Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Tiners
    • By Tiners 9th Feb 17, 4:56 AM
    • 223Posts
    • 222Thanks
    Tiners
    National Insurance Contributions Query
    • #1
    • 9th Feb 17, 4:56 AM
    National Insurance Contributions Query 9th Feb 17 at 4:56 AM
    Hi,
    Can anyone confirm that I've got the correct understanding regarding NI contributions... That if you earn between £112-£155 per week you don't have to pay NI and you are automatically credited with contributions... but if you earn less than £112 per week you AREN'T credited and are presumably supposed to make voluntary contributions?

    This makes very little sense to me?

    The reason I ask is my sister has been doing seasonal work for the last 4 years, earning around £140 per week for 9 months a year, if averaged out over the full 12 months this equates to less than the £112 per week minimum, so she has unwittingly not been paying any NI contributions..

    She has recently been diagnosed with Stage 3 Inflammatory breast cancer and has been told due to her lack of NI contributions for the preceding 2 tax years she won't qualify for any benefits.
Page 1
    • Darksparkle
    • By Darksparkle 9th Feb 17, 5:58 AM
    • 4,690 Posts
    • 2,968 Thanks
    Darksparkle
    • #2
    • 9th Feb 17, 5:58 AM
    • #2
    • 9th Feb 17, 5:58 AM
    If she doesn't have sufficient NI contributions then she won't be entitled to contributions based benefits (I assume she is looking to claim esa?).

    Only the last 2 years are relevant for contributions based esa, 2014/15 and 2015/16:

    "You qualify for contributory Employment and Support Allowance (ESA) if you have paid sufficient National Insurance contributions. There are two contribution conditions you must meet:

    First contribution condition - in one of the last two complete tax years, you must have paid Class 1 or 2 contributions on relevant earnings at the lower earnings limit for at least 26 weeks. This means you must have worked for at least 26 weeks of the last two complete tax years; and
    Second contribution condition - in both of the last two complete tax years, you must have paid or been credited with, Class 1 or 2 contributions to the value of 50 times the lower earnings limit."

    If not eligible for contribution based benefits she may be able to claim other benefits but will depend on her household circumstances, the specifics of her condition etc.

    She could use a benefit calculator such as entitledto or you could post more info.

    E.g. Is she seasonal or term time?

    Is she off sick from work? Does she receive sick pay?

    Does she have a partner? If so do they work, what do they earn etc.

    Any children?

    Rent/mortgage?
    • Tiners
    • By Tiners 9th Feb 17, 7:03 AM
    • 223 Posts
    • 222 Thanks
    Tiners
    • #3
    • 9th Feb 17, 7:03 AM
    • #3
    • 9th Feb 17, 7:03 AM
    Thank you for the speedy reply Darksparkle, I'll try and give concise answers/further info...

    -Yes it was ESA she was trying to claim, but, as you say, that's contributions based, on your last 2 years (In her previous job she was paying around £900 a year NI for 15 years, but apparently that counts for nothing in this case)


    -She has been doing seasonal work, around £140 per week from Feb-Oct, but I'm assuming in this case her earnings are calculated over a full year, hence bringing her average wage to below the £112 per week where you get automatically credited with NI contributions?

    -Yes she is off sick but her employer has told her she doesn't earn enough for them to be obligated to pay her sick pay?

    -Her husband works 30 hours per week and comes out with around £220 per week after tax and NI.

    -No children

    -No mortgage, house owned outright


    I've had a quick look at her NI record for the last 4 years on the GovGateway website and that is showing NI shortfalls but they are seemingly random figures for each year, despite her earnings staying roughly the same...

    2015-16 £183
    2014-15 £55
    2013-14 £235
    2012-13 £570

    I'm still struggling to understand the logic behind anyone earning £112-£155 having their NI contributions credited, whilst anyone earning less than £112 has to pay the voluntary contributions indicated above??

