I'm trying to figure out if a contracted-out rebate is due in respect of year 2003/4. Earnings were 10500. As I read it, a rebate is due for 10500 less the Lower Earnings Limit of 4004 i.e. 6496. (leaflet CA17). NICO have refused this saying " the total of National Insurance that you have paid falls below the lower earnings level". Firstly, I don't see what National Insurance paid has to do with it - I thought it was based on earnings. Secondly, what do they mean by lower earnings level? I only see reference to a lower earnings limit or threshold. If they meant threshold then yes, earnings were lower than that, but it thought it was the lower earnings limit that counted. Any advice appreciated before I try to ring them. NB
N.I.Contributions - can someone clarify please.
Jan 25, 2006
3 Replies
There is more than one level these days.
LEL 4,264.00
1EL 12,100.00 2EL 27,800.00 UEL 32,760.00I suspect that they mean the "First Earnings Level" of £12,100, below which S2P gathers moss at the rate of 40% of earnings above the LEL. Above that it is 10% to the "Second Earnings Level" after which it is
20% to the "Upper Earnings Level".Presumably you have to be above that to get rebates.
Contracted out to what? An occupational scheme or a personal/stakeholder scheme?
If it's an occ scheme then you should automatically pay reduced NI. If it's a personal/stakeholder scheme then you pay full NI and the scheme claims the rebate.
Was the full amount subject to Class 1 NI (ie employment income)? Was it all earned in one job? Was most of it earned during a short period in the year?
Earnings subject to class 1 NI. You obviously don't get NI rebates on dividends, interest etc which aren't subject to NI, or self employed income etc.
The primary/secondary threshold is about 94 a week
It is.
And if you earned under the 1EL, you accrue S2P as if you earned the 1EL.
AIUI you can get rebates if you earn below the 1EL.
For an occ scheme you get the normal 1.6% rebate (plus employer's rebate). But you also build up some S2P if you earn less than the 2EL (the difference between S2P and the old SERPS flat 20%).
For a private scheme you get double the age-related rebate rate up to the 1EL, then half to the 2EL, then the normal rate. You also get some S2P on top if you earn under the 1EL (based on the difference between the 1EL and your actual earnings).
Rates are here:
formatting link
Join the Discussion
Have something to add? Share your thoughts — no account required.
Didn't find your answer?
Ask the community — no account required