The Social Security (Contributions) (Amendment No. 3) Regulations 2005

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" "the acquired gender" has the same meaning as it has in the Gender Recognition Act 2004[4];".

    (3) After the definition of "electronic communications" [5] insert - 

" "full gender recognition certificate" means a certificate issued under section 4 of the Gender Recognition Act 2004;".

     4. At the end of regulation 8 (earnings periods for directors) add - 

    " (7) If a full gender recognition certificate is issued under the Gender Recognition Act 2004 to a person aged at least 60 but not more than 64 - 


(a) whose gender before its issue was female; and

(b) whose acquired gender is male;



the periods in the year of issue respectively falling before and after its issue shall be treated, for the purpose of computing liability for primary Class 1 contributions, as separate earnings periods.".

     5. In regulation 40 (prescribed general earnings in respect of which Class 1A contributions not payable)[6] omit paragraphs (5), (8) and (9).

     6.  - (1) Amend regulation 49 (payment of precluded Class 3 contributions) as follows.

    (2) In paragraph (1) omit sub-paragraph (e).

    (3) After paragraph (2) insert - 

    " (2A) No person shall be entitled to pay a Class 3 contribution in respect of the year in which he attains pensionable age or any subsequent year.

This is subject to the following qualification.

    (2B) A person - 


(a) who has attained the age of 60;

(b) to whom a full gender recognition certificate is issued; and

(c) whose acquired gender is male;



is not precluded from paying Class 3 contributions for the relevant years.

    (2C) For the purposes of paragraph (2B) the relevant years are - 



(a) the year in which the person attains the age of 60;

(b) any subsequent year before that in which the full gender recognition certificate is issued; and

(c) the year in which the full gender recognition certificate is issued.".

     7. After regulation 65A (amount of Class 3 contributions payable by virtue of regulation 50A)[7] insert - 

" Amount of Class 3 contributions payable after issue of a full gender recognition certificate
     65B. The amount of a contribution payable by virtue of regulation 49(2B) (Class 3 contributions not precluded where gender recognition certificate issued) which is paid in the year in which the full gender recognition certificate is issued or the following year shall, notwithstanding section 13(6) of the Act, be calculated by reference to the weekly rate which would have been applicable if it had been paid during the contribution year to which it relates.".

     8. In paragraph 14 of Schedule 2 (valuation of non-cash vouchers - 

(a) in sub-paragraph (2), for "qualification" substitute "qualifications"; and

(b) at the end add the following sub-paragraph - 

    " (4) The valuation of qualifying childcare vouchers is determined in accordance with paragraph 7 of Part 5 of Schedule 3.".

     9.  - (1) Amend Schedule 3 (amounts to be disregarded in the computation of earnings) as follows.

    (2) In Part 5 (certain non-cash vouchers to be disregarded as payments in kind) for paragraph 7[8] substitute - 

" Qualifying childcare vouchers
     7.  - (1) A qualifying childcare voucher, subject to the qualifications in sub-paragraphs (2) and (5).

    (2) Where the chargeable expense of the voucher exceeds the exempt amount, only that amount shall be disregarded by virtue of sub-paragraph (1).

    (3) The exempt amount is the amount found by the formula - 



E x QW.

Here - 
E is the sum of - 
(a) £50; and

(b) the administration costs for the qualifying childcare voucher;


QW is the number of qualifying weeks - 
(a) for which the earner has been employed by the secondary contributor during the tax year in which the qualifying childcare voucher is provided; and

(b) for which no other qualifying childcare voucher has been provided by the secondary contributor.



    (4) Where an earner has two or more employed earner's employments, the earnings from which fall to be aggregated in accordance with regulation 14 or 15, the reference to the secondary contributor in paragraph (b) of the definition of QW is a reference to the secondary contributor in respect any of those employments.

    (5) An earner is only entitled to one exempt amount even if childcare vouchers are provided in respect of more than one child.

    (6) For the purposes of this paragraph - 



(a) "chargeable expense" has the meaning given in paragraph 14 of Schedule 2;

(b) "qualifying childcare voucher" and "qualifying week" have the meanings given in section 270A of the Income Tax (Earnings and Pensions) Act 2003[9];

(c) the administration costs for a voucher means the difference between the cost of provision of a voucher and its face value; and

(d) the face value of a voucher is the amount stated on or recorded in the voucher as the value of the provision of care for a child that may be obtained by using it.".

    (3) In Part 6, in paragraph 7 - 

(a) in the heading for "Pensions" substitute "Payments to pension schemes"; and

(b) after paragraph (c) insert - 


" (d) Article 18 of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (The United States of America) Order 2002[10].".

Transitional provision
     10. In relation to any earnings period ending on or before 6th October 2005, paragraph 7(3) of Part 5 of Schedule 3 to the principal Regulations [11] shall have effect as if, for the purposes of paragraph (a) of QW, the number of qualifying weeks for which the employee had been employed, before the end of the earnings period were 26, regardless of the number of weeks for which he had actually been employed.

Revocation
     11. Regulation 28(3)(d) of the Social Security (Contributions, Categorisation of Earners and Intermediaries) (Amendment) Regulations 2004[12] (which is spent by virtue of the substitution made by regulation 9(2) of this instrument) is revoked.


Jim Murphy

Nick Ainger
Two of the Lords Commissioners of Her Majesty's Treasury

16th March 2005



The Secretary of State concurs.



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


Malcolm Wicks
Minister of State, Department for Work and Pensions.

17th March 2005



The Department for Social Development concurs.



Sealed with the Official Seal of the Department for Social Development on


16th March 2005

L.S.

John O'Neill
Senior Officer of the Department for Social Development

16th March 2005

[2] 1992 c. 7. Section 3 has been amended: the relevant amendment is that made by paragraph 4 of Schedule 3 to the Social Security Contributions (Transfer of Functions, etc.) (Northern Ireland) Order 1999 (S.I. 1999/671: "the Transfer Order"). Section 10 was substituted by section 78 of the 2000 Act and amended by paragraph 21 of Schedule 1 to the 2002 Act and paragraph 195 of Schedule 6, and the relevant entry in Part 1 of Schedule 8 to ITEPA. Section 13 has been amended: the relevant amendment is that made by paragraph 15 of Schedule 3 to the Transfer Order. Section 14 has been amended: the relevant amendment is that made by paragraph 16 of Schedule 3 to the Transfer Order. The functions of the Department of Health and Social Services for Northern Ireland were transferred to the Department for Social Development by Article 8(b) of, and Part 2 of Schedule 6 to, the Departments (Transfer and Assignment of Functions) Order (Northern Ireland) 1999 (S.R. 1999 No. 481). Section 171 has been amended: the relevant amendment is that made by paragraph 28 of Schedule 3 to the Transfer Order.back

[3] S.I. 2001/1004.back

[4] 2004 c. 7.back

[5] The definition of "electronic communications" was substituted by paragraph 23(1)(d) and (2) of Schedule 1 to S.I. 2003/2155.back

[6] Regulation 40 has been amended. The relevant amending instruments are S.I. 2001/2412, 2003/2085 and 2004/770.back

[7] Regulation 65A was inserted by S.I. 2004/1362.back

[8] Paragraph 7 was amended by regulation 28(3)(d) of S.I. 2004/770.back

[9] 2003 c.1 as amended by paragraph 3, Schedule 13 of FA 2004.back

[10] S.I. 2002/2848.back

[11] Inserted by regulation 9(2) of this instrument.back

[12] S.I. 2004/770.back