The Social Security Revaluation of Earnings Factors Order 2002

Statutory Instrument 2002 No. 519

The Social Security Revaluation of Earnings Factors Order 2002

STATUTORY INSTRUMENTS

2002 No. 519
SOCIAL SECURITY
The Social Security Revaluation of Earnings Factors Order 2002

	Made	7th March 2002
	Laid before Parliament	13th March 2002
	Coming in to force	6th April 2002

The Secretary of State for Work and Pensions, in exercise of the powers conferred upon him by sections 148(3) and (4) and 189(1), (3), (4) and (5) of the Social Security Administration Act 1992[1] and of all other powers enabling him in that behalf, having on a review under the said section 148[2] concluded, having had regard to earlier orders under that section[3], that earnings factors[4] for the relevant previous tax years have not, during the period taken into account for that review, maintained their value in relation to the general level of earnings obtaining in Great Britain, hereby makes the following Order:

Citation and commencement
1. This Order may be cited as the Social Security Revaluation of Earnings Factors Order 2002 and shall come into force on 6th April 2002.

Revaluation of earnings factors
2. The earnings factors for tax years specified in the Schedule to this Order, in so far as they are relevant[5] -

(b) to any other calculation required under Part III of the Pension Schemes Act 1993 (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 amounts
3. Where any earnings factor relevant to the calculation specified in article 2(a)(i) of this Order, 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 the rounding down of any fraction of a pound less than one half and the rounding up of any other fraction of a pound.

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

Maria Eagle
Parliamentary Under-Secretary of State, Department for Work and Pensions

7th March 2002

SCHEDULEArticle 2

Tax Year	Percentage
1978/79	500.7
1979/80	430.2
1980/81	342.9
1981/82	270.9
1982/83	236.9
1983/84	212.8
1984/85	189.7
1985/86	171.7
1986/87	149.5
1987/88	132.3
1988/89	113.7
1989/90	92.9
1990/91	79.8
1991/92	63.3
1992/93	53.3
1993/94	46.0
1994/95	41.6
1995/96	35.7
1996/97	32.0
1997/98	25.7
1998/99	20.1
1999/2000	15.3
2000/2001	8.5
2001/2002	4.3

EXPLANATORY NOTE

(This note is not part of the Order)

This Order is made consequent upon a review under section 148 of the Social Security Administration Act 1992.

This Order directs that the earnings factors relevant to the calculation of the additional pension in the rate of any long-term benefit or of any guaranteed minimum pension, or to any other calculation required under Part III of the Pension Schemes Act 1993, 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 2000-01 and 2001-02 are also relevant for the purposes of revaluing state scheme pension credits and debits in accordance with sections 45B, 55A and 55B of the Social Security Contributions and Benefits Act 1992. The percentage for the tax year 2001-02 is 4.3 per cent., and those for earlier tax years have been increased so that the earnings factors for those years are revalued at 2001-02 earnings levels.

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

This Order does not impose any new costs on business.

Notes:

[1] 1992 c. 5back

[2] See section 148(2), as amended by section 37 of the Child Support, Pensions and Social Security Act 2000 (c. 19).back

[3] Section 148(3) and (4) of the Social Security Administration Act 1992 consolidated section 21(3) of the Social Security Pensions Act 1975 (c. 60). The earlier orders are: S.I.1979/832, 1980/728, 1981/598, 1982/607, 1983/655, 1984/581, 1985/688, 1986/809, 1987/861, 1988/867, 1989/805, 1990/1412, 1991/1108, 1992/1102, 1993/1159, 1994/1105, 1995/1070, 1996/1133, 1997/1117, 1998/1137, 1999/1235, 2000/1365, 2001/631. See also section 148(7) of the Social Security Administration Act 1992 which provides that orders under section 21 of the Social Security Pensions Act 1975 are to be treated as orders under section 148.back

[4] See sections 22 and 23 of the Social Security Contributions and Benefits Act 1992 (c. 4).back

[5] Earnings factors for any tax year after 1996/97 are not relevant to the calculation of any guaranteed minimum; see section 14(8) of the Pension Schemes Act 1993 (c. 48) as amended by paragraph 27(b) of Schedule 5 to the Pensions Act 1995(c. 26). See also sections 45B, 55A and 55B of the Social Security Contributions and Benefits Act 1992, inserted by paragraphs 2 and 3 of Schedule 6 to the Welfare Reform and Pensions Act 1999 (c. 30), under which state scheme pension credits and debits are to be increased by reference to percentage figures specified in Orders under section 148 of the Social Security Administration Act 1992.back

ISBN 0 11 039440 2