Citation and commencement

1.—(1) These Regulations may be cited as the Social Security Class 3A Contributions (Units of Additional Pension) Regulations 2014.

(2) These Regulations come into force in Great Britain on 12th October 2015.

(3) Regulations 1, 2 and 3 come into force in Northern Ireland on the same day as the coming into force for all purposes of paragraph 17 of Schedule 15 to the Pensions Act 2014(5).

Determination of amount of a Class 3A contribution needed to obtain a unit of additional pension

2.—(1) The amount of a Class 3A contribution needed by an eligible person to obtain a unit of additional pension is determined by the Table, subject to paragraph (2).

(2) If an eligible person(6) pays a Class 3A contribution before reaching pensionable age(7) the amount of contribution needed to obtain a unit of additional pension is the amount that that person would have needed to pay if on the date of payment the person had reached pensionable age.

(3) The date of payment for a Class 3A contribution is the date the contribution is received by Her Majesty’s Revenue and Customs.

Maximum number of units of additional pension

3.  The maximum number of units of additional pension that a person may obtain is 25.

Specified amount for each unit of additional pension

4.  The specified amount for the purposes of section 45(1)(b) and (2)(e) of the Social Security Contributions and Benefits Act 1992 (the additional pension in a category A retirement pension) is £1.

EXPLANATORY NOTE

(This note is not part of the Regulations)

Paragraph 3 of Schedule 15 to the Pensions Act 2014 (c. 19) inserted section 14A into the Social Security Contributions and Benefits Act 1992 (“the Act”) (c. 4). Paragraph 17 of Schedule 15 to the Pensions Act 2014 inserted section 14A into the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (“the Northern Ireland Act”) (c.7). Section 14A of both the Act and the Northern Ireland Act gives an eligible person the right to pay a Class 3A national insurance contribution to obtain a unit of additional state pension.

Regulation 1 provides that these Regulations come into force on 12th October 2015 in Great Britain. In Northern Ireland regulations 1, 2 and 3 come into force on the same day as paragraph 17 of Schedule 15 to the Pensions Act 2014 is brought into force for all purposes by an appointed day order.

Regulation 2 determines the amount of a Class 3A contribution needed to obtain a unit of additional pension. This is by reference to the age of the person who is paying the contribution. Where a person has not reached state pension age on the date of payment but will do so before 6th April 2016 (when Category A, Category B and Category D retirement pensions will be replaced) the amount of contribution needed to obtain a unit of additional pension is the amount that would be needed if the person had reached pensionable age.

Regulation 3 specifies that the maximum number of units of additional pension that a person can obtain is 25.

Regulation 4 specifies the amount a person will receive in return for each unit of additional pension. This regulation only applies to Great Britain.

A Tax Information and Impact Note will be published on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.