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ESA - should I top up my NI class 2?

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ESA - should I top up my NI class 2?

edited 30 November -1 at 1:00AM in Benefits & Tax Credits
15 replies 655 views
Lou123456Lou123456 Forumite
3 posts
edited 30 November -1 at 1:00AM in Benefits & Tax Credits
Hello everyone.

No one seems to be able to tell me either way at ESA or my MP’s office

I am disabled and in April 2018 claimed ESA & PIP. I got enhanced pip and esa rejected my claim saying I didn’t have enough NI contributions in my last working year (16-17) of self employment before my legs stopped working...

Finally after mandatory reconsideration CAB and MP. They will look at my claim again as I should be entitled?

I could pay £156 to top up my class 2 for that year (16-17), will that then allow me to claim ESA?

Can you retrospectively top up NI to class 2, to gain access to ESA?

My husband is on sick leave at present with complex mental health and is being medically discharged from the military so even though he gets his wage right now, he won’t be in a few months time.

I’m confused! I have all my NI contributions for all my life as always worked. Just my final year I only paid class 4 as only made a small profit before I closed my business...

Don’t want to pay it to find they say no still, and no one at ESA will answer me clearly...
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  • edited 16 November 2019 at 8:13AM
    calcotticalcotti Forumite
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    edited 16 November 2019 at 8:13AM
    Lou123456 wrote: »
    ...
    Finally after mandatory reconsideration CAB and MP. They will look at my claim again as I should be entitled?

    I could pay £156 to top up my class 2 for that year (16-17), will that then allow me to claim ESA?

    Can you retrospectively top up NI to class 2, to gain access to ESA?

    What you have written is contradictory. You say that you have requested an MR because you should be entitled but also say that your NI contributions are incomplete. If your NI contributions are incomplete you are not entitled

    You can pay your Class 2 contributions to complete your record and thereby become entitled. If you claim now the years ESA will look at are tax years 2016-2017 and 2017-2018, both years need to be complete through either paid contributions or credits. You say that 16-17 was the last year you worked so what credits or contributions will you have in 17-18?

    If you claim after the first Sunday in January 2020 the years they look at will be 17-18 and 18-19.

    There is one other complication. If you pay Class 2 contributions late I believe that they are not treated as paid until 6 weeks later which results in a 6 week delay between paying and qualifying for benefit. I do not know whether, once you have paid the NI, you can ask for an any time revision of the decision to disallow the previous claim or whether you will be expected to make a new claim. To avoid any confusion about which NI years are being considered, given that we are only 7 weeks away from the end of the year, if you want it to be 16-17 and 17-18 that are considered I would pay immediately and, if necessary, make a new claim before the end of this year. Others may be able to provide more information about this.

    Have you looked at PIP for your husband?

    Once he is discharged he will be able to claim New style ESA himself. Note however that if he will be getting any military pension this will need to be disclosed and if it is more than £85/week it will reduce the amount of ESA payable to him.

    If you will be on a low income and do not have savings over £16,000 you may be entitled to Universal Credit.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Thank you for that...

    I have credits from child benefit since I closed my business down. So 17-18 & 18-19 are CHB credits, does that qualify me in 2020?

    I spoke to NI helpline who said it can take 2-6 weeks to be updated once I’ve paid it...very confusing situation...
  • Yes we have applied for PIP for my husband as he was in psychiatric hospital and it still poorly unfortunately...

    He will get a pension as he has done most of his 22 years and would have left with that had he not suffered ill health from war.

    He will also at some point get AFCS but no idea how much. Also will commute some pension to a lump sum of about £40k so we can try and buy a property.

    Pension guys told him it would be about £600pm
  • calcotticalcotti Forumite
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    Relevant parts of HMRC NI manual are here
    https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim23001
    Class 2 NICs are marked late (L) for benefit purposes if they are paid on or after the first Sunday in January following the end of the tax year in which they were due, and not later than six tax years from the end of the contribution year in which they were due.

