Forgive the pedantry involved in this plea for help (and understanding).

We have a client who is aged 61 years old (was 60 April 24th 2005) and missed out on getting a State Pension, because she only has 7 years worth of paid contributions (does not appear to have been credited with anymore, but does appear to be a victim of the really sexist reduced married womens NI contribution i.e. paid several years worth i.e. from the 70's to 1992, but they appear worthless in this context). It appears she can get HRP backdated for 2 years covering her for 2003/04 and 2004/05, and though any claim will be post 2002/03 i.e. only 3 years backdating maximum, an HRP decision maker advised me should could also qualify for a 3rd year 2000/01? ( despite the current legislation suggesting post 2003 that 3 years backdating is the maximum.

Anyway, allowing for my limited understanding of State Pensions, HRP's and NI contributions?

This is how I think it works ….

To qualify for a 100% State Pension a person has to have paid or have been credited a full years NI for 9 out of every 10 years of their working life. For a woman this amounts to 39 qualifying years out 44.


To qualify for a reduced SP a person has to have paid or been credited NI conts for at least 25% of their working life.


HRP reduces working life but doesn’t actually credit NI conts. So for our client, if we manage to get her 3 years HRP, which I think is the best we can hope for, then her working life will be reduced from 39 to 36 years. However, in order to qualify for a reduced rate pension she needs to have full conts for 25% of that working life, or 9 years in her case. Which as she only has 7 years worth of credits, would leave her with a 2 year deficit. Does that mean her only option is to pay 2 years worth of voluntary contributions i.e class 2 stamps?

Any advice and observations etc etc etc much appreciated.

yours befuddled and confused, and wanting to be told that i've got HRP all wrong and it really does credit national insurance wotsits.

andy

9/10 for effort- everything correct - except she needs to pay CLASS 3 Voluntary Conts. Class 2 are self employed conts.
HRP reduces the number of years needed for retirement pension - but no credits are awarded.
HMRC should have already sent her Class 3 deficiency letters for prev tax years inviting her to pay if they had her correct address.
However, before she pays any class 3 / applies for HRP, if she's married-
Whats the age gap between herself and her husband?
When will her husband be 65?
Can she/they claim Pension Credit?
Will paying Class 3 be worth it? - (approx £7pw stamp X 52 weeks=£364.00pa x 2 years= £728ish)

Thanks Mick,big help!

to answer your questions

1. He's 60
2. 5 years time
3. Not at this stage on the info she has given us, but will double check.
4. Possibly because it will be 5 years before husband qualifys for SRP, but she is not keen on the £728ish payment.

Lastly, 9/10 for effort, but what about presentation and star quality don't they count for anything?

see ya andy

Not defending the married women stamp rules but she would have been given the opportunity to change to "full stamp" in 197? Can't remember the exact year.
This was when the government recognised times had changed. The married women stamp still seemed attractive because it was so small just a few pence but only covered you for industrial injuries.
So rather than changing and paying the first class contrbutions (stamp) many women decided to stay with the married women stamp after the change. From what you have said its seem she made this decision

Hi Penny,

Alas you're right, Ce le vie springs to mind.

Andy
If your client pays the £728ish to Mr Brown aka HMRC,and gets the required HRP years, she should get back, until her husband claims his SP -
SP @ approx £20 pw = £1040pa x 5 years = £5200 - not including the annual uprating.
Not a bad return, even from Mr Brown for an outlay of £728ish - but don't tell him I said so.

Finally answering your question "Lastly, 9/10 for effort, but what about presentation and star quality don't they count for anything?"

No- we can't afford it!.

Couple of thoughts:

I assume eligibility for HRP might derive from a caring role; and if it's her husband she cares for, and if he gets an adult dep addition with IB, that will overlap with any RP she eventually gets, and so no better off. But

In any case of course you also need to factor into the better off calculation any effect of her £20 RP on any HB and CTB they might be getting. If they start off £20 better off, but lose £13 HB and £4 CTB, they'll barely get the outlay back over five years.

Hi Mick, thanks for the calculations, as for affordability, yeah i know what you mean, he says cursing a LA for cutting the funding on my previous paid work, it seems we are both funded by the DWP albeit in different ways with different demands.

Gerry, thanks too, your right about the caring role but its for her mum, as for HB/CTB they don't qualify on income and capital grounds.

Going back to your point Mick i.e. speculating to accumulate, i suspect she will be reluctant, but looks like her best option, i'll see what happens when i discuss it with her later.

Andy

as i understand it married women with certificates of election of reduced liablity cannot pay class 3 contributions.

It appears that she was on reduced married women's contributions between 1975 - 1992, then it was revoked because it had automatically relapsed according to the NI Contributions people.

So presumably post 1992 the above wouldn't apply or does it?

andy

MY understanding is that once revoked then marrried women can pay class threes for appropriate years of deficiency subject to any time limits.

You say it is HRP as carer i take it therefore that she wasn't receiving Carers Allowance as that attracts an NI credit.

Oh good!

no she didn't claim Carers Allowance when she started caring for her mum 2001, because her mum was getting MIG and the implications on the SDP as far as i can tell, the same applies now with her mum's PC etc. Hence her determination to get a SRP.

Andy

Everything you need to know about Class 3 NIC- but were to afraid to ask is at-
http://www.hmrc.gov.uk/nic/class3.htm

Thanks Mick, i can feel my fear dissipating by the second, have a good weekend.

see ya andy

Once again thanks to everyone for their input!

Client has now got her State Retirement Pension!

Interestingly, when she applied for her SRP over the phone, to cut a long story short, she asked for 12 months backdating, only to be told that she had 2 choices?

Firstly, she could go for backdating i.e. 12 months back to 2006, get arrears of £1109.00 and SRP of £26.00 a week.

or

Secondly, they could pay from 2005 (i.e. the date she became 60) get arrears of £2500 ish, and get £21.33 a week (she chose this option).

I understand the first option i.e. maximum backdating 12 months etc etc.

But the second option leaves my tiny brain confused? the only thing i can think of is that she made a claim around her 60th birthday (either unwittingly, subliminally or just forgot and can't remember) and got refused for obvious reasons, and then when she made her subsequent claim i.e. the recent one, the DM then subsequently revised (anytime revision)the earlier one made in 2005 (if she did indeed make a claim, she says she hasn't a foggiest and couldn't care a less, she's happy with her pension award).

Anyone have any ideas to sate my curiosity?

thanks andy

Fri 30-Mar-07 02:06 PM by alban

Hi Andy
I would guess that the first option is an increased weekly pension for the period from when she was 60 up to 12 months ago (under the deferral rules), plus backdating of this (increased) RP for 12 months.

The second option, which she has taken, is the ordinary rate of RP she's entitled to plus a lump sum of all the RP she failed to claim since she was 60 (plus interest).

The deferral rules can substantially increase the weekly pension ...

alban (no longer at Age Concern England, now RNIB)

Thanks Alban, really useful!