late NI contributions

Client has become too ill to work but was self employed so cannot claim Ind Inj or SSP. They haven’t paid enough Class 2 NI contributions to get CB-ESA and their partner works F/T so they are unable to get IR ESA either.

My query is about late payment of NI and which would be the relevant years to cover with the payments.( I think I have managed to confuse myself and I would be grateful for any comments or advice).

I can see that under Regs 4(&) and (8) of the SS(CTCNIN) regs 2001 late payment of NI can count for CBESA but only from six weeks after the payment was made. The thing I am less sure about is which years are relevant for the payments. Assuming the payments were made in early Feb 2016 then the new claim would be made in (or at least start from)  Mid-April 2016.

As I understand it the two relevant years for the contributions would therefore be from the first Sunday in January 2014 to the first Sunday in January 2016 - can anyone confirm that I am right in this assumption?

The other factor which I am unsure about is whether the NI office would accept contributions for only those two years and attribute them just to those two years. It looks very much like the client has never paid any Class 2 contributions and I am concerned that it would be a case of ‘bring the whole record up to date’ or nothing at all. It doesn’t sound as if the client has enough money to pay umpteen years of NI but they might just manage two years worth.

Thanks

Pete.

I agree with your interpretation of the law except the two tax years would, in my view, be 2013/14 & 2014/15, ie the two complete tax years immediately before the relevant benefit year (ie, 2016).  2015/16 would not count because it would end in April 2016 and, therefore. would only be completed then also.  Whereas the two qualifying tax years have to have already been completed before the first Sunday in 2016.  The last complete tax year before that date is, therefore, 2014/15.  I’m assuming that he was liable to pay class 2 in the two tax years concerned.

I don’t know the answer to the 2nd part of your query but I would guess he cannot pick and choose which tax years the class 2s are attributed to.  Class 2 aren’t much (£2.80 p/w for current tax year) and he might be able to get away with paying them at the relevant rate for the years they were due, eg if he can show that any error or ignorance on his part in not paying them in time was not caused by a failure to exercise due diligence (however, I’m not sure about this as it’s more tax law and there may be fines in any event). 

Have to say I’ve never had a case of retrospective payment of contributions.  I suppose the correct advice is that he should pay the class 2s if he’s liable to do so irrespective of the benefits entitlement issue.  I suspect you’ve already concluded that, however.  If he had a choice about paying the class2s (which he doesn’t appear to have) the cost benefit analysis would appear to be: the cESA he’d be likely to receive in worst case scenario, ie should he fail the WCA, which would be likely to be £73.10 x 52 wks (ie, he could claim cESA pending appeal against the failed WCA and the combined wait for the WCA and tribunal is likely to be at least 52 weeks) compared to the total cost of his class 2 arrears incl any fines.

On the NI issue, it might be worth speaking to Tax Aid. The claimant can do it himself if the household income is low enough, or you can do it on behalf as Tax Aid do (or at least did) speak to advisers who are calling on behalf of claimants.

Had a client with a similar problem, unfortunately you cannot choose which years to pay late contributions of Class 2s to. The Contributions Office would allocate any payments in date order, starting with the earliest missed payments.