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HMRC internal manual

National Insurance Manual

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Class 3 NICs: Additional Class 3 NICs: Conditions of eligibility: Second condition

Section 13 Social Security Contributions and Benefits Act 1992

Section 13 Social Security Contributions and Benefits (Northern Ireland) Act 1992

Section 13A(7) - (9) Social Security Contributions and Benefits Act 1992, as inserted by section 135 Pensions Act 2008

Section 13A(7) - (9) Social Security Contributions and Benefits (Northern Ireland) Act 1992, as inserted by section 136 Pensions Act 2008

NIM25103 sets out the conditions of eligibility that a person needs to satisfy to be entitled to pay Class 3 NICs under section 13A. The second condition is that the individual must have 20 years each of which is either:

  • a qualifying year (“QY“), including a QY derived from the payment of social security contributions to the scheme of any European Economic Area (“EEA”) Member State, including Switzerland; or
  • a full year of home responsibilities protection (“HRP”).

Example 1

Ms G reached State Pension age (“SPA”) on 20 January 2009 at age 60. There are 44 years in her working life - from age 16 to 60. (The 2007/08 tax year is the last to be taken into account for calculating her SP entitlement.)

All the tax years from 6 April 1975 to 5 April 1989 are non-QYs. This is because Ms G did not work in those years as she was bringing up her daughter. And as she was receiving Child Benefit for that child, she was entitled to HRP from 6 April 1978 to 5 April 1989 (11 years).

All the 19 tax years from 6 April 1989 to 5 April 2008 are QYs from her earnings as an employee.

Ms G satisfies the second condition. Although she has only 19 QYs, she has 11 years of HRP. When taken together, this gives her 30 years which means that she satisfies the second condition.

Example 2

Mrs P reached SPA on 14 July 2008 at age 60. She has 12 QYs - the 1996/97 to 2007/08 tax years. (That latter tax year is the last to be taken into account for calculating her SP entitlement.)

All the other tax years from 6 April 1975 to 5 April 1996 are non-QYs. During the period 6 April 1977 to 17 May 1980, Mrs P did not work as she was bringing up her children. As she was receiving Child Benefit for them, she was entitled to HRP from 6 April 1978 to 5 April 1980 (two years).

Mrs P does not satisfy the second condition. Twelve QYs plus two years of HRP gives her a total of 14 years - six short of the 20 years she needs to satisfy the second condition.

Mrs P can do nothing to increase the number of years which count towards the 20. Obviously she cannot increase the number of years of HRP. Nor she can pay, under section 13, Class 3 NICs for any of the 1975/76 - 1977/78 and 1980/81 - 1995/96 tax years. This is because the time limits for paying such NICs have all since expired (see NIM25028).

Example 3

It is June 2009. Mrs T reached SPA on 22 May 2009 at age 60. She has 13 QYs - the 1982/83 to 1994/95 tax years. All the other tax years from 6 April 1975 to 5 April 1982 and 6 April 1995 to 5 April 2009 are non-QYs. (The 2008/09 tax year is the last to be taken into account for calculating her SP entitlement.)

During the period 6 April 1979 to 23 August 1982 Mrs T did not work as she was bringing up her son. As she was receiving Child Benefit for him, she was entitled to HRP from 6 April 1979 to 5 April 1982 (three years).

Mrs T does not satisfy the second condition. Thirteen QYs plus three years of HRP gives her a total of 16 years - four short of the 20 years she needs to satisfy the second condition.

Mrs T can do nothing to increase the number of years of HRP. But, under section 13, she is still in time to pay Class 3 NICs for any of the 2003/04, 2004/05, 2005/06, 2006/07, 2007/08 or 2008/09 tax years.

So if she were to pay Class 3 NICs for any four of those tax years, she would then have 20 tax years and satisfy the second condition. She could then, under section 13A, pay additional Class 3 NICs for up to a further six of the non-QYs.

This means that Mrs T could, in fact, pay 12 years of Class 3 NICs:

  • the six years from 2003/04 to 2008/09 under section 13; and
  • having thus met the conditions of eligibility, a further six years under section 13A.

Example 4

The same circumstances prevail as in example 2 above but, in addition, Mrs P worked in Germany between January 1970 and October 1976. During this time she paid social security contributions to the scheme in Germany. This gives her the equivalent of an extra six QYs (6 April 1970 to 5 April 1976). When added to the 14 years she already has – 12 QYs plus two years of HRP - this gives her a total of 20 years. So she satisfies the second condition.

For:

  • the meaning of “qualifying year”, see NIM25001 and NIM25109
  • details:

    • of the first condition, see NIM25104
    • of the third condition, see NIM25106
    • about HRP, see NIM41300 (contents)
    • about the EEA, see NIM33001.