Voluntary national insurance contributions - Abroad. Class 3 or 2

pinnks

Bostonerimus1 said:

In my case I finished a PhD. in August 1986, went home and signed on and then left for a job in the USA in Jan 1987. I'd lived in the UK all my life prior to that, had 3 years of NI payments from being in college and also some part time work and was receiving the dole immediately before I left the UK and on that basis I was able to pay Class 2 NI.

That's really interesting and perhaps bodes well for OP.

Bostonerimus1

pinnks said:

Bostonerimus1 said:

In my case I finished a PhD. in August 1986, went home and signed on and then left for a job in the USA in Jan 1987. I'd lived in the UK all my life prior to that, had 3 years of NI payments from being in college and also some part time work and was receiving the dole immediately before I left the UK and on that basis I was able to pay Class 2 NI.

That's really interesting and perhaps bodes well for OP.

Yes, but it seems that the rules in NI38 have changed since the 1980s. Anyway it's another twist. 

1957DfurdPensionist

pinnks said:

1957DfurdPensionist said:

pinnks said:

This sounds unusually authoritative and helpful , and I even agree with the second paragraph because Ryanair/EasyJet et al make it very easy to return and leave again multiple times a year to EU at least!  I am not sure about the dismissal of my suggested "EU angle" on equal rights (ok I accept we are talking about an example or two of expatriates in the US but we and HMRC were subject to EU standards of equal rights for rather a long time and as you say, the law probably hasn't changed too much - yet!).

It is certainly rather draconian to further discriminate against an expatriate who is unemployed abroad cf. one who is working abroad.  It looks like strivers v. skivers guidance!

Another perhaps surprising truth is that some (or most?  Anyone know?) enlightened EU countries base their social pension entitlements on the number of years you have lived there and that's it - no jiggery-pokery with tax or NI contribution or contracted out records.

I fear you are mistaken on a number of grounds.  For instance, where you live in terms of the qualifying for the UK pension is irrelevant and coming and going frequently would be your enemy, not your friend, as NI is based on "ordinary residence" not residence per se.  If you want to read the rules on Class 2/3 abroad, they are in Regulation 147 Social Security (Contributions) Regulations 2001 and are quite clear.

I truly am sorry if I am mistaken on a number of grounds - I would appreciate being advised of all my mistakes as I do not wish to mislead anyone on a very important subject for us late babyboomers especially.  You've already disagreed with my EU angle on UK Class2 qualification for those expatriates who work irrespective of whether they are self-employed or salaried with taxes deducted by employers.  My take on it may be a mistake but for sure it avoids one discrimination, unlike the Class1 / Class2 discrimination against salaried workers that UK continues with at home I think? Why is there no difference in Class2 qualification for working expatriates?  Why do the salried expatriates not have to pay Class1?  But why do unemployed expatriates ever have to pay Class3? Where's the logic in these two UK anomalies?

pinnks also said:

There is no discrimination against anyone but I doubt you'll let that thought drop.  Again, read the regulations.

OK I have read the regulations.  I can see that expatriates do have to pay Class3 if they wish to fill in gaps of unemployment abroad, but question remains ... why cannot they pay Class2 like those lucky enough to be working abroad?  Who best amongst them can afford the higher contribution?  Or perhaps those least able to pay do not deserve the lower option??  See my point?

Furthermore, pinnks said:

Finally, I am not sure which "enlightened EU countries" you are referring to but those I have looked at all have contributory state pension systems, most of them leading to an earnings-related pension rather than the flat-rate model used by the UK.  Take your pick as to which one you think is better.  And most of said countries also continue to charge you for health and long-term social care after pension age, which we do not.

Do take a look at Scandinavia for example. I am sure you will find one or two of those countries are as enlightened as I suggested, and do also have excellent free at the point of use health care for all who have the equivalent of a NINo, including pensionists of course, which interestingly includes subsidies for dental care for less than well off pensionists, plus excellent subsidised nursing home options close to every neighbourhood

 

pinnks

Bostonerimus1 said:

pinnks said:

Bostonerimus1 said:

In my case I finished a PhD. in August 1986, went home and signed on and then left for a job in the USA in Jan 1987. I'd lived in the UK all my life prior to that, had 3 years of NI payments from being in college and also some part time work and was receiving the dole immediately before I left the UK and on that basis I was able to pay Class 2 NI.

That's really interesting and perhaps bodes well for OP.

Yes, but it seems that the rules in NI38 have changed since the 1980s. Anyway it's another twist. 

As I said, the law has not changed but the degree of HMRC discretion, or operational policy, may have as there was a clamp down on extra-statutory concessions 20-odd years ago.  I am sure OP will feed back when the HMRC response is received...

QrizB

1957DfurdPensionist said:

pinnks also said:

There is no discrimination against anyone but I doubt you'll let that thought drop.  Again, read the regulations.

OK I have read the regulations.  I can see that expatriates do have to pay Class3 if they wish to fill in gaps of unemployment abroad, but question remains ... why cannot they pay Class2 like those lucky enough to be working abroad?  

I'm not sure there's any good reason for employed folk overseas to pay Class 2s when identically-employed folk in Blighty have to pay Class 3s, but that's where we are.

pinnks

1957DfurdPensionist said:

pinnks said:

1957DfurdPensionist said:

pinnks said:

This sounds unusually authoritative and helpful , and I even agree with the second paragraph because Ryanair/EasyJet et al make it very easy to return and leave again multiple times a year to EU at least!  I am not sure about the dismissal of my suggested "EU angle" on equal rights (ok I accept we are talking about an example or two of expatriates in the US but we and HMRC were subject to EU standards of equal rights for rather a long time and as you say, the law probably hasn't changed too much - yet!).

It is certainly rather draconian to further discriminate against an expatriate who is unemployed abroad cf. one who is working abroad.  It looks like strivers v. skivers guidance!

Another perhaps surprising truth is that some (or most?  Anyone know?) enlightened EU countries base their social pension entitlements on the number of years you have lived there and that's it - no jiggery-pokery with tax or NI contribution or contracted out records.

I fear you are mistaken on a number of grounds.  For instance, where you live in terms of the qualifying for the UK pension is irrelevant and coming and going frequently would be your enemy, not your friend, as NI is based on "ordinary residence" not residence per se.  If you want to read the rules on Class 2/3 abroad, they are in Regulation 147 Social Security (Contributions) Regulations 2001 and are quite clear.

I truly am sorry if I am mistaken on a number of grounds - I would appreciate being advised of all my mistakes as I do not wish to mislead anyone on a very important subject for us late babyboomers especially.  You've already disagreed with my EU angle on UK Class2 qualification for those expatriates who work irrespective of whether they are self-employed or salaried with taxes deducted by employers.  My take on it may be a mistake but for sure it avoids one discrimination, unlike the Class1 / Class2 discrimination against salaried workers that UK continues with at home I think? Why is there no difference in Class2 qualification for working expatriates?  Why do the salried expatriates not have to pay Class1?  But why do unemployed expatriates ever have to pay Class3? Where's the logic in these two UK anomalies?

pinnks also said:

There is no discrimination against anyone but I doubt you'll let that thought drop.  Again, read the regulations.

OK I have read the regulations.  I can see that expatriates do have to pay Class3 if they wish to fill in gaps of unemployment abroad, but question remains ... why cannot they pay Class2 like those lucky enough to be working abroad?  Who best amongst them can afford the higher contribution?  Or perhaps those least able to pay do not deserve the lower option??  See my point?

Furthermore, pinnks said:

Finally, I am not sure which "enlightened EU countries" you are referring to but those I have looked at all have contributory state pension systems, most of them leading to an earnings-related pension rather than the flat-rate model used by the UK.  Take your pick as to which one you think is better.  And most of said countries also continue to charge you for health and long-term social care after pension age, which we do not.

Do take a look at Scandinavia for example. I am sure you will find one or two of those countries are as enlightened as I suggested, and do also have excellent free at the point of use health care for all who have the equivalent of a NINo, including pensionists of course, which interestingly includes subsidies for dental care for less than well off pensionists, plus excellent subsidised nursing home options close to every neighbourhood

 

I think the best thing you can do is research the whole policy behind NI, its Classes, who pays what and what that entitles them to.  I have set out snippets of that and the law and don't have time, nor the energy to indulge you in what you can learn from the law and HMRC guidance material.  

1957DfurdPensionist

Fair enough - I wouldn't want to steal your time.  Thanks for your snippets.  Hopefully you have found snippets of my actual experience of some interest also. With this type of law, nothing is set completely in stone, is it?  For example, the word "backlog" does not appear in legislation or HMRC guidance, so we must not be surprised if DWP and HMRC have to react and modify their stance sometimes to keep their show on the road.  You may have noted in another thread that yesterday was a red letter day for me in that finally I got some options and actual numbers to consider from an assigned caseworker.  She was an extremely adept mathematician and that enabled her to give an almost immediate truly excellent service in response to my "What If"s