Help! I have a client who has been in receipt of IB since Jan 95. Unfortunately, his claim has been randomly selected for an internal audit check.

They are now stating that he has been credited 4 NI contributions for a period of unemployment and he had paid 44 self employed contributions for the period 6.6.93 to 9.4.94.

Although my client claimed sickness benefit during the period 23.3.94 to 9.4.94, for which he would normally be entitled to 2 NI contributions, these credits cannot be awarded as they cover the same period covered by the self-employed contributions and duplicate contributions made for the same period only count as one contribution.

Following this, they are now stating that my client has only been awarded with NI contributions with an earnings factor equal to 48 times the lower earnings limit and therefore does not satisfy the second contribution condition ie 50 times the lower earnings limit.

I have absolutely no experience in dealing with National Insurance Credits - can anyone help???

you haven't said what your client's problem is. is he worried about the 2 missing conts/credits or have they withdrawn his payments?

jj

Yes, they have withdrawn his IB on the basis that he has 2 missing credits

i had a feeling that's what it was, but didn't want to embarrass myself with premature eruption.

given the amount of time that has elapsed and the levels of incompetence involved, i'd suggest you check first of all the relevant year, to make sure that 93/94 is in the frame. if your client had linking spells of incapacity/unemployment between April 94 and January 95, it could push him back into the 92/93 year. one wonders how the error arose, after all.

if you're satisfied that 93/94 is relevant, they're right about the overlapping conts and credits. you're client wasn't liable to pay his class 2 conts when he was sick. most likely reason is he paid his contributions by direct debit, and didn't stop the payments - you can check that with him.

you need to ascertain from the DWP the 2 missing weeks, and ask your client if he can account for them and why he didn't pay a contribution for that week. it might be difficult for him to remember what he was doing, after all this time, but when you know the dates, it might help, and those are the two weeks you need to concentrate on.

it's possible that the gaps occurred because spells of sickness or unemployment started in mid-week. i'm not entirely sure about awarding credits, but i believe they are awarded for complete weeks, which run from Sunday to Saturday, so gaps can occur this way.

if you are satisfied that there is no unawarded credit entitlement which you can pursue for the missing weeks, i think the position is as follows -
if the incapacity section had not made an official error in awarding SB when your client didn't satisfy the contribution conditions, it should have notified him of the contribution deficiency, and he would have had the opportunity to late pay any class 2 contributions he was liable for. if he became sick or unemployed part way through a week in which he was self-employed, the non-award of credits for partial weeks implies he should pay a class 2 contribution for that week. the 6 year period for late paying contributions has passed, but since he wasn't notified due to official error, you could try arguing that he should be able to do so, and further, since he overpaid contributions in the weeks he was sick, that the two overpaid contributions should be allocated to the two missing weeks, and he should be given his credits, so he doesn't actually have to pay them any money.

if the DWP went for this, it means they wouldn't have to record a huge official error overpayment. on the other hand, if the 6 year time limit is absolute, (maybe somebody here more au fait with the contribution regs could confirm)and they refuse, it would be worthwhile appealing and arguing the re-allocation/overpaid contributions line. and if that loses, arguing for an extra-statutory award. your client's loss of his incapacity benefit entitlement due to the DWP's actions is much more serious than any overpayment. he will have suffered a major financial loss due to their error. funny the DWP audit team didn't pick up on that, don't you think? disgraceful more like.

i think a problem might arise if your client only went self-employed part way through the year and the gap occurred before the date self-employment started, but i won't go there speculatively.

i hope this is some help, or that someone corrects me if i'm off beam here. you do now have a right of appeal, i believe, but i'm not sure whether it wouldn't be better to go straight for the extra-statutory award and complain of the handling of the situation. maybe somebody could chip in with 'best strategy' views?

the stopping of the client's benefit implies that this audit team failed to recognize the apparent loss to the claimant, and recognized only the alleged (and arguable)loss to the Department.

this alexis cleveland person keeps her head down, doesn't she?


jj

Bouncing in at a total apparent tangent if appeal and/or extra-statutory requests go / don't go, would it help to use the Adjudicator's Office when making a complaint?

http://www.adjudicatorsoffice.gov.uk/

I think that because no-one understands the rules a lot of these mistakes happen and also don't get challenged because no-one understands any of it. So I bet there are very few complaints recorded.

hi andrew

apparently the adjudicator's office won't look at a case when there is access to an independent tribunal, so in this case, i don't think it would help. i didn't even know about the adjudicator's office until you posted that tax credit thingy the other day. i've got an RP appeal on the go at the moment, widow, husband died in 1971, so i've had to look at old contributions conditions and realized from the appeal submission that nobody understands any of it.

in this case, i think there might be an arguable appeal, should it be necessary. there's a contribution deficiency of two contributions (weeks unknown) and (potentially) an overlap of contributions and credits in 2 other known weeks when the claimant was accepted as being sick and not working. those 2 credits have not been awarded, because contributions have been paid in those weeks, and they won't be awarded if it will cause an overlap.

the man was not liable to pay contributions if he wasn't working, so they have been overpaid. it's nonsensical to talk about a 2 week contribution deficiency and a 2 week contribution overpayment in the same year, and the sensible solution would be to re-allocate the 2 overpaid contributions from the 2 weeks he was sick, to the 2 weeks he worked but didn't pay. then the credits could be awarded for the two weeks he was sick, because there will no longer be an overlap. the key is whether he was liable to pay in the two (or rather any 2 of the 4) missing weeks. this depends on the facts. (Cue Nicky)
now that contributions have gone to the inland revenue, the DWP will have to send a file to the inland revenue, to get the re-allocation of contributions sorted out, assuming that all the assumptions i have so far made are viable. then the credits could be awarded.

all of this used to be Sec of State stuff, and given that what's at stake is a huge official error PLUS the loss of this man's entitlement to IB (when it appears that his health problems are so severe they prevent him working again at all, so it is an irrevocable and permanent loss), there are strong arguments for use of discretion to apply a sensible solution, adjust the NI record from 48 to 50 conts/credits, and everybody's happy. the audit team could have suggested/recommended this line of action, but all that's happened is his benefit's been stopped. now the tribunal can decide it.

if re-allocation is blocked for some reason,(probably because nobody understands it)i think there may be an absolute time bar on late payments after 6 years, so he couldn't now pay the 2 contributions. also the man has to have had a class 2 liability in the missing weeks - class 3 voluntary contributions don't count for SB, so if he wasn't self-employed in the missing weeks, as far as i can see, he's stuffed. If he was self-employed, and if his record for that year can't be rectified from 48 to 50 for some legal technicality, but could have been, if he'd been correctly and timeously notified of the deficiency, he should be given an extra-statutory award.

i'm not sure if that's clear at all...i'd better get into practice for my RP appeal... : )

i really think the DWP could go for the sensible solution, and pay interim payments in the meantime.

jj

You are following all this aren't you Nicky?

What happnes now?