Arrangement

THE STATES, in pursuance of Articles 50 and 51 of the Social Security (Jersey) Law 1974[1], have made the following Regulations –

“ ‘earnings’ –

(a)     in relation to a Class 1 insured person, has the meaning given in Schedule 1A;

(b)     in relation to a Class 2 insured person, has the meaning given in Schedule 1B;”;

“ ‘Jersey Index of Earnings’ means the Index of Average Earnings produced by the States of Jersey Statistics Unit;”.

“ ‘standard contribution’ –

(a)     in relation to a Class 1 insured person, has the meaning given in Schedule 1A;

(b)     in relation to a Class 2 insured person, has the meaning given in Schedule 1B;”.

“(5)    The Minister may by Order prescribe, for any specified purpose or provision of this Law –

(a)     monetary amounts and benefits of any description (whether or not convertible into money) that are, or are not, earnings;

(b)     without prejudice to the generality of sub-paragraph (a), descriptions of income that are to be treated as earnings;

(c)     the manner in which the value attributable to any earnings that are not money is to be determined;

(d)     when any earnings are deemed to be paid;

(e)     circumstances in which notional earnings are to be attributed to a person;

(f)      the manner in which a person’s earnings are to be calculated or estimated;

(g)     the manner in which the amount of a person’s earnings to be treated as comprised in any payment made to or in respect of the person is to be calculated or estimated; and

(h)     earnings of a specified class or description, made or falling to be made to or by a person, that are to be disregarded, wholly or in part, in calculating a person’s earnings, or deducted from such earnings.”.

“(b)    Class 2 full rate or reduced rate contributions payable by Class 2 insured persons.”;

“(3)    There shall also be paid into the Social Security Fund, out of monies provided by the States, such amounts as are determined in accordance with Article 9A, for the purpose of contributing to the cost of supplementing contributions in accordance with Article 9.”.

“(4)    Subject to the provisions of any Order made under Article 11(d), the amounts of primary and secondary Class 1 contributions shall be determined in accordance with Schedule 1A.”.

“(1)    Class 2 insured persons, who are not entitled by virtue of paragraph (2), or being so entitled do not apply, to pay reduced rate Class 2 contributions, shall be liable to pay full rate Class 2 contributions.”;

“(3)    Subject to the provisions of any Order made under Article 11(d), the amounts of full rate Class 2 contributions and reduced rate Class 2 contributions payable in any month shall be determined in accordance with Schedule 1B.”.

“(1)    Subject to the provisions of this Law, monthly contributions in respect of an insured person shall be supplemented out of the Social Security Fund –

(a)     in the case of a Class 1 insured person, in the circumstances and by the amount provided by paragraph 4 of Schedule 1A; and

(b)     in the case of a Class 2 insured person, in the circumstances and by the amount provided by paragraph 5 of Schedule 1B.”.

“9A   Contributions by States to supplementation

(1)     The amount required by Article 4(3) to be paid into the Social Security fund for 2011, out of monies provided by the States, is £65,350,000.

(2)     Amounts required by Article 4(3) to be paid into the Social Security Fund from 1st January 2012, out of monies provided by the States shall be determined annually, in accordance with paragraph (3).

(3)     Subject to paragraph (4), the amount to be paid, for a year, shall be the product of the following formula –

(A - B) x (1 + C)²

Where –

(a)     A is the total amount required, for the base year, for the purpose of supplementing contributions in accordance with Article 9, reported in the accounts prepared in accordance with Article 30(4);

(b)     B is –

(i)      for the purpose of determining the amount payable in 2012, £6,850,000,

(ii)      for the purpose of determining the amount payable in 2013, £6,900,000;

(c)     C is the percentage rise or fall in the Jersey Index of Earnings in the base year; and

(d)     the ‘base year’ is the year 2 years before the year for which the amount is to be paid.

(4)     If B is equal to or greater than A, no money is required to be paid for the year.

(5)     The amount to be paid in for a year may be paid in a lump sum or in instalments, and at such time or times, as the Minister determines.”.

