14 February 2005 - The Social Security Pensions (Low Earnings Threshold) Order 2005
(SI 2005/217) was laid before Parliament today. The Order, made annually under Section 148A of the Social Security Administration Act 1992, sets the new Low Earnings Threshold for the additional pension (State Second Pension) for 2005/06. The Threshold is increased from £11,600 to £12,100.
The State Second Pension reformed the State Earnings-Related Pension Scheme (SERPS) from 6 April 2002. An important element of the reform is that, from 2002 onwards, earnings used to determine an additional pension that fall between the National Insurance Lower Earnings Limit and the Low Earners Threshold are treated as being at the Threshold.
State Second Pension also allows certain carers and long-term disabled people to build up additional pension for the first time. For each qualifying year, they are deemed to have earnings at the Threshold.
In addition, the accrual rate on these earnings is twice that of SERPS.
The SI can be accessed at: http://www.opsi.gov.uk/si/si2005/20050217.htm
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