    Thank you in advance for any further replies from anyone, it is very much appreciated, I do have to go out to work now so won't be able to add any further until I'm home again this evening.
    • sammyjammy
    • By sammyjammy 9th Feb 17, 8:41 AM
    • 4,235 Posts
    • 4,583 Thanks
    sammyjammy
    • #4
    • 9th Feb 17, 8:41 AM
    • #4
    • 9th Feb 17, 8:41 AM
    It won't help with entitlement to ESA but she should have been credited with NI for the weeks that she worked, National insurance is paid oor not paid on what you earn in a week not annually. Does she have payslips from her seasonal work? If she was paid cash in hand its possible this wasn't reported to HMRC by her employer hence the missing credits.
    "You've been reading SOS when it's just your clock reading 5:05 "
    • Tommo1980
    • By Tommo1980 9th Feb 17, 8:44 AM
    • 301 Posts
    • 390 Thanks
    Tommo1980
    • #5
    • 9th Feb 17, 8:44 AM
    • #5
    • 9th Feb 17, 8:44 AM
    I can't help with the NI query, but as Darksparkle has suggested put your sisters household details into a benefit calculator.

    There are other benefits she may be entitled to that don't depend on NI contributions. PIP would be a significant one as it is not means tested and would bring other entitlements if successfully claimed.

    Tom
    • Darksparkle
    • By Darksparkle 9th Feb 17, 8:58 AM
    • 4,690 Posts
    • 2,968 Thanks
    Darksparkle
    • #6
    • 9th Feb 17, 8:58 AM
    • #6
    • 9th Feb 17, 8:58 AM
    I'd imagine that the logic was not to reward those who choose not to work or only earn a small amount with NI contributions unless there is a reason for having little to no income e.g. Those with young children, disabilties etc can get no contributions if on certain benefits.

    Is there a reason why she couldn't work full time before her diagnosis?
    • TELLIT01
    • By TELLIT01 9th Feb 17, 9:15 AM
    • 4,229 Posts
    • 4,401 Thanks
    TELLIT01
    • #7
    • 9th Feb 17, 9:15 AM
    • #7
    • 9th Feb 17, 9:15 AM
    -Yes it was ESA she was trying to claim, but, as you say, that's contributions based, on your last 2 years (In her previous job she was paying around £900 a year NI for 15 years, but apparently that counts for nothing in this case)

    Originally posted by Tiners
    You are correct in your statement that NI contributions in previous years counts for nothing when claiming benefit. The rights and wrongs of that are potentially a different matter, but that is how the law currently stands.
    She would have had to pay, not be credited with, NI Contributions for a defined period in the 2 qualifying years in order to claim contribution based benefit. From what you say, she has unfortunately not done that. Therefore there is no entitlement to conts benefit. It's as black and white as that. There is no discretion for processing staff to look at previous years.
    When I was working on benefit processing I heard the same complaint many times and, whilst I have enormous sympathy with people in that situation, there was nothing I could do. I also had situations where a claimant would have had entitlement to Contributions based benefit if they had claimed when they became ill. Instead they had lived off savings because 'I didn't think it was right to claim when I had savings', and only claimed when they realised how little they had left. They would then discover they no longer had an entitlement to Conts based benefits because they hadn't worked in the qualifying years.
    To get the most out of the benefits system, you need to decide from day one that you are not going to work, or if you do - don't save a penny.
    • Darksparkle
    • By Darksparkle 9th Feb 17, 9:27 AM
    • 4,690 Posts
    • 2,968 Thanks
    Darksparkle
    • #8
    • 9th Feb 17, 9:27 AM
    • #8
    • 9th Feb 17, 9:27 AM
    WTC wouldn't have given her NI credits unless she was self employed with a small earnings exception.

    Full list of benefits with ni credits is here - https://www.gov.uk/national-insurance-credits/eligibility

    I do understand where you are coming from but if someone chooses to work part time on a low wage why should they get their NI paid for when they could work more?

    ESA is based on employee contributions, not employers contributions (the criteria is post above).
    • Darksparkle
    • By Darksparkle 9th Feb 17, 9:58 AM
    • 4,690 Posts
    • 2,968 Thanks
    Darksparkle
    • #9
    • 9th Feb 17, 9:58 AM
    • #9
    • 9th Feb 17, 9:58 AM
    Voluntary contributions are Class 3, they contribute to state pension, not contributions based benefits.
    • sammyjammy
    • By sammyjammy 9th Feb 17, 10:17 AM
    • 4,235 Posts
    • 4,583 Thanks
    sammyjammy
    It won't help with entitlement to ESA but she should have been credited with NI for the weeks that she worked, National insurance is paid oor not paid on what you earn in a week not annually. Does she have payslips from her seasonal work? If she was paid cash in hand its possible this wasn't reported to HMRC by her employer hence the missing credits.
    "You've been reading SOS when it's just your clock reading 5:05 "
    • sheramber
    • By sheramber 9th Feb 17, 6:17 PM
    • 3,947 Posts
    • 2,941 Thanks
    sheramber
    It won't help with entitlement to ESA but she should have been credited with NI for the weeks that she worked, National insurance is paid oor not paid on what you earn in a week not annually. Does she have payslips from her seasonal work? If she was paid cash in hand its possible this wasn't reported to HMRC by her employer hence the missing credits.
    Originally posted by sammyjammy
    She is only entitled to credit if she earned over the lower limit for that week.

