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Incapacity Benefit and NI Contributions

T.C.T.C. Experienced MentorRegistered, Tutor Posts: 1,448
I have just taken on a new client who is recovering from cancer. She is on incapacity benefit, but is going to start
earning a self-employed income. At the moment, apparently, the DSS pay her NI Contribution. I have never come across this before and am not sure what to advise her to do. Any opinions welcome.

Comments

  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    The DSS will credit you with NI contributions if you're on certain state benefits, including IB and JSA.

    If she's going to be earning under the exception threshold and she's still in receipt of benefits, it makes sense to take advantage of the Class 2 exception. If she's going to be coming off benefits then as you know a full tax year of NI contributions has to be made for it to take effect, so she might want to pay Class 2s in that case.

    You don't need to consider values or amounts of what the DSS credit her NI account with, I believe it's either on or off, so to speak.

    Hope that helps.
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Does she have to come off incapacity benefit if she starts working, albeit it on a large or small scale? She is playing the piano and selling CDs.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    She needs to check with the DSS. IB is payable to people who are too I'll to work. I believe you are allowed to do something like 2hours a week. She has to find out what she can and can't do as she could invalidate her benefit.
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Thanks, thats helpful. I will contact her.
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