14 February 2013

National Insurance (NI) Credits and WTC

Tax Credit claimants who receive or are paid WTC but don’t pay NI contributions because they earn less than the lower earnings limit currently £107 per week (rising to £109 per week from 6 April 2013)  or because they are self-employed and have a small earnings exception, can have their entitlement to state pension, certain bereavement benefits and widowed parents allowance protected through their National Insurance record by receiving basic (Class 3) NI Credits. 

Where the claimant is entitled to and receives the disability element or severe disability element of WTC, they may be able to get Class 1 NI credits, which protect entitlement to some other state benefits as well as state pension and bereavement benefits. 

These NI credits should be added to the relevant NI record automatically, but HMRC does provide information about how to check this on their website. 

The rules about who receives credits in a joint claim are more complicated and depend on which member of the couple has earnings. If both members have earnings, then credits are generally given to the person who is paid the WTC. More information is available here.