnings as did not exceed the upper earnings limit and upon ”.
In paragraph 4(2)(a), for “earnings” substitute “ so much of the contributor’s earnings as did not exceed the upper earnings limit and ”.
In paragraph 5(2)(b)(i), for “earnings” substitute “ so much of the contributor’s earnings as did not exceed the upper earnings limit and ”.
In paragraph 5(4)(a)(i), for “any earnings” substitute “ so much of the contributor’s earnings as did not exceed the upper earnings limit and ”.
In paragraph 7(4)(a), for “his earnings” substitute “ so much of his earnings as did not exceed the upper earnings limit and ”.
Section 142 of the Social Security Administration (Northern Ireland) Act 1992 (destination of contributions) is amended as follows.
In subsection (2A), for “References in subsections (1) and (2) above to contributions include references to” substitute “ The reference to contributions in subsection (1) above includes ”.
In subsection (4)(a), for “or paragraph 6 of Schedule 2 to that Act” substitute “ , or from persons in Northern Ireland by virtue of paragraph 6 of Schedule 2 to the Great Britain Contributions and Benefits Act (the text of which is set out as Schedule 2 to the Contributions and Benefits Act), ”.
In subsection (6), for “subsection (5)” substitute “ subsections (5) and (5A) ”.
The Pension Schemes Act 1993 has effect subject to the following amendments.
In section 41(1A) (reduced rate of Class 1 contributions for members of salary related contracted-out schemes), after “contribution” insert “ attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992 (c. 4) ”.
In section 42A(2) (reduced rate of Class 1 contributions for members of money-purchase contracted-out schemes), after “contribution” insert “ attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992 ”.
In section 43(1)(b) (payment of minimum contributions to personal pension schemes), for “her liability in respect of primary Class 1 contributions” substitute “ so much of her liability in respect of primary Class 1 contributions as is attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992 (c. 4) ”.
In section 48A(1) (effect of reduced contributions)—
after “contribution” insert “ attributable to section 8(1)(a) of the Social Security Contributions and Benefits Act 1992 ”, and
after “no” insert “ such ”.
The Pension Schemes (Northern Ireland) Act 1993 has effect subject to the following amendments.
In section 37(1A) (reduced rate of Class 1 contributions for members of salary related contracted-out schemes), after “contribution” insert “ attributable to section 8(1)(a) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) ”.
In section 38A(2) (reduced rate of Class 1 contributions for members of money-purchase contracted-out schemes), after “contribution” insert “ attributable to section 8(1)(a) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 ”.
In section 39(1)(b) (payment of minimum contributions to personal pension schemes), for “her liability in respect of primary Class 1 contributions” substitute “ so much of her liability in respect of primary Class 1 contributions as is attributable to section 8(1)(a) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 ”.
In section 44A(1) (effect of reduced contributions)—
after “contribution” insert “ attributable to section 8(1)(a) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 ”, and
after “no” insert “ such ”.
In section 2(3) of the Jobseekers Act 1995 (contribution-based conditions), for “from earnings” substitute “ from so much of the claimant’s earnings as did not exceed the upper earnings limit and ”.
In Article 4(3) of the Jobseekers (Northern Ireland) Order 1995 (contribution-based conditions), for “from earnings” substitute “ from so much of the claimant’s earnings as did not exceed the upper earnings limit and ”.
Repeals and revocations