(a) For the school year 1988-1989 and each school year thereafter beginning before the expiration of the term of any contract or agreement effective on or before the effective date of this section between a public employer and a public employe or employe organization pursuant to the act of July 23, 1970 (P.L. 563, No. 195),¹ known as the “Public Employe Relations Act,” each school district, intermediate unit and area career and technical school which elects to increase minimum salaries pursuant to section 1142.1² shall be paid in the manner provided in subsection (b), in addition to any other payments to which it is entitled, a special payment to cover the cost of implementing section 1142.1.

(b) For the school year 1988-1989, the amount paid to each school district, intermediate unit and area career and technical school shall be the difference between the salary paid to each full-time teacher at the beginning of the school term 1988-1989 that is less than eighteen thousand five hundred dollars ($18,500) and an amount equal to eighteen thousand five hundred dollars ($18,500). For the school year 1989-1990 and each school year thereafter, the amount paid shall be the difference between the salary payable to each full-time teacher at the beginning of the school term under the terms of the contract or agreement in effect on the effective date of this section which is less than eighteen thousand five hundred dollars ($18,500) and an amount equal to eighteen thousand five hundred dollars ($18,500). The amount so calculated shall be paid to each qualifying school district, intermediate unit and area career and technical school by the Department of Education during each school year for which each school district, intermediate unit and area career and technical school qualifies out of the funds appropriated to the department for this purpose.

(c) For each school year for which a school district, intermediate unit and area career and technical school qualifies for a special payment under subsection (a), the entire employer's share of contributions to the Public School Employe's Retirement Fund and Social Security attributable to the salary increase implemented pursuant to section 1142.1 shall be paid for each school district, intermediate unit and area career and technical school out of funds appropriated to the Department of Education for such purposes.