    If Class 2 NICs are marked as late they are treated as paid on the day after the end of 42 days that starts on the date on which the Class 2 NICs were paid.

    Class 2 NICs due from 6 April 1983 are treated as not paid and marked extra late (LX) if they are paid more than six tax years after the end of the contribution year in which they were due. The contributions do not count towards long or short term benefits.

    You can see therefore that payments that are late, but not extra late, do count for benefit purposes.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • poppy12345poppy12345 Forumite
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    Lou123456 wrote: »

    I have credits from child benefit since I closed my business down. So 17-18 & 18-19 are CHB credits, does that qualify me in 2020?
    These count towards your state pension only.
  • calcotticalcotti Forumite
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    As poppy says NI credits from child benefit are Class 3 and only count towards State Pension.

    Even if you pay Class 2 contributions to complete your 16-17 record you will still not qualify for New style ESA if your only contributions for 17-18 are the Class 3 credits.

    If you were still registered as self employed you could pay Class 2 contributions for 17-18 also in order to qualify.

    Obviously to stay on ESA you would have to be found to have Limited Capability for Work. If you are then even if you had to pay a full 2 years of Class 2 contributions you would get the money back over a fairly short period. The cost of 2 years is about £300 and even at assessment rate you would have earned this back after 4 and a half weeks. Obviously if no longer registered as self employed this is not an option.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • calcotticalcotti Forumite
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    If your husband’s pension is £600/month it will still be worth him applying for ESA himself. The amount he receives will be reduced because of the pension but he will still be entitled to something if found to have LCW.

    £600/month is £138/week so there would be a deduction of £26.50. At assessment rate he would get £73.10 - £26.50 = £44.60/week. If put in Support a Group it would be £85.15/week.

    Note: new style ESA is taxable income.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • TELLIT01TELLIT01 Forumite
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    I have something ticking away in the back of my brain about military disability pensions being treated differently to others, but can't recall the detail. It's possible any different treatment practice has ended, but I thought it worth mentioning.
  • TELLIT01TELLIT01 Forumite
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    Lou123456 wrote: »



    I’m confused! I have all my NI contributions for all my life as always worked. Just my final year I only paid class 4 as only made a small profit before I closed my business...

    Don’t want to pay it to find they say no still, and no one at ESA will answer me clearly...


    That is a comment I heard many times when I was processing ESA claims. The simple reality is that only the 2 most recent full tax years are taken into account when assessing entitlement to Contribution base benefits. I even came across cases where people had put off claiming because they thought they had to use their savings before they could apply, and consequently not only lost out on their entitlement to Conts ESA, but had lost their savings too.
  • edited 16 November 2019 at 11:20AM
    sportsarbsportsarb Forumite
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    edited 16 November 2019 at 11:20AM
    TELLIT01 wrote: »
    I have something ticking away in the back of my brain about military disability pensions being treated differently to others, but can't recall the detail. It's possible any different treatment practice has ended, but I thought it worth mentioning.

    If it is the benefit paid by the DWP (Agency that I can't remember the name of, it was separate to everything else in DWP) called War Disablement Pension, WD Allowance etc. then it is treated differently from normal pensions. Most of it is disregarded on ESA(C) or New Style apart from Unemployability Supplement.

    Occupational pensions from the MOD, as an employer, fall to be treated as every other workplace pension.
    calcotti wrote: »
    What you have written is contradictory. You say that you have requested an MR because you should be entitled but also say that your NI contributions are incomplete. If your NI contributions are incomplete you are not entitled

    Quite often as part of the MR/Appeal process the DM will advise on how to remedy the situation, at least when it comes to NIC decisions, because it can form part of the decision in that 'this claimant is not entitled as they have not paid x contributions but as they were self employed they can make late paid contributions and become entitled after 6 week penalty'. It might be that this isn't exactly what has taken place here but it certainly sounds like it could be.
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