Tax Credits: National Insurance Credits
A person who receives Working Tax Credit but doesn’t pay National Insurance (NI) contributions, because their earnings are too low, may receive automatic NI credits that help to protect entitlement to state pension and certain bereavement benefits.
Broadly, people who get WTC with earnings below the LEL (or as a self-employed person your earnings are below the small profits threshold, £6,515per year) should get the following types of NI credits:-
- If you receive basic WTC - Class 3 contributions only, which protect entitlement to state pension, certain bereavement benefits and widowed parent’s allowance.
- If you receive basic WTC and the disability or severe disability element of WTC - Class 1 contributions, which protect entitlement to state pension, bereavement benefits and some other state benefits.
If you have a joint claim to WTC, the legislation treats WTC as paid to the person with earnings. If a couple both have earnings and both are in qualifying remunerative work for WTC, then they can choose which of them is paid WTC and the person who is physically paid the WTC will receive the credits (see our payments section). This latter point is extremely important as many sources of information on this topic from HMRC and DWP refer to people ‘getting’ or ‘receiving’ WTC in order to receive the credits which can mislead joint claimants into believing that it makes no difference whom they choose to be paid the WTC. Following representations from LITRG, since 2012 TC600 claim form notes were changed so that they carried a warning message as, prior to this date the notes were silent on this point. HMRC withdrew the TC600 claim notes in April 2019 so claimants will again need to be vigilant. If any claimant has missed out on credits as a result of making the wrong election prior to 2012/13 or, in relation to a new claim for tax credits, the wrong election from 6 April 2019, providing their partner was not given or did not need the credits, a complaint should be made to the HMRC and onwards to the Adjudicator’s Office if necessary. More information can be found in our making a complaint section.
NI credits paid in respect of WTC entitlement should be made automatically but you can ask HMRC for a statement of your National Insurance record to check whether you have paid the correct contributions and whether you are receiving any automatic credits. You can also check your contribution record in your Personal Tax Account. More information on how to do this can be found on the GOV.UK website.
Last reviewed/updated 26 April 2022