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28 September 2000
The Inland Revenue is launching a helpline to provide advice to married women who may be able to benefit from a change in National Insurance contributions.
The Inland Revenue is launching a helpline to provide advice to married women who may be able to benefit from a change in National Insurance contributions.
In previous years, employees started paying National Insurance contributions once their earnings reached the lower earnings limit. In April 2000, a new level was introduced from which employees start to pay contributions. This is called the primary threshold and is set at a higher amount than the lower earnings limit. For the tax year 6 April 2000 — 5 April 2001 the lower earnings limit is £67 and the primary threshold is £76 per week. As a result of these changes, employees earning between the lower earnings limit and the primary threshold no longer have to pay contributions but are treated as if they have paid them. If they have not elected to pay reduced rate contributions, they continue to build up entitlement to contributory benefits such as retirement pension, incapacity benefit and jobseeker's allowance (contributory).
Married women holding the election to pay reduced rate contributions should therefore consider the following:
??If they earn between the lower earnings limit and the primary threshold and cancel their election to pay reduced rate National Insurance contributions they will not pay any contributions, but will start to build up entitlement to contributory benefits.
??If they earn above the primary threshold, or their earnings rise above the primary threshold, they will pay more in contributions than they do now.
??A decision to cancel the election is irrevocable.
??To help them make an informed decision, they may want to obtain a pension forecast. This can be arranged by calling the helpline, 0845 9155 996.
(Source: Inland Revenue press release dated 29 September 2000.)
In previous years, employees started paying National Insurance contributions once their earnings reached the lower earnings limit. In April 2000, a new level was introduced from which employees start to pay contributions. This is called the primary threshold and is set at a higher amount than the lower earnings limit. For the tax year 6 April 2000 — 5 April 2001 the lower earnings limit is £67 and the primary threshold is £76 per week. As a result of these changes, employees earning between the lower earnings limit and the primary threshold no longer have to pay contributions but are treated as if they have paid them. If they have not elected to pay reduced rate contributions, they continue to build up entitlement to contributory benefits such as retirement pension, incapacity benefit and jobseeker's allowance (contributory).
Married women holding the election to pay reduced rate contributions should therefore consider the following:
??If they earn between the lower earnings limit and the primary threshold and cancel their election to pay reduced rate National Insurance contributions they will not pay any contributions, but will start to build up entitlement to contributory benefits.
??If they earn above the primary threshold, or their earnings rise above the primary threshold, they will pay more in contributions than they do now.
??A decision to cancel the election is irrevocable.
??To help them make an informed decision, they may want to obtain a pension forecast. This can be arranged by calling the helpline, 0845 9155 996.
(Source: Inland Revenue press release dated 29 September 2000.)
