NI 'Stamp' on Income Based Job Seekers Allowance

Spruance

I am into the last six weeks of a claim for Contributions based JSA. and already know that I do not meet the criteria for Income based JSA as my savings exceed the £16k limit. However, the Jobcentre staff say that I could still continue to sign on to get my NI contributions stamp.

The question is, is it worth it? I already have 30+ years of past NI contributions so already qualify for a full state pension based on current legislation, or is there some other advantage that I don't know about?

NASA_2

Depends, if you are likely to become employed again then there are advantages to signing on while waiting, if you get a job then become unemployed again those credits can potentially help you become entitled to contributory benefits again.

concerned43

Yes, if you require benefits in the future you would need to show at least 2 years continuous NI contributions!

Spruance

Thanks guys I hadn't thought about future benefits. That's the trouble with the Jobcentre, they never explain anything properly.

Suzkin

Really sorry, (also for late response - just stumbled on your thread) but my understanding is that the 2 years 'continuous' contributions MUST be from PAID employment (i.e. not from simply signing on, in order to gain NI credits to help with JSA).

NI stamp is helpful only for entitlement for pension, which it appears, as you say, you are already eligibel for.

NASA_2

Suzkin wrote: »

Really sorry, (also for late response - just stumbled on your thread) but my understanding is that the 2 years 'continuous' contributions MUST be from PAID employment (i.e. not from simply signing on, in order to gain NI credits to help with JSA).

NI stamp is helpful only for entitlement for pension, which it appears, as you say, you are already eligibel for.

You do not have to have paid two years 'continuous' contributions. That would be insanely difficult for seasonal workers to qualify for JSA(C).

The Contribution conditions are quoted below:

Contribution-based conditions and duration of JSA(Cont)
Contribution-based conditions
Definitions
Benefit year
21051 A benefit year is the period that1
1.
begins with the first Sunday in January in any calendar year and
2.
ends with the Saturday immediately before the first Sunday in January in the next calendar year.
1 JS Act 95, s 2(4)(a); SS CB Act 92, s 21(6)
Class 2 contributions and volunteer development workers
21052 A person who works abroad as a volunteer development worker1 (for example, for an organization such as Voluntary Service Overseas) may be entitled to pay special Class 2 contributions under specific legislation2. HMRC decides whether a person is entitled to pay the special Class 2 contributions. But this only applies if that person is3
1.
ordinarily resident in GB (see DMG 070769) and
2.
employed outside GB (see DMG 070712).
1 JSA Regs, reg 167; SS (Contributions) Regs 79, reg 123A(1); 2 reg 123C; 3 reg 123A(2)
Relevant benefit year
21053 The relevant benefit year1 is the benefit year that includes the beginning of
1.
the current JSP or
2.
any linked period that ends within twelve weeks of the start of a
2.1 JSP or
2.2 linked period2
whichever is earlier.
Note: See DMG 21022 for guidance on calculating the twelve weeks.
1 JS Act 95, s 2(4)(b); 2 JSA Regs, reg 48(2A)
Vol 4 Amendment 33 February 2011
Contribution-based conditions 21054 21062
Special Class 2 contributions
21054 Special Class 2 contributions are1 any Class 2 contributions paid by a share fisherman2.
1 JSA Regs, reg 158(3); 2 SS (Contributions) Regs 79, reg 98(c)
Tax year
21055 A tax year is a period of twelve months beginning with 6 April of any year1. For example, the tax year beginning April 1996 is the period 6.4.96 - 5.4.97.
1 JS Act 95, s 35(1)
21056 - 21059
General
21060 The contribution-based conditions for entitlement to JSA(Cont) are that the claimant
1
must
1.
satisfy the first contribution condition (see DMG 21067 - 21071) and
2.
satisfy the second contribution condition (see DMG 21074 - 21076) and
3.
not have earnings higher than the prescribed amount (see DMG 21081 21082) and
4.
not be entitled to IS.
Note: Claimants who do not make a claim for IS cannot be entitled to IS.
1 s 2(1)
HM Revenue and Customs questions
21061 HMRC decide whether Class 1 or Class 2 contributions have been paid or credited in any year1.
1 SSC (ToF) Act 99, s 8(1)(e); R(JSA) 8/02
What the DM decides
21062 The DM determines whether the contribution conditions are satisfied1, including
1.
the earnings factor derived from Class 1 or Class 2 contributions and
2.
the beginning of the relevant benefit year and
3.
which are the relevant income tax years and
4.
the years in which the contributions must have been paid or credited.
1 SS Act 98, s 8(1)
Vol 4 Amendment 33 February 2011
Contribution-based conditions 21063 21069
Reference to HMRC
21063 Entitlement to JSA(Cont) depends on the contribution conditions being satisfied. In practice the NI contribution record is usually obtained and any decision is based on the assumption that the record is factually correct. However, where there is a dispute about the record, the matter must be referred by the DM to HMRC for a formal decision1.
Note 1: See DMG Chapters 03, 04 and 06 for guidance on how decisions and appeals are handled after a reference to HMRC.
Note 2: See DMG Chapter 01 where the dispute is about whether credits should be awarded.
1 SS CS (D&A) Regs, reg 11A and 38A
21064 - 21066
First contribution condition
General
21067 To satisfy the first contribution condition1
1.
the claimant must have paid Class 1 contributions in respect of one (“the base year”) of the last two complete tax years before the beginning of the relevant benefit year and
2.
Class 1 contributions must have been paid before the week that the claimant claims JSA and
3.
the claimant must have had relevant earnings for the base year on which the Class 1 contributions have been paid or treated as paid of at least 26 times the LEL for that tax year (see DMG Appendix 1 to this Chapter).
1 JS Act 95, s 2(1)(a), 2(2) & 35(1)
Share fishermen
21068 For share fisherman DMG 21067 1. can include Class 1 or special Class 2 contributions1. 1 s 2(1)(a), 2(2) & 35(1); JSA Regs, reg 158(2)
Volunteer development workers
21069 For volunteer development workers 21067 1. can include1 Class 1 contributions or Class 2 contributions2.
1 JS Act 95, s 2(1)(a), 2(2) & 35(1); JSA Regs, reg 167; 2 SS (Contributions) Regs 79, Part VIII, Case G
Vol 4 Amendment 33 February 2011
Contribution-based conditions 21070 21076
Determining relevant earnings
21070 Relevant earnings are determined by the number of weeks worked in the base year. The relevant earnings are the total amount of earnings at the level of LEL1.
1 JS Act 95, s 2(2A); JSA Regs, reg 45A(1)
21071 When working out the relevant earnings, any earnings in excess of LEL are ignored1.
1 reg 45A(2)
21072 - 21073
Second contribution condition
General
21074 To satisfy the second contribution condition1
1. the claimant must have
1.1 paid Class 1 contributions or
1.2 been credited with earnings for the last two complete tax years before the beginning of the relevant benefit year
and
2. the earnings factor from the earnings
2.1 on which primary Class 1 contributions have been paid or treated as being paid or
2.2 credited
must be at least 50 times the LEL for each of those last two complete tax years (see DMG Appendix 1 to this Chapter).
1 JS Act 95, s 2(1)(b), 2(3) & 35(1)
Share fishermen
21075 For share fishermen DMG 21074 1.1 and 2.1 can include Class 1 or special Class 2 contributions1.
1 s 2(1)(b), 2(3) & 35(1); JSA Regs, reg 158(2)
Volunteer development workers
21076 For volunteer development workers DMG 21074 1.1 and 2.1 can include1 Class 1 contributions or Class 2 contributions for volunteer development workers2.
1 JS Act 95, s 2(1)(b), 2(3) & 35(1); JSA Regs, reg 167; 2 SS (Contributions) Regs 79, Part VIII, Case G
Vol 4 Amendment 33 February 2011
Contribution-based conditions 21077 21082
Earnings at or below the LEL
21077 People who have earnings at or below the LEL and people who have earnings above the LEL do not have to pay any contributions on earnings at or below the LEL1.
1 SS CB Act 92, s 6A
21078 The earnings
1.
on which primary Class 1 contributions have been paid or treated as paid, that did not exceed the UEL and
2.
at or below the LEL
count towards satisfying the second contribution condition1.
1 JS Act 95, s 2(3A)
21079 - 21080
Prescribed amount of earnings
21081 Claimants are not entitled to JSA(Cont) for any week that they have earnings that are higher than the prescribed amount (see DMG 21060 3.)1.
1 JS Act 95, s 2(1)(c)
21082 The prescribed amount of the claimant's earnings is calculated by using the formula1 (A + D) - £0.01 where
1.
A is the age-related amount that is appropriate to the claimant's age and
2.
D is any earnings disregard appropriate to the claimant as in2
2.1 DMG 25082 -25083 (two payments to be taken into account for the same week because of the impracticability rule, first of two payments due before the date of claim) and
2.2 DMG 26101 -26102 (disabled persons, repeat claims) and
2.3 DMG 26107 (lone parents) and
2.4 DMG 26114 -26133, (carers, special occupations, earnings from one or more occupations, JSA(IB) and IS - couples, amount of disregard, earnings paid for employment which has been interrupted, earnings payable outside UK, earnings paid in a foreign currency) and
2.5 DMG 26417 (effects of awards for unfair dismissal) and
2.6 DMG 26642 -26647 (remunerative work, P/T work and payments on termination) and
Vol 4 Amendment 33 February 2011
Contribution-based conditions 21083 21086
2.7 DMG 27471 (Earnings from self-employment that has ceased).
1 JSA Regs, reg 56(1) & (2); 2 reg 99(2) & 101(2) & Sch 6, para 1-16 & 19
Example
A 30 year old man is entitled to an age-related amount of £50.00 a week.
He is entitled to a disregard of £5.00 a week.
Applying the formula - (£50.00 + £5.00) -£0.01 = £54.99.
If the claimant has earnings of more than £54.99 a week he is not entitled to JSA(Cont).
Late payment of contributions
21083 The DM determines whether the contribution conditions for JSA(Cont) are satisfied. Contributions paid after the due date are generally treated as paid on the date of payment. However there are circumstances in which the DM may accept that contributions are treated as having been paid on an earlier date1. The DM will need to liaise with HMRC.
1 SS (Conts) Regs, reg 60-65; SS (Crediting etc) Regs, reg 4
21084 - 21086
Vol 4 Amendment 33 February 2011