“(da)  for calculating or otherwise adjusting any amount determined, in accordance with this Law, by reference to any index or scale, so as to avoid fractional amounts or otherwise facilitate computation;”;

“(ga)  for the correction of overpayments or underpayments of contribution made in such circumstances as may be prescribed;”;

“(3)    The appropriate Health Insurance Fund Allocation, which shall be paid into the Health Insurance Fund, shall be the aggregate of the amounts expressed in Schedules 1A and 1B to be allocated to that Fund.”.

“SCHEDULE 1A

(Articles 5(4), 9 and 30(3))

class 1 factors and contribution rates

1        Class 1 – earnings

For the purposes of this Law, and subject to any Order made under Article 1(5) or 11, the earnings of a Class 1 insured person include any sums payable to the person (whether under a contract of service or any other office, employment or arrangement whereby the person is rewarded for work done or services rendered) by way of wages, salary, fees, bonuses, commission, overtime pay or any other emolument including the value of any loan, perquisite or any other benefit in kind.

2        Class 1 – monthly earnings limits

(1)     In this Schedule, subject to sub-paragraph (2) –

(a)     the lower monthly earnings limit for Class 1 contributions is £776;

(b)     the standard monthly earnings limit for Class 1 contributions is £3,686.

(2)     On the 1st January in 2012 and every subsequent year, the limits in sub-paragraph (1)(a) and (b) shall each be increased or decreased, as the case requires, by the percentage figure equal to the percentage rise or fall in the Jersey Index of Earnings during the 12 months ending on 30th June in the preceding year.

3        Class 1 – monthly contributions

(1)     The amount of an employed person’s primary Class 1 contributions in respect of the monthly earnings of an employment is the aggregate of the following amounts –

(a)     0.8% of the person’s earnings that do not exceed the standard monthly earnings limit, which amount shall be allocated to the Health Insurance Fund; and

(b)     5.2% of the person’s earnings that do not exceed the standard monthly earnings limit.

(2)     The amount of an employer’s secondary Class 1 contributions in respect of the monthly earnings of an employee is the aggregate of the following amounts –

(a)     1.2% of the employee’s earnings that do not exceed the standard monthly earnings limit, which amount shall be allocated to the Health Insurance Fund; and

(b)     5.3% of the employee’s earnings that do not exceed the standard monthly earnings limit.

4        Class 1 – supplementation

(1)     Where –

(a)     contributions have been paid in respect of a Class 1 insured person for a month; and

(b)     the social security contributions paid or credited in respect of the Class 1 insured person for the month exceed the contribution threshold but are less than the standard contribution,

the social security contributions shall be supplemented, out of the Social Security Fund, by an amount sufficient to cause those contributions in respect of the person for the month to equal the standard contribution.

(2)     No supplementation shall be awarded in respect of –

(a)     secondary Class 1 contributions alone; or

(b)     social security contributions paid or credited which are above the contribution threshold and below the standard contribution but which would not have been below the standard contribution had contribution liability been discharged in full.

(3)     For the purposes of this paragraph –

(a)     the standard contribution is the sum of –

(i)      the maximum amount payable under paragraph 3(1)(b), and

(ii)      the maximum amount payable under paragraph 3(2)(b);

(b)     the contribution threshold is the sum of –

(i)      5.2% of the lower monthly earnings limit, and

(ii)      5.3% of the lower monthly earnings limit;

(c)     ‘social security contributions’ means so much of the contributions paid or credited in respect of a Class 1 insured person as are to be paid into the Social Security Fund.

SCHEDULE 1B

(Articles 8(3), 9 and 30(3))

class 2 factors and contribution rates

1        Class 2 – earnings

For the purposes of this Law, and subject to any Order made under Article 1(5) or 11, the earnings of a Class 2 insured person include any sums payable to the person (whether under a contract for services or any office or arrangement whereby the person is rewarded for work done or services rendered) by way of wages, salary, fees, bonuses, commission, overtime pay or any other emolument including the value of any loan, perquisite or any other benefit in kind.