    Has she not been credited?

    The figures given are the shortfall in the credits for the year, not the amount that has been credited.
    • Alice Holt
    • By Alice Holt 12th Feb 17, 8:58 PM
    • 1,577 Posts
    • 1,682 Thanks
    Alice Holt
    Would PIP be a possibility?
    Does your partner have care needs?
    It's not means tested, and doesn't rely on NI contributions.
    https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/pip/before-claiming/check-you-are-eligible/

    May be worth your partner speaking to Macmillan.
    http://www.macmillan.org.uk/information-and-support/organising/money-worries/index.html?origin=HP-2017
    They may have a welfare benefits adviser in your area who could advise on the likelihood of PIP eligibility.
    Last edited by Alice Holt; 12-02-2017 at 9:02 PM.
    • Darksparkle
    • By Darksparkle 13th Feb 17, 6:12 AM
    • 4,690 Posts
    • 2,968 Thanks
    Darksparkle
    Where have you got that information regarding WTC? It isn't correct.

    WTC is based on the joint household income. If your joint income is less than £18,000 then you can claim WTC as a couple.

    However as I posted before, she's have only got NI credits from WTC if she had a small earnings exception (which is for the self employed, not the employed) and it would have been class 3 credits, not class 1.
    • NeilCr
    • By NeilCr 13th Feb 17, 7:38 AM
    • 1,098 Posts
    • 1,213 Thanks
    NeilCr
    Not sure about your information on carers allowance either

    It's about the salary you earn not the hours you work

    https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/benefits-for-people-who-are-sick-or-disabled/#benefits_for_carers

    I do get that if you are working 30 hours you are unlikely to qualify but it may help you with planning for the future
    • partypopper
    • By partypopper 9th Apr 17, 6:47 PM
    • 2 Posts
    • 2 Thanks
    partypopper
    This discussion has re enforced, yet again, to me that the poor who make effort to accept part time or low earning jobs seem to be worse off than those who do not work ( except for those that cant work- eg carers- dont get me started on the pittance that carers live on). For instance low earning families might get some tax credits but they miss out on free school meals and pupil premiums which the unemployed get.
    My husband earns 13,000 and I have not had a job for the last 7 years. We get working tax credit and child tax credit for my daughter who is now age 16. I have always understood that because my husband works, after having my contribution based JSA for 6 months, I would never be able to claim income based JSA.
    I always knew that when one person in a couple works, the other person has to live off them, which to me is wrong because there ought to be incentives for couples to live together. (my husband could have got the same benefits over the years and maybe even more, if I was not living with him- so unfair) nevertheless I have always accepted that I would get no JSA whether or not I look for work, while my husband works full time. However what I did not know was that I would be missing out on national insurance contributions for the last 5 years for my pension. I have not worked since my daughter turned age 11 and back then when I enquired about national insurance credits, i was told that I would be credited until she turns 16 and that I needed 30 years of credits for a full pension.
    The rules have changed. still no JSA money as expected but I was shocked to find out that another 5 years are needed for the full pension - change from 30 years to 35 years needed for a full pension plus I am missing credits for another 5 years because credits stopped as soon as my child turned 12. Thats 10 unexpected years that I am missing from my pension. It just shows how we have to keep up with the rules and thank goodness these forums are here for us to share news and help each other.

    Years ago, i was also told that families on WTC also get credits for national insurance contributions and recently some people including one from HMRC said that too but I think she was wrong Can anyone confirm if WTC does help anyone to get NI credits.?
    Also , You may wonder why I havent worked, well I have cared for my parents whom have up and down illnesses which havent qualified them for middle rate DLA ( so no carers allowance money) my mum has only a pension of about £76 and no benefits whereas my dad has lower rate DLA and state pension which he shares with mum.I have never taken a penny off them to care for them because they struggle to make ends meet too. comments welcome .
    • Dazed and confused
    • By Dazed and confused 9th Apr 17, 7:07 PM
    • 1,936 Posts
    • 872 Thanks
    Dazed and confused
    Have you applied for Marriage Allowance?

