Won't earn enough to pay NI, can I pay it myself?

sazziecee

Hi!

Am currently working in a shop but I am not happy there.

My dad has just retired and has set up his own business with an ex-colleague of his and needs someone to help out, general admin mainly. He has told me he will match my wage and hours, with the possibilty of this going up if the businesses do well.

It will be 16hr a week at £5.90 so I don't think this will be enough to pay NI contributions (I don't pay them at the moment unless I have done overtime).

But ideally I would like to pay some to enable me to apply for benefits etc if I should ever need them in the future, as I have heard that some people have been refused as they haven't made enough in contributions.

I have heard of a small earnings certificate, is this what I need? Or is this just for self employed people/

I will be working "on the books" so will have let the tax office know of my change of job but that will only affect my tax and not my NI, I assume?

Thanks

maccarabbit

no you can pay voluntery ni contributions i think it may be class 3 which is for people who think they may not pay enough to get state pension etc
if you go on www.hmrc.gov.uk/nic it will give you details from there. other half has recently become self employed and he ha to pay own ni which we pay quarterly.

sazziecee

Thanks.

I claim working tax credit, the site says I may get automatic credits because of this but doesn't say for sure.

I haven't recieved any letters about a potential shortfall of contributions though in any other year of being part-time so perhaps they are being paid for me?

janienewcastle

Contact Pensions Forcast first.... you might not need to pay vol conts

Savvy_Sue

Voluntary contributions might help towards your pension, but I'm not sure they help towards claiming many other benefits, so do look into that carefully first ...

chrisbur

sazziecee wrote: »

Hi!

Am currently working in a shop but I am not happy there.

My dad has just retired and has set up his own business with an ex-colleague of his and needs someone to help out, general admin mainly. He has told me he will match my wage and hours, with the possibilty of this going up if the businesses do well.

It will be 16hr a week at £5.90 so I don't think this will be enough to pay NI contributions (I don't pay them at the moment unless I have done overtime).

But ideally I would like to pay some to enable me to apply for benefits etc if I should ever need them in the future, as I have heard that some people have been refused as they haven't made enough in contributions.

I have heard of a small earnings certificate, is this what I need? Or is this just for self employed people/

I will be working "on the books" so will have let the tax office know of my change of job but that will only affect my tax and not my NI, I assume?

Thanks

The important figure for qualifying for benefits and pension is the lower earnings limit LEL which is £87 for this year and the last I heard was going to be £90 for next year. Providing you earn at least this each week (or the monthly equivalent if you are paid monthly) then you are treated as paying NI even if you do not actually pay it. On the figures that you have quoted you are earning over the LEL but below the earnings threshold ET when actual payments are collected.

chrisbur

janienewcastle wrote: »

Contact Pensions Forcast first.... you might not need to pay vol conts

Unforetunately the pension forcast site is only providing a very limited service at the moment;

From http://www.thepensionservice.gov.uk/atoz/atozdetailed/rpforecast.asp
We are currently unable to provide our usual pension forecasting service to some of our customers in Great Britain and Northern Ireland. This is because we are changing our computer systems to reflect the changes to State Pension rules introduced by the Pensions Act 2007 and the Pensions Act (Northern Ireland) 2008. We aim to provide the full service again by Autumn 2008.
You can still get a pension forecast if you will reach State Pension age before 6 April 2010, but not if you will reach State Pension age on or after that date.

jinny

The National Insurance inquiry helpline 08453021479
Self employed helpline 08459154645
Pension forcast team 08453000168

toli

Hi,

I do not earn enough to pay NI contributions (I only work 7 or 8 hrs per week) and have spoken in depth to tax office, job centre and NI conts directly @ HMRC. As such I would like to confirm the following to help anyone in a similar situation:

• It is possible to go to the job centre fortnightly and sign on for a 'top up' amount to your wages if you earn less than £67.50 (for aged 26 and over). They will take the £67.50 and deduct £5 for 'allowed earnings' per week. They will then pay you a top up amount equalling the difference between the £67.50 per week (payable from them) and the amount you have actually earned. For example if you earn £50 per week and Job seekers would normally pay £67.50 per week. £50 less £5 (allowed earnings) = £45. £67.50 less the £45 = £22.50. As such, you could sign on to claim £22.50 weekly! Obviously if your wages change on a weekly basis then so would the amount due to you!! (If you wish to sign on you will either be entitled to 'income based JSA' for those who have a low household income or alternatively 'contribution based JSA' for those who have a working partner.
• Income based JSA can be claimed for as long as your income falls below the govenment threshold, however Contribution based income can only be claimed for a maximum of 6 months.

If you do not earn enough to pay NI conts you can pay class 1 contributions at a current rate of £12.05 per week .... BUT this ONLY counts toward accrued NI years in relation to your state pension. If you are later made redundant, need to claim maternity or need to claim other benefits, the £12.05 conts paid are not counted for this purpose.

If you have children under the age of 12, your pension credits are protected under 'family protection'. If you have many children, the maximum accured years of 'family protection' is 22 years. However, as noted above, this only counts towards your pension credits and not towards any NI conts that would be required for future benefits claims. (ie. if your household income is higher than the threshold required and you were made redundant, you may not then be able to claim JSA - as your income could be too high for 'income based JSA' and you would not have contributed NI for the purpose of 'contribution based JSA. However, if you sign on you are then considered as making your full contribution!! (but beware that in order to claim JSA you MUST still show that you are looking for additional work!! )

The previous post noted that the current legislation states only 30 full years NI conts are required to claim full state pension - this is still currently correct, but could change at a future date as it is not a high number of years based on the age people now tend to live to.

I hope this will provide additional info to those people who work only a small number of hours. I have went all round the houses to find this out as I have been fobbed off 3 times per week for the last 4 weeks at the Job Centre! :mad:

DCFC79

toli wrote: »

Hi,

I do not earn enough to pay NI contributions (I only work 7 or 8 hrs per week) and have spoken in depth to tax office, job centre and NI conts directly @ HMRC. As such I would like to confirm the following to help anyone in a similar situation:

• It is possible to go to the job centre fortnightly and sign on for a 'top up' amount to your wages if you earn less than £67.50 (for aged 26 and over). They will take the £67.50 and deduct £5 for 'allowed earnings' per week. They will then pay you a top up amount equalling the difference between the £67.50 per week (payable from them) and the amount you have actually earned. For example if you earn £50 per week and Job seekers would normally pay £67.50 per week. £50 less £5 (allowed earnings) = £45. £67.50 less the £45 = £22.50. As such, you could sign on to claim £22.50 weekly! Obviously if your wages change on a weekly basis then so would the amount due to you!! (If you wish to sign on you will either be entitled to 'income based JSA' for those who have a low household income or alternatively 'contribution based JSA' for those who have a working partner.
• Income based JSA can be claimed for as long as your income falls below the govenment threshold, however Contribution based income can only be claimed for a maximum of 6 months.

If you do not earn enough to pay NI conts you can pay class 1 contributions at a current rate of £12.05 per week .... BUT this ONLY counts toward accrued NI years in relation to your state pension. If you are later made redundant, need to claim maternity or need to claim other benefits, the £12.05 conts paid are not counted for this purpose.

If you have children under the age of 12, your pension credits are protected under 'family protection'. If you have many children, the maximum accured years of 'family protection' is 22 years. However, as noted above, this only counts towards your pension credits and not towards any NI conts that would be required for future benefits claims. (ie. if your household income is higher than the threshold required and you were made redundant, you may not then be able to claim JSA - as your income could be too high for 'income based JSA' and you would not have contributed NI for the purpose of 'contribution based JSA. However, if you sign on you are then considered as making your full contribution!! (but beware that in order to claim JSA you MUST still show that you are looking for additional work!! )

The previous post noted that the current legislation states only 30 full years NI conts are required to claim full state pension - this is still currently correct, but could change at a future date as it is not a high number of years based on the age people now tend to live to.

I hope this will provide additional info to those people who work only a small number of hours. I have went all round the houses to find this out as I have been fobbed off 3 times per week for the last 4 weeks at the Job Centre! :mad:

thread is a bit old dont you think