Paying Class 2 voluntary NICs whilst living in Canada

jem16

My son moved to Canada in 2012 and has been working there ever since. He has no plans to return to the UK. Currently he has 9 years of NICs. I know with the bilateral arrangement with Canada he can use his Canadian equivalent of NI so he meets the eligibility here for the minimum of 10 years.

However it appears that he can also choose to pay voluntary Class NICs and keep up his UK entitlement. At around £160pa it seems a no-brainer to do so. He's just filled in the form to apply for this going forward.

He also has gaps from 2013 till now which he could fill too but would he also be able to play Class 2 for those years?

bostonerimus

Definitely pay Class 2 NI as it is the best deal around. Your son should get a pension forecast from HMRC then work out if it's worth filling in the gaps...I think they can be 6 years in arrears and would be Class 3 NI, so cost £824/year, but check with HMRC. However, if your son can work long enough in Canada to get up to 35 years of contributions, including his current 9, then under the current rules he would get full pension and filling the gaps would not be necessary.

jem16

Thanks. He's checked his forecast but with only 9 years it doesn't show anything other than he can get £185.15 if he still contributes. He needs to get that 10th year before anything meaningful will show.

He's almost 36 so should have time to reach 35 if he just contributes going forward - or at least until they take the option away I suppose. Currently he can go back to April 2006 as they're allowing that till April 5th 2023 but sounds like arrears are only Class 3 which is a pity. He's happy to pay Class 2 but I doubt he'd go for Class 3.

bostonerimus

jem16 said:

Thanks. He's checked his forecast but with only 9 years it doesn't show anything other than he can get £185.15 if he still contributes. He needs to get that 10th year before anything meaningful will show.

He's almost 36 so should have time to reach 35 if he just contributes going forward - or at least until they take the option away I suppose. Currently he can go back to April 2006 as they're allowing that till April 5th 2023 but sounds like arrears are only Class 3 which is a pity. He's happy to pay Class 2 but I doubt he'd go for Class 3.

Even Class 3 is an amazing deal. If he thinks he'll work for another 30 years then under the current rules he could pay Class 2 and qualify. Of course the gamble is that the rules don't change. 

Albermarle

 He's happy to pay Class 2 but I doubt he'd go for Class 3.

Although one is more expensive than the other , they are both 'no brainers' 

£824 buys over £5 a week in guaranteed pension linked to inflation. To buy a £5 a week pension linked to uncapped inflation at age 66 , would cost about £8,000 .

jem16

bostonerimus said:

jem16 said:

Thanks. He's checked his forecast but with only 9 years it doesn't show anything other than he can get £185.15 if he still contributes. He needs to get that 10th year before anything meaningful will show.

He's almost 36 so should have time to reach 35 if he just contributes going forward - or at least until they take the option away I suppose. Currently he can go back to April 2006 as they're allowing that till April 5th 2023 but sounds like arrears are only Class 3 which is a pity. He's happy to pay Class 2 but I doubt he'd go for Class 3.

Even Class 3 is an amazing deal. If he thinks he'll work for another 30 years then under the current rules he could pay Class 2 and qualify. Of course the gamble is that the rules don't change. 

Yes I agree that Class 3 is still an amazing deal but when you have 3 young kids and the only earner at the moment it’s a lot of money to find to pay for 9 years from 2013 to 2022. We realise that the rules may change. 

nigelbb

bostonerimus said:

Definitely pay Class 2 NI as it is the best deal around. Your son should get a pension forecast from HMRC then work out if it's worth filling in the gaps...I think they can be 6 years in arrears and would be Class 3 NI, so cost £824/year, but check with HMRC. However, if your son can work long enough in Canada to get up to 35 years of contributions, including his current 9, then under the current rules he would get full pension and filling the gaps would not be necessary.

If he has been employed or self employed in Canada since leaving the UK then he will be able to pay Class 2 contributions for the years 2013 to date. There are some qualifying details to be satisfied eg paying contributions for the three years prior to leaving the UK. Everything is detailed in HMRC leaflet NI38 "Social Security abroad" https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/947544/NI38_12_20.pdf

jem16

nigelbb said:

bostonerimus said:

Definitely pay Class 2 NI as it is the best deal around. Your son should get a pension forecast from HMRC then work out if it's worth filling in the gaps...I think they can be 6 years in arrears and would be Class 3 NI, so cost £824/year, but check with HMRC. However, if your son can work long enough in Canada to get up to 35 years of contributions, including his current 9, then under the current rules he would get full pension and filling the gaps would not be necessary.

If he has been employed or self employed in Canada since leaving the UK then he will be able to pay Class 2 contributions for the years 2013 to date. There are some qualifying details to be satisfied eg paying contributions for the three years prior to leaving the UK. Everything is detailed in HMRC leaflet NI38 "Social Security abroad" https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/947544/NI38_12_20.pdf

Thanks. That’s better news if he can pay Class 2 from 2013 to date. He does fulfil all those eligibility criteria. 

