Paying shortfall Class 2 NI Conts / ESA

Emmamumof2

Further to my previous thread, Ive spoken to DWP this morning.


They confirmed I need another 13 weeks in 2011/12 of Class 2 NI's to be eligible for ESA. I am actually 'missing' 15 weeks but I understand you only need 50 out of 52 weeks in credits for ESA.


I explained I'd written to HMRC and sent a cheque for £42.50 which is what the chap at HMRC told me to pay to get the NI contributions brought up to date in the 2011/12 tax year for this purpose. She explained that they need to be credited as class 2 not class 3 and if they are 'late' there would be a delay of 6 weeks on the ESA, which I understand.


So I then phoned HMRC and asked if the lady would put a note on the file that I'd like these to be treated as Class 2 conts not class 3 for this purpose. But she didn't know how they would be applied.....


few questions:


1) If the chap at HMRC told me to pay £42.50 is that the current class 2 cost of £2.70 per week for the missing 15 weeks to be considered 'late' class 2 conts NOT voluntary class 3 conts?


2) Why would they be applied as class 3 voluntary conts over class 2 conts and marked late? Presumably as the amount I was told to send was 'only' £42.50 that appears to be low for the chap at HMRC to have been referring to Class 3 voluntary, yes?


Any idea how long it will take HMRC to update my record? They received the cheque/letter a week ago - I sent recorded delivery.

rogerblack

My understanding is this is not possible.

You cannot pay for the required weeks.
These weeks you have paid for will count towards your pension - they will not count at all for ESA.
This is intentional - as otherwise paying about 340 quid would qualify you for ESA-conts at 5000 a year or so.

Emmamumof2

Given that the HMRC NI office told me to do it this way they must have this type of enquiry and that was their response I also found this other thread


https://forums.moneysavingexpert.com/discussion/2623419


Likewise, the lady at the DWP was very familiar with the arrangements in place.


Also, although I am seeking advice re ESA the following is on the HMRC website re topping up class 2 contributions 'late'


Extended time limits for the tax years 2006-07 to 2015-16

If you are affected by the proposed changes to simplify future State Pension you have more time to pay voluntary Class 2 or Class 3 National Insurance contributions for the years from 2006-07 to 2015-16. The extended time limits apply if:

• you reach State Pension age on or after 6 April 2016
• and you make payment by 5 April 2023

So as I meet the conditions I am eligible to pay the shortfall in class 2 contributions for 2011/12 as 'late' contributions and not as voluntary class 3 contributions therefore making me eligible to ESA.


I would note I have always paid class 2 NI (and indeed class 4 NI) since being self employed over 10 years ago and it is terribly unfortunate that due to the bankruptcy they took £42 worth of NI into the bankruptcy without my knowledge.

midnight_express

Voluntary conts don't entitle you to E S A.

Emmamumof2

But Im not asking them to be applied as voluntary conts class 3 - Im asking for them to be credited as class 2 'missing' conts. can class 2 still be voluntary?

epitome

Voluntary class 3 cost about £13 per week so your £42 would not go very far with class 3.

Lurkerderp

You can back pay Class 2 contributions for up to six years for benefit/pension purposes. However, after a certain amount of time you lose the right to pay them at the weekly rate for that particular year and have to pay them at the current rate.

Once you've paid the shortfall you usually have to wait six weeks before you can make another ESA claim.

Lurkerderp

https://www.gov.uk/employment-support-allowance/how-to-claim

I'm assuming that a claim has already been made and refused due to insufficient contributions. A new claim will have to be made once the NI record is updated.

I think the confusion with voluntary contributions may be that standard voluntary contributions (Class 3, currently £13.55 per week) don't count towards ESA, however if you are self employed but earning less than £5,725 per year you can pay voluntary Class 2 contributions at £2.70 per week which do count towards ESA.

Lurkerderp

Couldn't find anything but I know it can be done.

MissMoneypenny

Lurkerderp wrote: »

I think the confusion with voluntary contributions may be that standard voluntary contributions (Class 3, currently £13.55 per week) don't count towards ESA, however if you are self employed but earning less than £5,725 per year you can pay voluntary Class 2 contributions at £2.70 per week which do count towards ESA.

Even if you could find the guidanace that says that: is the OP registered with HMRC as self employed?

EDIT Just looked at your other posts and seen that your NI contributions are short because you put your self employed NI arrears in your bankruptcy.
https://forums.moneysavingexpert.com/discussion/comment/63880406#Comment_63880406

Emmamumof2

Yes you're right the £42 fell into bankruptcy but not out of choice - I didn't 'put' them into bankruptcy, the official receiver went to HMRC and said anything owed at moment goes into BR - as Class 2 Self emp NI cont are paid in arrears they were included - not my choice but hey, its happened now - HMRC tell me I can pay the "missing" class 2 contributions for £42.50 and DWP have told me this morning as long as they are classed as 'late' class 2 that I will be eligible for cont based ESA so Ill wait for HMRC confirmation that they've been applied and contact the lady at the DWP again - she didn't say a new application had to be made, she said she'd just check the system =- Ill update either way for the benefit of others once its been resolved. As HMRC quoted the figure needed of £42.50 to be paid to make up the class 2's, epitome is right that that would go far for £13 pw voluntary conts so HMRC must indeed be talking about paying for the missing class 2's at the current rate of £2.70.... as I said Ill wait and see and update either way.


I have read of other people doing this successfully,


http://www.rightsnet.org.uk/forums/viewthread/1694/

http://www.bbc.co.uk/ouch/messageboards/F2322273?thread=7260106


http://www.rightsnet.org.uk/forums/viewthread/1052/