ESA without NI contributions

Liz93

Hi! I recently applied for ESA, knowing I wouldn't get any money, but hoping I could get NI credits for my future pension. I thought if I got credits, I would eventually qualify to get monetary help as well. However, when I spoke to someone on the phone, he said that because I hadn't made any contribution through employment or self employment, I wouldn't be eligible for monetary help through ESA ever.
Is this right? It seems so 'mean', because I haven't been able to work BECAUSE of my health condition. I said I could use savings to make voluntary contributions for the past 2 years, but he told me that wouldn't count either. 
Could someone tell me whether this is right or whether maybe he misunderstood what I was saying?
Thanks so much!

poppy123456

You were advised correctly. If you haven't worked in the previous 2 tax years (April 2019 to March 2021) then you won't be able to receive any money. Even if you claim ESA and receive class 1 NI credits.

If you were self employed in the previous 2 tax years then you can pay class 2 but if you weren't self employed then paying NI contributions won't help here. You can pay class 3 but these are towards your state pension only.

You can see the criteria and what's needed here. https://www.entitledto.co.uk/help/employment-and-support-allowance-contribution-based

Have you checked entitlement to Universal Credit? If you live with a partner you claim as a couple and your joint circumcumstances will be taken into consideration. Use a benefits calculator to check entitlement. https://www.entitledto.co.uk/benefits-calculator/Intro/Home?cid=65dbc38e-a03a-42c5-a27d-d2517e8a1c92

Liz93

Thank you for commenting so quickly! I am registered self employed, and did some work, but not enough to have to pay NI contributions. But voluntary contributions won't count either? What if I start paying voluntarily from this tax year?
I'm not eligible for UC, because I'm not employed and not gainfully self employed... funnily enough! I need to meet those requirements to fulfil the Habitual Residency test as I'm an EU citizen with pre-settled status. It sure makes it more fun!

poppy123456

How long have you been self employed for? You need to meet both of these conditions to qualify.

• First contribution condition - in one of the last two complete tax years, you must have paid Class 1 or 2 contributions on relevant earnings at the lower earnings limit for at least 26 weeks. This means you must have worked for at least 26 weeks of the last two complete tax years; and
• Second contribution condition - 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.

calcotti

Liz93 said:

Thank you for commenting so quickly! I am registered self employed, and did some work, but not enough to have to pay NI contributions. But voluntary contributions won't count either? What if I start paying voluntarily from this tax year?
I'm not eligible for UC, because I'm not employed and not gainfully self employed... funnily enough! I need to meet those requirements to fulfil the Habitual Residency test as I'm an EU citizen with pre-settled status. It sure makes it more fun!

If you were self employed in the relevant tax years (2019-20 and 2020-21) you can pay voluntary Class 2 contributions. These will count for ESA. Once the payments are made there will be a 6 week wait before you can claim ESA.

Voluntary contributions for people who are not self employed are Class 3 and do not count for ESA (and also cost a lot more).

Liz93

calcotti said:

Liz93 said:

Thank you for commenting so quickly! I am registered self employed, and did some work, but not enough to have to pay NI contributions. But voluntary contributions won't count either? What if I start paying voluntarily from this tax year?
I'm not eligible for UC, because I'm not employed and not gainfully self employed... funnily enough! I need to meet those requirements to fulfil the Habitual Residency test as I'm an EU citizen with pre-settled status. It sure makes it more fun!

If you were self employed in the relevant tax years (2019-20 and 2020-21) you can pay voluntary Class 2 contributions. These will count for ESA. Once the payments are made there will be a 6 week wait before you can claim ESA.

Voluntary contributions for people who are not self employed are Class 3 and do not count for ESA (and also cost a lot more).

Oh I can do Class 2 contributions? That would be amazing! I've been self employed since mid 2019. Did tax returns every year (despite never reaching the lower threshold of earnings). I feel awful not having some semblance of financial independence, and my savings will run out at some point. But if I can make the voluntary contribution, I'd be in a much better position. Do I have to contact HMRC for this?

calcotti

I would suggest ringing HMRC is sensible. Make clear which years you wish to pay for 20i9-20 and 2020-21. The cost for each year is a bit over £150.

Liz93

So after taking a couple days to let things simmer (why are applications like this so tiresome?!), I realised that I didn't work the whole tax year 2019-2020. I registered as self employed on 18 June 2019. So if I were to pay Class 2 NI for that tax year, it wouldn't be the full year? And that would mean I still wouldn't qualify?

calcotti

Liz93 said:..I realised that I didn't work the whole tax year 2019-2020. I registered as self employed on 18 June 2019. So if I were to pay Class 2 NI for that tax year, it wouldn't be the full year? And that would mean I still wouldn't qualify?

Unfortunately that may be correct. However I'm not sure and given that tax and NI for self employed is all worked out annually perhaps it's possible to pay the whole year. I think you're going to have to ring HMRC to find out (and hope you get someone who knows what they are talking about). Try ringing at 8 o'clock in the morning when waiting times are usually shorter.