UC and NI credits

NedS

Hi all,

My turn to ask for advice. Please does anyone know the criteria for getting NI credits when claiming UC? Are there any conditions to being awarded NI credits (earnings limits, having a non-NIL award etc) or does everyone with a UC claim get an NI credit? Also, UC is monthly and NI credits are awarded weekly, so how does that work? I'd appreciate if anyone can help fill in some of the details.

Thanks

calcotti

Anyone claiming UC gets Class 3 NI credits.
https://www.gov.uk/national-insurance-credits/eligibility
Not clear whether ‘getting’ UC means getting paid UC as distinct from having an open claim on which no payment is due. I think simply being a named claimant is likely to enough.

Interesting to note that this is one way in which UC is better than legacy ESA or IS. On those benefits only one person was the claimant and their partner, although taken into account, would get no NI credits. On UC, because both people in a couple have to claim, both get the credits.

Interesting question re how the monthly nature of UC intersects with the weekly nature of NI - on that I have no idea.

calcotti

Bit more investigation. It seems you get the Class 3 Credit for any week in which you were entitled to UC for any part of that week. I think this must apply to anyone with a live claim because in any given week you wouldn’t necessarily know if there is payment entitlement because it’s only calculated retrospectively.
The Social Security (Credits) Regulations 1975

Credits for persons entitled to universal credit
8G.—(1) For the purposes of entitlement to a benefit to which this regulation applies, a person shall be credited with a Class 3 contribution in respect of a week if that person is entitled to universal credit under Part 1 of the Welfare Reform Act 2012 for any part of that week.
(2) This regulation applies to—
(a) a Category A retirement pension;
(b) a Category B retirement pension;
(c) a widowed parent’s allowance;

calcotti

Note that a week is defined as 

A period of 7 days beginning with midnight between Saturday and Sunday, ...

See the Social Security Act 1975

NedS

calcotti said:

Anyone claiming UC gets Class 3 NI credits.
https://www.gov.uk/national-insurance-credits/eligibility
Not clear whether ‘getting’ UC means getting paid UC as distinct from having an open claim on which no payment is due. I think simply being a named claimant is likely to enough.

Interesting to note that this is one way in which UC is better than legacy ESA or IS. On those benefits only one person was the claimant and their partner, although taken into account, would get no NI credits. On UC, because both people in a couple have to claim, both get the credits.

Thank you. Got a case where NI contributions for 2019/2020 are showing "year not full" on HMRC site even though the claimant had a UC claim throughout the period. I presume the claimant should query with HMRC in the first instance, and expect to be given the runaround between HMRC and DWP.

calcotti

NedS said:

calcotti said:

Anyone claiming UC gets Class 3 NI credits.
https://www.gov.uk/national-insurance-credits/eligibility
Not clear whether ‘getting’ UC means getting paid UC as distinct from having an open claim on which no payment is due. I think simply being a named claimant is likely to enough.

Interesting to note that this is one way in which UC is better than legacy ESA or IS. On those benefits only one person was the claimant and their partner, although taken into account, would get no NI credits. On UC, because both people in a couple have to claim, both get the credits.

Thank you. Got a case where NI contributions for 2019/2020 are showing "year not full" on HMRC site even though the claimant had a UC claim throughout the period. I presume the claimant should query with HMRC in the first instance, and expect to be given the runaround between HMRC and DWP.

If they approach HMRC they will, I think, be referred back to DWP. DWP must be responsible for notifying HMRC that claimants are on benefits and entitled to the credits - I can't see how HMRC will know otherwise.
So my first approach would be to DWP, something along the lines of
I was on UC throughout the tax year but my NI record held by HMRC does not include a full year of contributions/credits for that year. Please check your records and confirm that HMRC have been correctly notified of my entitlement to credits. Please confirm this to me in writing so that i can approach HMRC again if necessary.

What I don't know is how long it takes for credits to be recorded. Is the claimants partial record based on credits or were they earning for part of the year in which case the record may only be showing the earned contributions and might not be showing the credits yet.

I think you'll need to see if you can discover any more about the mechanism for recording credits entitlement.

NedS

Thank you. There were no earnings for the year. The online record just shows "Year not full", no other information is available other than the standard offer to purchase the year at a cost of £780.

Any suggestions how they should contact DWP? If they contacted on the journal, I wouldn't have the first clue how to deal with such a query as it's not something UC agents normally deal with (to the best of my knowledge). I'd advised the claimant to contact HMRC to query the NI record, assuming HMRC could query it with DWP if required. The claimant could post copies of UC statements to HMRC as evidence.

Edit: CAB suggest writing to HMRC to challenge awarding of NI credits if they have not been awarded:

https://www.citizensadvice.org.uk/benefits/benefits-introduction/problems-with-benefits-and-tax-credits/if-a-problem-with-national-insurance-is-affecting-your-benefits/

calcotti

That refers to a decision to refuse credits. This sounds more like an administrative error. Still, in the absence of anything else, worth a try. Will be interested to know how they get on.

huckster

HMRC should have the data re NI credits obtained from benefits. DWP simply records the benefit claim, this opens up a data collection feed to HMRC who note the weeks the benefit is live for, enabling the NI credits to be applied.

If HMRC have not applied any benefit related credits, this appears to indicate a possible mismatch in data e.g. difference between info on DWP system and that held by HMRC. 

If HMRC report back that DWP have not sent data to them, then DWP will need to manually enable the data feed.

calcotti

Huckster, does this mean that as soon as DWP open a claim that is supposed to automatically send information to HMRC? Have I understood that correctly?

NedS

calcotti said:

Huckster, does this mean that as soon as DWP open a claim that is supposed to automatically send information to HMRC? Have I understood that correctly?

Yes, I think so. Sounds very similar to the process for RTI earnings feeds that exist between HMRC and UC, although in the other direction in that case.

In this case it appeared to work in 2018/19 as the claimant received credits in that year, but has not been credited for 2019/20. We will see how HMRC respond.