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Chapter NIM01150

Document Cited authorities 3 Cited in Related
Vincent
Published date11 April 2016
Record NumberNIM01150
CourtHM Revenue & Customs

The removal of the Upper Earnings Limit for the purposes of calculating the amount of primary Class 1 NICs due has no effect on a contributor’s entitlement to claim contributory benefits, with the exception of the Additional state pension.

As part of the changes to the structure of Class 1 NICs, the National Insurance Contributions Act 2002 ensured that entitlement to contributory benefit continues to be calculated on earnings but only on those earnings:

  • that attract a Class 1 NICs liability at the main primary percentage. That is, on earnings between the Primary Threshold and the Upper Earnings Limit or
  • on which Class 1 NICs are treated as paid. That is on earnings at or above the Lower Earnings Limit but at or below the Primary Threshold.

Earnings above the Upper Earnings Limit, on which the additional primary percentage is paid, do not give rise to contributory benefit entitlement.

The main amendments conferring benefit entitlement were made to Schedule 3 of SSCBA 1992, which deals with contribution conditions for entitlement to benefit...

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