Can an unemployed person pay NIS? (2023)

Can you pay voluntary National Insurance contributions if you are not working?

If you're not making National Insurance contributions and want to make voluntary contributions to ensure you don't continually build up a gap in your National Insurance record, you can set up a Direct Debit to pay the money monthly.

You might not pay National Insurance contributions because you're earning less than £242 a week. You may still get a qualifying year if you earn between £123 and £242 a week from one employer.

To find out whether you have paid enough National Insurance contributions you can contact HMRC on 0300 200 3500 (or 0300 200 3519 if you have a speech or hearing impairment). You can also visit the Gov.uk website to check your National Insurance contributions record online.

Gaps can mean you will not have enough years of National Insurance contributions to either: get the full State Pension (sometimes called 'qualifying years') qualify for some benefits.

You pay mandatory National Insurance if you're 16 or over and are either: an employee earning above £242 a week. self-employed and making a profit of £6,725 or more a year.

When do you pay National Insurance? You start paying NI when you're 16, providing you're employed and earning over £190 per week, or you're self-employed and making at least £6,725 profit a year. You stop paying Class 1 and Class 2 NI when you reach the state pension age.

However, you do not actually have to pay any Class 1 NIC until your earnings reach the earnings threshold (primary threshold) (£190 (6 April – 5 July 2022) or £242 (6 July 2022 – 5 April 2022) per week; £823 (6 April – 5 July 2022) or £1,048 (6 July 2022 – 5 April 2023) per month for 2022/23).

To be eligible for New Style Jobseeker's Allowance ( JSA ) you'll need to have both: worked as an employee. paid Class 1 National Insurance contributions, usually in the last 2 to 3 years (National Insurance credits can also count)

You'll need a National Insurance number to claim benefits, even if you've never worked before. You'll also need to have paid some National Insurance to qualify for certain benefits.

Income test

If you earn above $150 per fortnight, your payment reduces by 50 cents for each dollar between $150 and $256 then by 60 cents for each dollar over $256. If you're single and a principal carer, you can earn up to $150 per fortnight pre tax, before your payment is affected.

How much is voluntary NI contributions?

The rates for the 2022 to 2023 tax year are: £3.15 a week for Class 2. £15.85 a week for Class 3.

Pension contributions made by an employee are subject to both employer and employee national insurance. However, by converting employee pension contributions into employer contributions the tables are turned and neither the employee nor the employer has to pay national insurance on the pension contributions.

How will National Insurance work if I have multiple jobs? As well as tax, you might have to pay some National Insurance contributions (NIC) on income from another job. However National Insurance operates in a different way from income tax. With tax there is a single tax-free amount available per person per tax year.

You need 30 qualifying years of National Insurance contributions to get the full amount. You'll still get something if you have at least 1 qualifying year, but it'll be less than the full amount. You might qualify for an Additional State Pension, depending on your contributions.

If you're eligible, and you could benefit by boosting, buying extra years involves paying what are called 'voluntary class 3 NI contributions'. The rate is £15.85 (2022/23) per missing week of NI contributions – £824 for a full year.

If you work part-time and earn over a certain amount your employer will have to deduct tax and national insurance contributions from your salary in the same way as if you were working full-time.

National Insurance is not due on all your earnings. You are allowed to earn some money without paying National Insurance as an employee. National Insurance contributions entitle you to certain benefits (like a non-means tested level of Jobseeker's allowance). They also count towards the state retirement pension.

Thus, if you're not paying your National Insurance contributions you'll end up with gaps in your NI record, and won't be able to qualify for some benefits. On top of that, you'll be penalised by the HMRC for missing your National Insurance payments.

You might be able to get 'new style' Jobseeker's Allowance (JSA) while you look for a full-time job. You can get it while you're out of work, or if you're working less than 16 hours a week. You can claim new style JSA on its own or with Universal Credit - check if you can get Universal Credit.

It is important to register as an unemployed person and to inform HM Revenue & Customs that you are out of work as it ensures that your National Insurance Contribution will be paid and your state pension won't be affected.

What are the 2 types of job seekers allowance?

There are two types of Jobseeker's Allowance, income-based and contribution-based.

Who is a Debtor? A debtor can be defined as the individual or firm who receives the benefit without paying for it in terms of money or money's worth immediately but is liable to pay the money back in due course of time.

You can fill out your application for unemployment benefits online via the Federal Employment Agency's website. Alternatively, you can ask for a paper copy of the form by calling your local agency on the phone.