How National Insurance contributions affect DWP benefits and state pension entitlement

Martin Lewis: Expert talks about National Insurance credits

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People in the UK need to have a National Insurance number in order to claim benefits even if they have never worked before. When people make National Insurance contributions, it helps builds up their entitlement to what is known as ‘contributory benefits’. These benefits include Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA) and Incapacity Benefit, which is support for someone who faces long-term unemployment because of illness or disability.

Maternity Allowance, if someone doesn’t qualify for statutory maternity pay, and the bereavement benefits such as Bereavement Allowance, Bereavement Payment and Widowed Parent’s Allowance are also included. 

Jobseeker’s Allowance (JSA)

With Jobseeker’s Allowance, the amount a person can receive depends on how much National Insurance they have paid.

There are two types of jobseekers allowance that Britons qualify for by paying into National Insurance which is contribution-based and new-style jobseekers.

To be eligible for contribution-based JSA people must have paid or been credited with the minimum National Insurance contributions in the past two financial years before the year a person claims.

Someone who is eligible for Universal Credit and has paid the minimum National Insurance for two years will be able to apply for new-style Jobseeker’s Allowance.

If someone doesn’t meet the minimum National Insurance contributions for these, they may need to apply for income-based Jobseeker’s Allowance instead.

The qualifying conditions for Employment and Support Allowance are broadly similar to Jobseeker’s Allowance in regards to National Insurance.

Bereavement benefits

With the bereavement support payments, a person can claim financial help if their spouse or civil partner died in the last 21 months.

With this support, people will receive an upfront payment of either £3,500 or £2,500, and then up to 18 monthly payments of either £350 or £100. 

To get the full amount, a person must claim within three months of the death of their partner. 

To be eligible for the payment, the partner of the claimant must have paid National Insurance contributions for at least 25 weeks in one tax year since April 6, 1975.

They must have also passed away due to an accident or disease caused by work and be under the state pension age. 

If a person’s spouse or civil partner died before April 6, 2017, people may be able to get widowed parent’s allowance instead.

State pension

The state pension is also affected by a person’s National Insurance contributions.

The amount of state pension a person can be paid get depends on how many “qualifying years” of National Insurance payments they have.

This includes National Insurance contributions that someone pays when they are working and contributions that are credited to them when they are unable to work.

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Qualifying years are tax years consisting from April 6 to April 5 the next year,

People need to have paid National Insurance for a total of 10 years to get a reduced state pension.

If someone doesn’t have enough qualifying years to get a full state pension, they are able to make up the gaps by paying voluntary contributions.

People can check how much National Insurance they have paid on GOV.UK, they will need to set up an online account to do this. 

If someone believes that they have paid more National Insurance than their record shows, then Citizens Advice recommends that people should contact the National Insurance Contributions Office in writing. 

Citizens Advice added: “You should write even if you haven’t paid enough to get the benefit you’re claiming – it’ll help if you need to claim in future.”

People are also recommended to check what type of National Insurance they have paid in case it’s “been recorded in the wrong way”. 

There are five different classes of National Insurance and they depend on a person’s employment status and how much someone earns.

Citizens Advice states that people should explain why they think their record is wrong and should include copies of any evidence they have. 

Evidence could include things like payslips or a P60 that shows the National Insurance someone has paid.

People can call the National Insurance Contributions Office on 0300 200 3500 if they prefer however the calls can cost up to 12p a minute from a landline and up to 45p from mobiles. 

Citizen’s Advice recommends that, if calling, Britons should note down the date and time of the call, and to take the name of the person who they have spoken to. 

It added: “You might need these details if you need to prove you contacted them.”

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