SOCIAL SECURITY Citation, commencement and interpretation 1 1 These Regulations may be cited as the Social Security (Earnings Factor) Amendment (No. 2) Regulations 1987 and shall come into force on 6th April 1987. 2 In these Regulations,“the principal regulations” means the Social Security (Earnings Factor) Regulations 1979 . Amendment of principal regulations 2 1 The principal regulations shall be amended in accordance with the following paragraphs of this regulation. 2 In regulation 1 (interpretation)— a the definition of“contributions” shall be omitted; and b after paragraph (2) there shall be added the following paragraph— 3 In these regulations references to contributions of any class are to contributions actually of that class notwithstanding that for the purposes of any benefit they may be treated as or be deemed to be contributions of another class. . 3 In regulation 2 (ascertainment of earnings factors) for the word“contributions” there shall be substituted the words“earnings or Class 2 or Class 3 contributions”. 4 In Schedule 1 (rules for the ascertainment of earnings factors), Part I (Class 1 contributions) shall be amended as follows— a in paragraph 1(1) sub-paragraphs (e) and (f) shall be omitted; b for paragraph 2 there shall be substituted the following paragraph— 2 1 Subject to sub-paragraph (2) below, a person’s earnings factor derived in respect of the year commencing on 6th April 1987 or any subsequent year from— a those of his earnings in respect of such year upon which Class 1 contributions have been paid or treated as paid, and b earnings with which he has been credited in respect of such year, shall be equal to the amount of those actual and credited earnings. 2 Any earnings factor ascertained under sub-paragraph (1) above shall be rounded down to the nearest whole pound. ; c for paragraph 3 there shall be substituted the following paragraph— 3 Where, in respect of the year commencing on 6th April 1987, or any subsequent year, a person’s earnings upon which Class 1 contributions have been paid or treated as paid are, or are to be, recorded as separate sums in the records of the Department of Health and Social Security, the earnings factor derived from those earnings shall be equal to the aggregate of the amounts ascertained by rounding down each sum separately to the nearest whole pound. ; d paragraphs 4 and 5 shall be omitted; e for paragraph 6 there shall be substituted the following paragraph— 6 Where a person has actual earnings in respect of the year commencing on 6th April 1987, or any subsequent year, upon which Class 1 contributions have been paid or treated as paid and, but for this paragraph, the ascertainment of any earnings factor of his in respect of such year by the application of paragraphs 2 or 3 above would have the effect that— a his earnings factor derived from those earnings, or b the aggregate of his earnings factors derived from those earnings, and any earnings credited in respect of the same year, together with any derived from Class 2 or Class 3 contributions paid or credited in that year would fall short of— i the qualifying earnings factor, by an amount not exceeding £50, or ii the standard level, by an amount not exceeding £50, or iii one-half of the standard level, by an amount not exceeding £25, the amount of that earnings factor as so ascertained shall, for the purpose of section 13(2)(a) of the Act, be increased by the amount of the shortfall, and the amount resulting shall be rounded up to the next whole pound. ; f for paragraph 7 there shall be substituted the following paragraph— 7 1 A person’s earnings factor derived in respect of the year commencing on 6th April 1987, or any subsequent year, from those of his earnings in contracted-out employment upon which contracted-out contributions have been paid, or treated as paid, in respect of such year, shall be equal to the amount of those earnings. 2 Any earnings factor ascertained under sub-paragraph (1) above shall be rounded down to the nearest whole pound. 3 Where, in respect of the year commencing on 6th April 1987, or any subsequent year, a person’s earnings upon which contracted-out contributions have been paid or treated as paid are, or are to be, recorded as separate sums in the records of the Department of Health and Social Security, the earnings factor derived from those earnings shall be equal to the aggregate of the amounts ascertained by rounding down each sum separately to the nearest whole pound. . Transitional 3 A person’s earnings factors in respect of any year before 6th April 1987 shall be ascertained as if regulation 2 had not been made. Signed by authority of the Secretary of State for Social Services John Major Minister of State, Department of Health and Social Security 11th March 1987