In saying that the form was tricky to complete as far as employment details are concerned. He’s had 3 employers in Canada since moving in 2012 and filled in the form with the current employer details as it asked who his contract was with. That only started in February 2021 though but he needs to show he was working from 2012. 

I’ve got the forms here to post. Should we include an extra sheet with employment details from 2012 to satisfy the arrears payments which he’s asked to know about?

We we’re hoping that my daughter-in-law could also pay Class 2 but she’s currently a stay at home Mum. Looking at the form she needs to be employed or self employed - is that correct? She was employed till 2019 so would qualify for 2013 to 2019 by the looks of it. 

nigelbb

jem16 said:

nigelbb said:

bostonerimus said:

Definitely pay Class 2 NI as it is the best deal around. Your son should get a pension forecast from HMRC then work out if it's worth filling in the gaps...I think they can be 6 years in arrears and would be Class 3 NI, so cost £824/year, but check with HMRC. However, if your son can work long enough in Canada to get up to 35 years of contributions, including his current 9, then under the current rules he would get full pension and filling the gaps would not be necessary.

If he has been employed or self employed in Canada since leaving the UK then he will be able to pay Class 2 contributions for the years 2013 to date. There are some qualifying details to be satisfied eg paying contributions for the three years prior to leaving the UK. Everything is detailed in HMRC leaflet NI38 "Social Security abroad" https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/947544/NI38_12_20.pdf

Thanks. That’s better news if he can pay Class 2 from 2013 to date. He does fulfil all those eligibility criteria. 

In saying that the form was tricky to complete as far as employment details are concerned. He’s had 3 employers in Canada since moving in 2012 and filled in the form with the current employer details as it asked who his contract was with. That only started in February 2021 though but he needs to show he was working from 2012. 

I’ve got the forms here to post. Should we include an extra sheet with employment details from 2012 to satisfy the arrears payments which he’s asked to know about?

We we’re hoping that my daughter-in-law could also pay Class 2 but she’s currently a stay at home Mum. Looking at the form she needs to be employed or self employed - is that correct? She was employed till 2019 so would qualify for 2013 to 2019 by the looks of it. 

A few years ago when I purchased Class 2 National Insurance voluntary contributions in arrears I only had one employer abroad. Provided there are no long gaps in his Canadian employment record I don't see that it will do any harm to list his employment from 2012.

You do need to have been employed or self employed to qualify for purchasing Class 2 NI voluntary contributions but in my case at least a few years ago HMRC didn't ask for any proof of employment abroad.

jem16

nigelbb said:

jem16 said:

nigelbb said:

bostonerimus said:

Definitely pay Class 2 NI as it is the best deal around. Your son should get a pension forecast from HMRC then work out if it's worth filling in the gaps...I think they can be 6 years in arrears and would be Class 3 NI, so cost £824/year, but check with HMRC. However, if your son can work long enough in Canada to get up to 35 years of contributions, including his current 9, then under the current rules he would get full pension and filling the gaps would not be necessary.

If he has been employed or self employed in Canada since leaving the UK then he will be able to pay Class 2 contributions for the years 2013 to date. There are some qualifying details to be satisfied eg paying contributions for the three years prior to leaving the UK. Everything is detailed in HMRC leaflet NI38 "Social Security abroad" https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/947544/NI38_12_20.pdf

Thanks. That’s better news if he can pay Class 2 from 2013 to date. He does fulfil all those eligibility criteria. 

In saying that the form was tricky to complete as far as employment details are concerned. He’s had 3 employers in Canada since moving in 2012 and filled in the form with the current employer details as it asked who his contract was with. That only started in February 2021 though but he needs to show he was working from 2012. 

I’ve got the forms here to post. Should we include an extra sheet with employment details from 2012 to satisfy the arrears payments which he’s asked to know about?

We we’re hoping that my daughter-in-law could also pay Class 2 but she’s currently a stay at home Mum. Looking at the form she needs to be employed or self employed - is that correct? She was employed till 2019 so would qualify for 2013 to 2019 by the looks of it. 

A few years ago when I purchased Class 2 National Insurance voluntary contributions in arrears I only had one employer abroad. Provided there are no long gaps in his Canadian employment record I don't see that it will do any harm to list his employment from 2012.

You do need to have been employed or self employed to qualify for purchasing Class 2 NI voluntary contributions but in my case at least a few years ago HMRC didn't ask for any proof of employment abroad.

Only one gap of around 4 weeks as made redundant during Covid and had to find a new job. I'm not sure if that would create an issue or not for that year.

molerat

There was a post here quite a while back where someone had an in and out of work history but had good records.  HMRC worked out a mixed class 2 / class 3 payment with a mixture of both across a single year.