Contributions Based ESA

just another quick thought on this

ealier in the DMG at Chapter 01, 01053 it gives an example

Example
A claim for ESA is disallowed because the claimant failed the second contribution condition in one of the relevant years. In that year the claimant had been awarded 48 unemployment credits through two awards of JSA. In the remaining period he had been on holiday. The claimant argues that he should be awarded credits for the missing weeks. The DM awards two unemployment credits, and revises the ESA disallowance to award benefit.

So it seems credited contribtuions (in this case because of unemployment) can satisfy the second contribution condiiton for ESA. Are the credits you get whilst on JSA different to the ones you get when on ESA?

asdman wrote:

Thanks for the link, Gordon

I'm still not totally getting it though

41033 The second contribution condition is satisfied if
1. in the last two complete relevant income tax years before the beginning of the relevant benefit year the claimant has
1.1 paid or been credited with class 1 or class 2 NI contributions or

It's the "or been credited with class 1 contributions" bit that's confusing me. When you're on ESA you are credited with class 1 contributions. Are these credits different to the ones referred to in the DMG above?

Hi,

It is perhaps a bit easier if you remember there are two types of NI Contributions relative to this query (Note: I will not go into the actual official classes of NI Contributions, nor how many and what dates need to be met to claim as that over complicates things for the purpose of this query).

The first type are NI Contributions that can only be obtained by actually working in paid work and paying NI contributions (what used to often be described as paying ones stamp!)

The second type are NI Contributions that can be obtained by working in paid work or obtained from the DWP in the form of credits if you claim certain types of benefits (among which includes ESA/JSA/IB etc)

The first type above relate to the first of the 'Contribution conditions for claiming ESA.

The second type relate to the Second Contribution condition.

I hope that makes it a bit clearer.

Pete

Here's somthing else to add to the pot on this one - I receive PHI via a group scheme from my employer. I also receive IB as the PHI payments are reduced by the amount of IB / ESA whether or not I claim it.
I therefore continue to pay NI and tax on both the PHI and the IB.
Once I migrate to ESA and assuming I go into the WRAG and it is limited to 12 months as CB, will the fact that I pay NI on the PHI be sufficient to ensure I continue to qualify for ESA???

Sorry - all sounds so complicated. With luck they will see reason and stick me in the support group, but I am not holding my breath!

pete17971 wrote:

Hi,

It is perhaps a bit easier if you remember there are two types of NI Contributions relative to this query (Note: I will not go into the actual official classes of NI Contributions, nor how many and what dates need to be met to claim as that over complicates things for the purpose of this query).

The first type are NI Contributions that can only be obtained by actually working in paid work and paying NI contributions (what used to often be described as paying ones stamp!)

The second type are NI Contributions that can be obtained by working in paid work or obtained from the DWP in the form of credits if you claim certain types of benefits (among which includes ESA/JSA/IB etc)

The first type above relate to the first of the 'Contribution conditions for claiming ESA.

The second type relate to the Second Contribution condition.

I hope that makes it a bit clearer.

Pete

Thanks, Pete

It's the second contribution condition that I'm interested in. And it seems that what you're saying is that contributions which are credited by the DWP whilst a claimant is on ESA can be used to satisfy the second contribution condition?

I'm just trying to clarify because a few posts back Gordon had written "So although Class 1 credits are paid while you are receipt of IB and ESA(CB), and some other benefits such as Carers Allowance, they only count towards your State Pension and not your entitlement to ESA(CB)."

Hi,

I am not sure if Gordon's reply above is out of context to your query.

However to re-iterate the situation:

NI Contribution Conditions:

You must have paid enough national insurance contributions to qualify for
contribution-based ESA .

In general, you need to have actually paid 25 x class 1 or 2 contributions in one of the last 3 tax years;

and

have paid or been credited with 50 x
contributions in both the last 2 tax years.


Ones National Insurance 'credits' received whilst claiming such as ESA can be used to satisfy the second condition.

However the first condition can only be satisfied by being in paid work, earning above the NI lower earnings limit threshold and thus actually paying class 1 or 2 NI contributions (it should say on ones payslip if one is paying them).

Pete