Help!! I'm self-employed, but don't pay NI. Am I entitled to ESA? How much could I get?

ClareB74 · January 2021

Hello.

I have been self employed for the past few years, not earning enough to pay NI etc. It was from home and mainly keeping my brain busy a little.

Anyways, I receive enhanced PIP on both indefinitely, but as my health has become worse, I just can’t carry on with this business.

I’ve been told about ESA. Would I be entitled to this? My hubby works from home 3 days a week to cover bills etc and a little over for emergencies etc.

How much would I be entitled too? I’m in a powerchair, tube fed, very ill, constant pain.....you get the drift.

We currently get a little disabled working tax credit, so I assume this will finish if I close my business down?........somebody told me I could get ESA, then have my name on hubby’s business like a named partner, then we might still get some working credit, but didn’t sound right to me.

Any and all advice appreciated. I think I might have to pay for NI stamps even though I’ve not earnt enough?

it’s all so confusing!!

Thanks for listening. X

janer1967 · January 2021

Hi and welcome

You may be eligible for new style ESA but that all depends on your earnings in previous tax years and with what you say I doubt you would have earned enough

You could apply for UC but yes tax credits will end as it us all under the new UC now

You would have to claim as a couple and your husband earnings will be taken into account but this doesn't mean you wont get anything

Also if applying for UC declare your medical condition and provide sick note this will prompt a work capability assessment

I would use s benefit calculator so you can see what you may be entitled to based on your circumstances

There I'd one on here in benefits section

Hope this helps any further questions just ask

woodbine · January 2021

https://benefits-calculator.turn2us.org.uk/AboutYou

wilko · January 2021

Hello not wanting to put a downer on it but it may be down to what NI payments have been made in yours or your husbands case should you claim as a couple, seek some benefits advice, as you or your husband are or may not be paying NI contributions your future pensions will be affected.

Adrian_Scope · January 2021

Hello @ClareB74. If you haven't paid any NI contributions it's unlikely you'll be entitled to New Style ESA because it's contribution-based. You can see the eligibility criteria here and it would be worth you checking your National Insurance record.

If New Style ESA isn't an option for you, Universal Credit may be. However it would be a joint claim with your partner so it would depend on things such as your household income and any savings/capital. Have a look at the benefits calculator Woodbine shared and let us know how you get on.

cupcake88 · January 2021

Hi there I couldn’t get ESA because I hadn’t paid enough National insurance in the last couple of years and I couldn’t apply for the other ESA because of my partners income . You could apply for the other esa income related but it will go on your partners income also .

ClareB74 · February 2021

Thank you for all your advice and help. It truly means a lot. ?

Am I able to pay the NI contributions for the time period needed?

I’ve just put in last years income etc on HMRC website, and because I’m a very low profit business, it did say I could volunteer and pay the SE NI contributions.......would that help?

I’m counted as terminal, but just don’t have the energy to continue much longer with my online business.

I know of someone in a similar situation as ours, the sick person paid the 2years contributions NI, then they were able to claim ESA at the high rate, so they didn’t need to attend groups etc, but this was a while ago, so just wondering if this could be possible?......plus they were able to be put down in their partners company that they helped a little so got some kind of premium or tax credits.......I just find it all so confusing!! Xx

woodbine · February 2021

It's always a good idea to pay class 1 N.I as it gets you a decent SRP, however yours seems to be getting a complicated problem which might be better served with a phone call to your local welfare rights.

chiarieds · February 2021

Hi @ClareB74 - you can pay voluntary Class 3 NI contributions up to 6 years later having been self employed & this will also count towards a State Retirement Pension. I did this as I only had 34 years of NI contributions, & working it out it seemed beneficial. From what you've mentioned this doesn't perhaps seem appropriate however.

Whether this would help with claiming the New Style ESA, if you paid such contributions, I'm sorry I just don't know. Altho @Adrian_Scope has previously replied, I'll ask him for his advice again, bearing in mind your latest query & situation.

chiarieds · February 2021

Just to add, my husband & I were business partners. When I could no longer work, our accountant said, as I still did all the book keeping, answered phone enquiries, etc. I should still be considered a partner as the profits of the business could then be shared resulting in having to pay less tax. This may have been the case with the person you know, but wouldn't be applicable to yourself as far as I know.

calcotti · February 2021

Coming to this late and picking up on some of the previous responses.

Paying Class 3 NI contributions will not help entitlement to contribution based benefits, they only help towards a State Pension. If you do not expect to live that long there is no point in paying them (apologies if that is blunt but you referred to being terminally ill).

income based ESA cannot be claimed, it has been replaced by UC.

A self employed person cannot pay Class 1 contributions, they are paid by employed persons.

To claim new style ESA you need to have complete NI record for the tax years 2018-19 and 2019-20. If you were registered as self employed on these years you can choose to pay voluntary Class 2 contributions for those two years. The cost will be a bit over £300. You would need to ring HMRC to discuss this and arrange payment. Because the payments are late you would normally have to wait 6 weeks before being able to claim benefits but if you explain to them why you are doing this they may adjust the record so that they do not show as late. You could then claim new style ESA. You will need a GP Fit Note (or form DS1500 from your medical team (if your life expectancy is short).

Having said all that any ESA you are awarded is deducted in full from any UC you could claim so you really need to do a benefits check to see if, as a couple, you have UC entitlement which would be worth more than the ESA. If there is then there is no point in claiming ESA.

As an aside, for a self employed person wishing to full gaps in their NI record for State Pension purposes it is better, and cheaper, to pay Voluntary Class 2 contributions rather than Class 3 contributions. Class 2 are currently £3.05/week whereas Class 3 are £15.30/week.

ClareB74 · February 2021

@calcotti Thank you so much for explaining it clearer. It’s just so difficult knowing where to go for advice etc, as the government seem to make everything so complicated or make no sense at all. X

chiarieds · February 2021

Apologies if I caused any confusion, tho as mentioned I was just speaking from personal experience. In 2017 I paid a voluntary Class 3 NI contribution for the tax year 2012-13 so that I would then get the full new State Pension.

jae377 · February 2021

there is a clause that seems little known, it is;
If you earn between £120 and £183 a week, your contributions are treated as having been paid to protect your National Insurance record. Worth checking

calcotti · February 2021

chiarieds said:

Apologies if I caused any confusion, tho as mentioned I was just speaking from personal experience. In 2017 I paid a voluntary Class 3 NI contribution for the tax year 2012-13 so that I would then get the full new State Pension.

Yes that's what Class 3 contributions are for, but unfortunately it is the only thing they are for. They don't help with claiming contributory benefits such as new style JSA or new style ESA.

calcotti · February 2021

jae377 said:

there is a clause that seems little known, it is;
If you earn between £120 and £183 a week, your contributions are treated as having been paid to protect your National Insurance record. Worth checking

Indeed, an important point for employed earners but as Clare says she is self employed it doesn't apply to her.

chiarieds · February 2021

My apology was to the OP. Having read the above advice, & being a fairly quick study, the comment about Class 3 contributions didn't need repeating.

ClareB74 · February 2021

Thank you everyone. You’re all amazing and appreciate you all. X

Help!! I'm self-employed, but don't pay NI. Am I entitled to ESA? How much could I get?

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