Special Cases: Married Women: 2 Year Test
Regulation 128(1)(c), SS(C)R 2001
Regulations provide that a married woman loses her right to reduced liability if thereis 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 apparently loses her right to reduced rate liability 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,
her reduced rate election is still valid. The fact that contributions were not paid or were paid late does not matter.