NIM30004 - Special Cases: Married Women: 2 Year Test

Regulation 128(1)(c), Social Security (Contributions) Regulations 2001

A married woman loses her reduced rate election if there is a period of two consecutive tax years after 5 April 1978 in which she:

• has no earnings on which Class 1 contributions are payable or are treated as paid (see NIM01007); or
• has not been self-employed

This is known as the ‘two year test’.

If a woman has lost her reduced rate election because of the two year test but it is later found that:

• Class 1 contributions should have been paid or treated as paid for any part of the two year period; or
• she was self-employed during that period,

then her reduced rate election is still valid. The fact that contributions were not paid or were paid late does not matter.