Unemployed and NI contributions

itwasntme001

Hello,

My partner has been unemployed for a number of years and is not really sure when she will be back to work.  She does have significant savings and investments so not at all worried financially.  She got contribution based JSA soon after leaving her last employment but obviously can not get this again.

I heard that she may still be able to get NI credits or something by signing on at the job center so that perhaps she can get more years towards her state pension (without being employed).  She currently needs around 15 more years to get the full state pension.

We have no idea how this works as we are completely clueless about this and we may even be wrong about this and its not actually possible.  But can someone help to clarify my understanding around this and if it is possible what the exact steps are?

Many thanks in advance.

eskbanker

Worth reading both pages at https://www.gov.uk/national-insurance-credits and reverting with any specific questions thereafter....

itwasntme001

Thanks, so it appears she can get class 1 credits by contacting the job center as she is unemployed and will be looking for work.

My questions are what actually needs to be done, is it just a quick phone call?  What does class 1 credits mean, will it be enough to get the year as qualifying for state pension?  Would she need to add more money?

She also has a buy to let property (her only source of income currently) which she used to live in but now lives with me.  She started letting this out this current tax year so obviously will fill in a SA.  I understand she may be classed as self employed (not sure though) in which case can contribute to class 3 credits?  How does this differ from the above class 1 credits?

eskbanker

itwasntme001 said:

Thanks, so it appears she can get class 1 credits by contacting the job center as she is unemployed and will be looking for work.

My questions are what actually needs to be done, is it just a quick phone call?

As explained in that article, class 1 credits are automatically made when on JSA - they're essentially a by-product of the process, so she should register with the job centre (https://www.gov.uk/contact-jobcentre-plus) in the first instance and take it from there.

itwasntme001 said:

What does class 1 credits mean, will it be enough to get the year as qualifying for state pension?  Would she need to add more money?

Yes, they're sufficient to qualify for pension purposes without additional top-up contributions being needed.

itwasntme001 said:

She also has a buy to let property (her only source of income currently) which she used to live in but now lives with me.  She started letting this out this current tax year so obviously will fill in a SA.  I understand she may be classed as self employed (not sure though) in which case can contribute to class 3 credits?  How does this differ from the above class 1 credits?

She needs to establish whether she's self-employed or unemployed, and either pay class 3s or receive class 1s accordingly, but not both!

dunstonh

If you sign on, you are credited with NI.  However, she needs to be actively looking for work and will need to show that.   Choosing not to work will not get her credits.

itwasntme001

Thanks for both your replies.

I am still confused however.  From my understanding she can only get a new style JSA and only if she has class 1 contributions for the last 2-3 years.  I do not think she has this as she stopped working in 16/17 and claimed contribution based JSA in 17/18.  But she can still get NI credits just by "signing on" and showing she is looking for work?  Can she get NI credits without being eligible for any JSA?

Also how and who decides whether she is self-employed or not?

xylophone

https://forums.moneysavingexpert.com/discussion/5955675/no-longer-able-to-claim-jsa-and-receive-ni-credits

macman

She's not unemployed, she is a landlord and so self-employed. You say she has 'significant savings and investments', so she must be completing a self-assessment tax return, in which NI contributions will be involved. So i'm rather bemused by your post. The BTL property is not her only source of income.

nick74

macman said:

She's not unemployed, she is a landlord and so self-employed. You say she has 'significant savings and investments', so she must be completing a self-assessment tax return, in which NI contributions will be involved. So i'm rather bemused by your post. The BTL property is not her only source of income.

Receiving rental income or investment income doesn't make you 'self-employed' as far as HMRC are concerned, and neither are subject to National Insurance contributions.

whizzywoo

There is are no NI contributions due on the rental income. It is not self employment.

itwasntme001

Funnily enough my partner called HMRC and asked to get herself registered for 19/20 self assessment due to the btl.  The HMRC employee said that she is also eligible to pay class 2 NI and that a letter will be sent separate to the SA for her to be able to pay.  She clarified whether she really could given owning and letting a single property does not classify her as self-employed but HMRC said that it was not true and that she is self-employed.