Please help me understand National Insurance rules relative to benefits/pension

Lady_Medusa

Having been refused ESA because I haven't paid enough National Insurance I'm trying to make sense of the system :-)

Please could somebody confirm that I have been given the correct information, as the DWP employee didn't seem at all sure :-(

1. In a tax year, if I or an employer pay NI, or I am credited with NI if on benefits, for 52 weeks, that year counts towards my pension and counts if I need to claim ESA or Jobseeker's Allowance. If even ONE week is missed, the year counts for nothing.

2. If my payslip shows no NI payment, as long as I have earned £107 in that week (current Lower Earnings Limit) my employer will have paid NI so that week WILL count towards pension AND benefits.

3. To claim ESA or Jobseeker's Allowance, two previous years are taken into consideration. In ONE of these years I must have paid NI MYSELF for at least 26 weeks, and in BOTH of those years I cannot have missed even a single week of NI being either credited, or paid by myself or my employer.

4. If I earn less than £107 in any week, that whole tax year counts for nothing (unless I make up the shortfall subsequently, in which case it will count towards my pension, but NOT towards benefits).

If I have all this right, this year is already a bust, so I can apply for my dream job which will barely give me enough to live on, but hey - it's my dream job! :-)

Many thanks in advance to anyone who can answer my questions.

p00hsticks

Lady_Medusa wrote: »

1. In a tax year, if I or an employer pay NI, or I am credited with NI if on benefits, for 52 weeks, that year counts towards my pension and counts if I need to claim ESA or Jobseeker's Allowance.

I'm not 100% sure, but I don't think the bits I've highlighted in bold above are completely correct - NI credits obtained whilst you are on benefits will count towards your pension, but don't count when deciding if you are entitled to towards contributions based ESA or JSA.

Lady_Medusa wrote: »

1To claim ESA or Jobseeker's Allowance, two previous years are taken into consideration. In ONE of these years I must have paid NI MYSELF for at least 26 weeks, and in BOTH of those years I cannot have missed even a single week of NI being either credited, or paid by myself or my employer.

This applies to CONTRIBUTIONS BASED ESA or JSA only - if you do not quailify for these then you may be eligible for (means tested) INCOME RELATED ESA or JSA, depending on you level of savings, other income etc.

FYI, the two years used in the calculation are the last two full tax years before the start of the current 'benefit year' (which is near enough the same as the calendar year). So at the moment, that is tax years 2009-10 and 2010-11. In January 2013 the years to be considered will change to 2010-11 and 2011-12.

enabledebra

As has been said, the tax years taken into account for a claim for ESA made after April this year are 09/10 and 10/11 (the last 2 complete tax years before the current ‘benefit year’ which starts in Jan)
It’s not about how many weeks NIC’s are paid it’s how much has been paid/credited in the tax year. This is based on a figure they call the lower earnings limit which changes each year and to satisfy the contribution conditions NICs must have been paid on earnings 50x that year’s LEL in both 09/10 and 10/11
Lel 10/11 £97x 50 = NIC’s must have been paid on earnings of £4850
Lel 10/11 £95x 50 = £4750
Full i8nfo here
http://www.dwp.gov.uk/docs/dmgch41.pdf

Cpt.Scarlet

You are confusing NI Contributions that are accrued from employment and NI Credits that come from receiving an appropriate benefits or can be purchased.

For a new claim for ESA you need to meet 2 conditions (in simple form);

- You require 26 weeks of NI Contributions in either of the 2 qualifying tax years, and
- 50 weeks of NI Contributions and/or NI Credits in both of the 2 qualifying years.

As NI Contributions are based on a % of your earnings it is possible to accrue the necessary number of NICs in less than the equivalent number of weeks.

There are other ways to qualify, such as having been entitled to Carers Allowance.

Lady_Medusa

Many thanks to all who replied - think I'm up to speed now :-)