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HMRC internal manual

National Insurance Manual

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Class 3 NICs: Additional Class 3 NICs: date from which NICs are treated as paid for basic State pension and bereavement benefit purposes

Section 13 Social Security Contributions and Benefits Act 1992

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

Section 13A(3) Social Security Contributions and Benefits Act 1992, as inserted by section 135 Pensions Act 2008

Section 13A(3) Social Security Contributions and Benefits (Northern Ireland) Act 1992, as inserted by section 136 Pensions Act 2008

Regulation 6C of the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations 2001, as inserted by regulation 3 of the Social Security (Additional Class 3 National Insurance Contributions) Amendment Regulations 2009 with effect from 6 April 2009

Regulation 6C of the Social Security (Crediting and Treatment of Contributions, and National Insurance Numbers) Regulations (Northern Ireland) 2001, as inserted by regulation 3 of the Social Security (Additional Class 3 National Insurance Contributions) Amendment Regulations (Northern Ireland) 2009 with effect from 6 April 2009

NIM25101 explains that the section 13A took effect from 6 April 2009. So a person who satisfies the conditions of eligibility – see NIM25013 - to pay additional Class 3 NICs cannot pay such NICs before that date.

This means that those:

  • who reach State Pension (“SPA”) age between 6 April 2008 and 5 April 2009; and
  • who reach SPA on, or shortly after, 6 April 2009 will have to pay any additional Class 3 NICs very promptly on or after that date in order for their basic SP (“BSP”) to increase from the earliest possible date. In view of this and the fact that deciding whether to pay additional Class 3 NICs may be a complex matter depending on the individual’s circumstances, it has been decided that there should a limited period during which, if an individual pays, their BSP entitlement will be increased from the date they reach SPA. New legislation – regulation 6C – provides for this.

Regulation 6C provides that additional Class 3 NICs which:

  • are paid on or after 6 April 2009 and before 6 April 2011 are treated as paid on the earlier of the following dates:

    • the actual date of payment; or
    • the date on which they reach SPA (regulation 6C(2))
  • are paid on or after 6 April 2011are treated as paid on the date on which they are paid (regulation 6C(3)).

Example 1

Mr J reached SPA on 31 March 2009. He has 41 qualifying years (“QYs”) which entitles him to a 94% BSP. He needs only three more QYs for a full BSP. The only non-QYs from 6 April 1975 are the 1985/86, 1986/87 and 1987/88 tax years. The time limits for paying Class 3 NICs under section 13 for any of those years have long since passed (see NIM25028). So there are no years for which he can pay Class 3 NICs under that section.

He satisfies the conditions of eligibility to pay additional Class 3 NICs (NIM25013). As Mr J did not pay, was not treated as having paid, or was not credited with, any NICs in any of those years, the number and amount of Class 3 NICs that he needs to pay to make each of those a QY is £626.60 (52 x £12.05; NIM25108 and NIM25109). On 5 August 2009, he sends HMRC a cheque for £1,879.80 in respect of the amount of additional Class 3 NICs payable for the three years.

Although the Class 3 NICs were paid on 5 August 2009, as this was before 6 April 2011, the NICs are treated as paid on 31 March 2009. This is the earlier of the actual date of payment (5 August 2009) and the date on which Mr J reached SPA. His BSP entitlement is revised to 100% from that date. He will get arrears of BSP from when he first became entitled to his BSP.

Example 2

Mrs W will reach SPA on 6 November 2010. She needs 30 QYs for a full BSP. She has 25 QYs. The only non-QYs from 6 April 1975 are the 1975/76, 1976/77, 1977/78 and 1978/79 tax years. The time limits for paying Class 3 NICs under section 13 for any of those years have long since passed (see NIM25028). So there are no years for which she can pay Class 3 NICs under that section.

She satisfies the conditions of eligibility for paying additional Class 3 NICs (NIM25013). On 30 May 2011, she pays 52 Class 3 NICs for each of the four non-QYs (see NIM25109).

As the Class 3 NICs are paid after 6 April 2011, they are treated as paid on the date of payment ie, 30 May 2011. The four extra QYs count for her BSP from that date.

Example 3

Mrs A will reach SPA on 12 January 2012. She needs 30 QYs for a full BSP. She has 21 QYs. The only non-QYs from 6 April 1975 are the 1978/79, 1979/80, 1980/81, 1981/82, 1982/83 and 1983/84 tax years. The time limits for paying Class 3 NICs under section 13 for any of those years have long since passed (see NIM25028). So there are no years for which she can pay Class 3 NICs under that section.

She satisfies the conditions of eligibility for paying additional Class 3 NICs (NIM25013). On 1 December 2011, she pays 52 Class 3 NICs for each of the six non-QYs (see NIM25109).

As the Class 3 NICs are paid after 6 April 2011, they are treated as paid on the date of payment ie, 1 December 2011. When she claims her SP, her BSP entitlement will be based on 27 QYs.