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HMRC internal manual

National Insurance Manual

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HM Revenue & Customs
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Special cases: Volunteer Development Workers: Specific provisions relating to the payment of the special rate of Class 2 NIC: Rate of NIC and benefit/pension entitlement

Regulation 152(b) Social Security (Contributions) Regulations 2001

Regulation 10C(5) and (6) Social Security Benefit (Persons Abroad) Regulations 1975

A volunteer development worker does not pay the “standard” rate of Class 2NIC (NIM20000 onwards (Class 2 liability)); theypay a special rate.

The weekly rate is calculated as 5% of the weekly lower earnings limit for the week forwhich the NIC is being paid. For example, the rate of NIC for the 2001/02 tax year is£3.60. This amount is 5% of £72.00, the weekly lower earnings limit for that year.

Rates of the NIC for years prior to 2001/02 should be held locally. If they are not andyou need details, contact NICO International Services, Technical Advice Unit, Room BP1301,Benton Park View, Newcastle upon Tyne. The phone number is (0191) 225 4462.

The special rate of Class 2 NIC counts towards the following benefits:

  • basic retirement pension
  • bereavement benefit
  • contributions-based jobseeker’s allowance
  • incapacity benefit.

A volunteer development worker may also be entitled to industrial injuries benefit.Providing:

  • the accident arises out of, or in the course of, the employment; or
  • the disease is contracted as a result of the employment,

any benefit will be payable from the date of their return to Great Britain, eventhough:

  • the accident happened abroad; or
  • the disease was contracted abroad.