uksi/2020/193 — The Social Security Revaluation of Earnings Factors Order 2020

2020 No. 193 Social Security The Social Security Revaluation of Earnings Factors Order 2020 Made 26th February 2020 Laid before Parliament 5th March 2020 Coming into force 6th April 2020 In accordance with section 148(2) of the Social Security Administration Act 1992 , 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 148 of that Act, that earnings factors 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. Accordingly the Secretary of State makes this Order in exercise of the powers conferred by sections 148(3) and (4) and 189(4) and (5) of the Social Security Administration Act 1992 . Citation and commencement 1 This Order may be cited as the Social Security Revaluation of Earnings Factors Order 2020 and comes into force on 6th April 2020. Revaluation of earnings factors 2 Earnings factors for the tax years specified in the Schedule to this Order in so far as they are relevant— a to the calculation of– i the additional pension in the rate of any long-term benefit; or ii any guaranteed minimum pension ; or b to any other calculation required under Part 3 of the Pension Schemes Act 1993 (including that Part as modified by or under any other enactment), are directed to be increased 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), as increased in accordance with this Order, would not but for this article be expressed as a whole number of pounds, it is to 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 Guy Opperman Parliamentary Under Secretary of State Department for Work and Pensions 26th February 2020 SCHEDULE Percentage increase of earnings factors for specified tax years Article 2 Tax year Percentage increase 1978-1979 884.6 1979-1980 769.0 1980-1981 626.0 1981-1982 508.0 1982-1983 452.3 1983-1984 412.8 1984-1985 374.8 1985-1986 345.4 1986-1987 309.0 1987-1988 280.8 1988-1989 250.3 1989-1990 216.2 1990-1991 194.7 1991-1992 167.6 1992-1993 151.3 1993-1994 139.3 1994-1995 132.1 1995-1996 122.4 1996-1997 116.3 1997-1998 106.0 1998-1999 96.9 1999-2000 89.0 2000-2001 77.8 2001-2002 71.0 2002-2003 63.9 2003-2004 58.2 2004-2005 52.4 2005-2006 46.4 2006-2007 41.6 2007-2008 36.0 2008-2009 30.6 2009-2010 26.6 2010-2011 25.1 2011-2012 22.3 2012-2013 20.1 2013-2014 18.0 2014-2015 17.0 2015-2016 15.2 2016-2017 13.0 2017-2018 10.1 2018-2019 6.9 2019-2020 4.0 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 earnings factors relevant to the calculation of additional pension in any long-term benefit or of any guaranteed minimum pension or to any other calculation required under Part 3 of the Pension Schemes Act 1993 (c. 48) (“the 1993 Act”). Article 2 provides that, for those purposes, earnings factors for the tax years specified in the Schedule to this Order are to be increased by the percentage of their amount specified in that Schedule; the effect is that earnings factors for those years are revalued at 2019-2020 earnings levels. Accruals of additional state pension ended with the introduction of new state pension on 6th April 2016. Revaluation of earnings factors is still required for inherited additional state pension in certain circumstances (see sections 48B and 51 of the Social Security Contributions and Benefits Act 1992 (c. 4) (“the Contributions and Benefits Act”)). The percentages specified in this Order for the tax years from and including 2000-2001 are used in the revaluation of old state scheme pension debits and credits (awarded under section 49(1) of the Welfare Reform and Pensions Act 1999 (c. 30) ) in accordance with sections 13 and 14 of, and paragraph 2(6) of each of Schedules 8 and 10 to, the Pensions Act 2014 (c. 19) . The percentage specified for 2015-2016 is used to increase flat rate accrual amounts of additional state pension in accordance with paragraphs 4(2), 8(4) and 9(4) of Schedule 4B to the Contributions and Benefits Act. Accruals of guaranteed minimum pensions ended on 6th April 1997 by virtue of section 14(8) of the 1993 Act. Revaluation of earnings factors is still required for guaranteed minimum pensions which are not yet in payment. Article 3 of this Order 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 Contributions and Benefits Act, rounding is not required for the purpose of calculating guaranteed minimum pensions. A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen.