National Insurance............or not

jennifernil

My husband retired age 65 in August 2007 and is now in receipt of his state and company pensions. His former employers are paying a 3% bonus on basic salary for 2007, and pensioners are entitled to an amount equivalent to the number of days in 2007 they were still employed.

The bonus will be paid 17th March 2008 to all current employees and those who retired during 2007.. My husband has received a "pay-slip" saying how much he will receive.

Tax has been deducted, also National Insurance. Is it correct that they should deduct NI? When he retired he got an "exemption certificate" for NI to give to anyone he worked for. This he sent to his former employer as they had offered him some casual work, but this never actually materialised. They must still have the certificate.

We thought that on any pay received after retirement at age 65, no NI was due. Can anyone advise?

LittleVoice

I don't think they should be deducting NI because it was not due to be paid before he was 65 - and clearly is being paid much later. It doesn't matter that it is in the same tax year as when he was only 64, it is the actual time of payment which is important.

(There is though a difference in relation to self-employment where NI contributions are paid for the whole of the tax year in which you reach state pension age.)

jennifernil

Thank you, that is what I thought too. He was employed, but now not working. I think it is just a question of the right hand not talking to the left.

Will he be able to get the money deducted back again?

CIS

NI ceases to be due for any wages from the 6th April prior to the 65th birthday.

Pennywise

jennifernil wrote: »

I think it is just a question of the right hand not talking to the left.

Looks like they have the wrong dob in their payroll system as any decent payroll software would know not to deduct NIC from someone over state retirement age.

LittleVoice

CIS wrote: »

NI ceases to be due for any wages from the 6th April prior to the 65th birthday.

Sorry - that's wrong.

If a man is 65 on, say, 31 March 2009, it does not mean that no employee NI is paid from 6 April 2008.

It is deducted from pay until the first pay period after the significant birthday.

jennifernil

e-mail now sent to wages department, we shall see what they have to say for themselves!