HMRC internal manual

National Insurance Manual

NIM02630 - Class 1 NICs: Earnings of employees and office holders: Payments made on termination of employment: Clergy who resign from the Church of England over the ordination of women priests - a special case

When the Church of England voted to allow the ordination of women priests it was thought a number of individuals would resign from the Church on the grounds of conscience.

The Church, therefore, instructed the Church Commissioners for England to draw up a system of benefits to help clergy who felt they had no option but to resign.

Details of the scheme

The scheme was introduced in early 1994 under the Ordination of Women (Financial Provisions) Measure. This measure covers only the Church of England. No other Church is involved and the Measure does not cover the Anglican churches in Wales, Scotland or Northern Ireland.

To benefit from the Measure those resigning as a matter of conscience over the ordination of women priests must have resigned within the period commencing six months prior to, and ending 10 years after, the date of the Canon of the Church of England enabling a woman to be ordained to the office of priest coming into effect.

The Canon came into effect on 25 February 1994 so those resigning as a matter of conscience over the ordination of women priests must do so between 25 August 1993 and 24 February 2004 to benefit from this Measure.

At the time of resignation, the individual must have been in paid ecclesiastical service of not less than five years duration within the Province of Canterbury (including the Diocese of Europe) or the Province of York.

The two Provinces cover the whole of England, the Channel Islands and the Isle of Man but nowhere else within Great Britain and Northern Ireland.

Payments under the provisions of the Measure should only be made where the individual has resigned from ecclesiastical service over the ordination of women priests, and, as a result, ceases to hold employment or ecclesiastical office and ceases to receive remuneration in the form of either stipend or salary.

There is no restriction placed on where individuals who qualify to benefit from this Measure can live. This means that, although they must have been in paid ecclesiastical service of not less than five years duration within England, the Channel Islands, the Isle of Man or Europe at the time of resignation, after resigning they are free to live where they choose.

Payments and grants

There are three categories of payment which may arise from the Measure:

  • periodical payments
  • resettlement grants
  • discretionary retraining grants.

These payments are described in more detail in the following paragraphs.

Periodical payments

Normally payable for up to three years:

  • 100% of the National Minimum Stipend in the first year
  • 75% in the second year, and
  • 66.6% in the third year.

Individuals who were/are aged 50 or over at the time they claim payment under the provisions of the Measure will continue to receive periodical payments at 66.6 % of the National Minimum Stipend after the third year until they reach the age of 60.

These payments are intended as hardship payments and are suspended or reduced if the person is in paid employment. This paid employment includes any remunerated office with another Church, for example the Church of Scotland or the Roman Catholic Church.

The period during which these payments are made will be treated as pensionable service.

Resettlement grants

These would be payable at the rate of 30% of the National Minimum Stipend.

Discretionary retraining grants

These would be payable, net of any State funding, for a limited period. These grants may be made to assist towards vocational training, for example teacher training courses.

The grants can take the form of the direct payment of fees, or direct monetary assistance.

Liability for NICs

Payments made under the provisions of this Measure are compensatory payments made to relieve and protect individuals from the consequences of their loss of office through resignation.

These payments are not rewards for past services or inducements to continue to perform services and will not, therefore, constitute earnings. As a result, no NIC liability will arise on any of the payments described above.

If staff discover or are asked about similar payments from the Church to resigning individuals they should refer the case to their Technical Support Manager for advice, providing full details and documentation relating to the payments.