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ESA NI Contributions requirements clarifications
JohnSmith123
Member Posts: 3 Listener
Hello lovely people, I'm tearing my hair out over this and the DWP/HMRC are no help:
I am self employed and earning lower than required for mandatory NI contributions so I opted out.
In order to get ESA (Contributions based) I need to have paid my NI contributions.
1) What is the need for the first requirement of 26 weeks in the previous year when the second requirement seems to say you need 50 weeks in the last 2 years?
(Quote: in one of the last two complete tax years, you must have paid Class 1 or 2 contributions to the value of 26 times the lower earnings limit; and
in both of the last two complete tax years, you must have paid or been credited with, Class 1 or 2 contributions to the value of 50 times the lower earnings limit.)
2) Let's say I need to pay 50 weeks £113 and 50 weeks £116 (the last 2 tax years) worth of NI, is it really the case that I would need to send £5650 + £5800?!
I am self employed and earning lower than required for mandatory NI contributions so I opted out.
In order to get ESA (Contributions based) I need to have paid my NI contributions.
1) What is the need for the first requirement of 26 weeks in the previous year when the second requirement seems to say you need 50 weeks in the last 2 years?
(Quote: in one of the last two complete tax years, you must have paid Class 1 or 2 contributions to the value of 26 times the lower earnings limit; and
in both of the last two complete tax years, you must have paid or been credited with, Class 1 or 2 contributions to the value of 50 times the lower earnings limit.)
2) Let's say I need to pay 50 weeks £113 and 50 weeks £116 (the last 2 tax years) worth of NI, is it really the case that I would need to send £5650 + £5800?!
Replies
Thank you for sharing this with us. Some of our members may be able to answer your questions soon. You may also want to get in touch with your local CAB for advice.
I have asked the @BenefitsTrainingCo to take a look to see if they can help.
Senior online community officer
I guess the result of being on income based vs contributions based is ultimately the same... Uhh, this whole area is so murky for me to the point I can't figure out what to do and now they throw Universal Credit into the mix...
Senior online community officer
To qualify for Contributory ESA (or new style ESA as it is now called) requires you to have paid at least 26 weeks of Class 1 or 2 contributions on earnings at the lower earnings limits in one of the last two complete tax years. There are some circumstances when contributions paid in any tax year are sufficient, e.g. if you had recently received careers allowance.
in addition you must have paid or been credited with Class 1 or 2 contributions on earnings of 50 times the lower earnings limit in each of the last two complete tax years.
Your sums are broadly correct if you have made no contributions whatsoever in the last two tax years.
Two suggestions - making a claim is the only way to be sure if you meet the criteria. Secondly it may be better to have a full benefits check to see if there is anything else you may be entitled to. Citizens advice is a good place to start but there are also online calculators you could use at either entitledto.co.uk or turn2us.org.uk
Good luck!
Michael