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Chapter NIM01240

Document Cited authorities 5 Cited in Related
Vincent
Published date11 April 2016
Record NumberNIM01240
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

The removal of the Upper Earnings Limit (UEL) 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.

As part of the changes to the structure of Class 1 NICs, the National Insurance Contributions Act 2002 and subsequently the Pensions Act 2007 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 Accrual Point 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.

From 6 April 2009, earnings above the Upper Accrual Point, do not give rise to contributory benefit entitlement.

The main amendments confining benefit entitlement were made to Schedule 3 of SSCBA 1992, which deals with contribution conditions for entitlement to benefit. Most confined the earnings on which benefit is based to those earnings as do not exceed the Upper Earnings Limit or on which the main primary percentage is paid.

However, following...

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