    If you have insufficient income to use your tax allowance your husband may get a tax reduction if you apply.

    Note:. You, as the lower earner must apply NOT your husband
    • p00hsticks
    • By p00hsticks 13th Apr 17, 5:55 PM
    • 5,771 Posts
    • 5,544 Thanks
    p00hsticks
    T
    The rules have changed. still no JSA money as expected but I was shocked to find out that another 5 years are needed for the full pension - change from 30 years to 35 years needed for a full pension plus I am missing credits for another 5 years because credits stopped as soon as my child turned 12. Thats 10 unexpected years that I am missing from my pension. It just shows how we have to keep up with the rules and thank goodness these forums are here for us to share news and help each other.
    .
    Originally posted by partypopper
    Have you got a pension forecast ?
    https://www.gov.uk/check-state-pension

    There are transitional rules in place which means that you will get at least as much as you were entitled to under the old rules creditted as your 'starting amount' calculated as at 6/4/16. If this amount is less than £155.65 then you have the opportunity to earn or buy additional NI years from 2016-17 onwards to increase your weekly pension by £4.45 a week for each year up to that maximum amount

    So the change in pension rules has not lost you anything, and has possibly given you an option to increase your pension further.
    • fablanta
    • By fablanta 29th Nov 17, 5:21 PM
    • 46 Posts
    • 21 Thanks
    fablanta
    State Pension shortfall
    Have you got a pension forecast ?
    https://www.gov.uk/check-state-pension

    There are transitional rules in place which means that you will get at least as much as you were entitled to under the old rules creditted as your 'starting amount' calculated as at 6/4/16. If this amount is less than £155.65 then you have the opportunity to earn or buy additional NI years from 2016-17 onwards to increase your weekly pension by £4.45 a week for each year up to that maximum amount

    So the change in pension rules has not lost you anything, and has possibly given you an option to increase your pension further.
    Originally posted by p00hsticks
    I too was shocked to find out in a casual remark by Martin in his ITV Money Show that the requirement had gone up from 30 to 35 years (in 2016). When I checked online I found that I had a shortfall of 7 years (on top of the 31 I had already put in). Under the old rules I would have been entitled to a MAXIMUM (contracted out) pension. but the rule change sees my weekly (projected) pension reduced by £30.51 (19.1%) off the max.

    While I can get by on my current income I do not have the thousands of pounds it would cost to buy back the deficit. So, after a gap of 7 years when I counted myself as retired, I now have to go back to signing on (for £ZERO) and looking for work for at least the next 6.85 years to top up my weekly pension by the rate of 9p per week, that's if the rules don't change again (instead of the extra 4 years I would have needed if I just continued). So, from my point of view, I have lost out.
    Last edited by fablanta; 29-11-2017 at 5:56 PM. Reason: Clarification
    • p00hsticks
    • By p00hsticks 29th Nov 17, 5:59 PM
    • 5,771 Posts
    • 5,544 Thanks
    p00hsticks
    I too was shocked to find out in a casual remark by Martin in his ITV Money Show that the requirement had gone up from 30 to 35 years (in 2016).
    Originally posted by fablanta
    Bear in mind that prior to 2010, the requirement for a full state pension was 44 years for a man and 39 years for a woman. So it was only set at 30 years for a relatively short period of time.

    When I checked online I found that I had a shortfall of 7 years (on top of the 31 I had already put in). Under the old rules I would have been entitled to a MAXIMUM (contracted out) pension. but the rule change sees my weekly (projected) pension reduced by £30.51 (19.1%) off the max.
    Originally posted by fablanta
    It may be £30.51 off the new maximum, but that maximum is around £40 more than the 'basic' pension you would have got under the old rules (assuming you have spent your whole working life so far contracted out). So you have not lost anything, and in fact stand to gain as you have an possible opportunity to increase your state pension to the new maximum - considerably more than you would have been expecting under the old system - by working, getting creditted with or buying additional years
    Last edited by p00hsticks; 29-11-2017 at 6:05 PM.
    • xylophone
    • By xylophone 29th Nov 17, 7:36 PM
    • 23,611 Posts
    • 13,748 Thanks
    xylophone
    You are getting no less than the amount to which you were entitled under the old rules.

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

    but for BSP read £119.30 and for NSP £155.65

    https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

283Posts Today

1,161Users online

Martin's Twitter