2        Class 2 – monthly earnings limits

(1)     In this Schedule, subject to sub-paragraph (2) –

(a)     the lower monthly earnings limit for Class 2 contributions is £776;

(b)     the standard monthly earnings limit for Class 2 contributions is £3,686.

(2)     On the 1st January in 2012 and every subsequent year, the limits in sub-paragraph (1)(a) and (b) shall each be increased or decreased, as the case requires, by the percentage figure equal to the percentage rise or fall in the Jersey Index of Earnings during the 12 months ending on 30th June in the preceding year.

3        Class 2 – monthly full rate contributions

The amount of a person’s full rate Class 2 contributions payable in any month is the aggregate of the following amounts –

(a)     2% of the standard monthly earnings limit, which amount shall be allocated to the Health Insurance Fund; and

(b)     10.5% of the standard monthly earnings limit.

4        Class 2 – monthly reduced rate contributions

The amount of a person’s reduced rate Class 2 contributions payable in any month is the aggregate of the following amounts –

(a)     2% of the person’s earnings for the month that do not exceed the standard monthly earnings limit, which amount shall be allocated to the Health Insurance Fund; and

(b)     10.5% of the person’s earnings for the month that do not exceed the standard monthly earnings limit.

5        Class 2 – supplementation

(1)     No supplementation shall be awarded in respect of full rate Class 2 contributions.

(2)     Where the reduced rate Class 2 social security contributions paid or credited in respect of a Class 2 insured person for a month –

(a)     are at least equal to the amount of such contributions payable for the month in respect of the person by virtue of paragraph 4(b); and

(b)     are less than the standard contribution,

the contributions shall be supplemented, out of the Social Security Fund by an amount sufficient to cause the social security contributions in respect of the person for the month to equal the standard contribution.

(3)     No supplementation shall be awarded in respect of reduced rate Class 2 social security contributions paid or credited for any month in respect of a Class 2 insured person which are below the standard contribution but which would not have been below the standard contribution had contribution liability been discharged in full.

(4)     For the purposes of this paragraph –

(a)     the standard contribution is the maximum amount payable under paragraph 4(b); and

(b)     ‘social security contributions’ means so much of the contributions paid or credited in respect of a Class 2 insured person as are to be paid into the Social Security Fund.”.

“(iii)   for the purpose of determining the amount payable in 2014 and ensuing years, the aggregate of the following amounts –

(A)    the Class 1 secondary contributions paid for the base year in accordance with paragraph 3(2)(c) of Schedule 1A,

(B)     the full rate Class 2 contributions paid for the base year in accordance with paragraph 3(c) of Schedule 1B, and

(C)     the reduced rate Class 2 contributions paid for the base year in accordance with paragraph 4(c) of Schedule 1B,

as those amounts are reported in the accounts prepared in accordance with Article 30(4);”.

“(c)    the upper monthly earnings limit for Class 1 contributions is £12,500.”;

“(3)    On the 1st January in 2013 and every subsequent year, the limit in sub-paragraph (1)(c) shall be increased or decreased, as the case requires, by the percentage figure equal to the percentage rise or fall in the Jersey Index of Earnings during the 12 months ending on 30th June in the preceding year.”;

“(c)    2% of the employee’s earnings that exceed the standard monthly earnings limit but do not exceed the upper monthly earnings limit.”.

“(c)    the upper monthly earnings limit for Class 2 contributions is £12,500.”;

“(3)    On the 1st January in 2013 and every subsequent year, the limit in sub-paragraph (1)(c) shall be increased or decreased, as the case requires, by the percentage figure equal to the percentage rise or fall in the Jersey Index of Earnings during the 12 months ending on 30th June in the preceding year.”;

“(c)    2% of the amount that is the difference between the standard monthly earnings limit and the upper monthly earnings limit.”;

“(c)    2% of the person’s earnings that exceed the standard monthly earnings limit but do not exceed the upper monthly earnings limit.”.