NIM01107 | Class 1 Structural Overview from 6 April 2003: Structural changes: Married women and widows reduced rate NICs

Section 8 of the Social Security Contributions and Benefits Act 1992 (SSCBA 1992)

National Insurance Contributions Act 2002 (NICA 2002)

NIM01106 explains the changes to the structure of Class 1 NICs from 6 April 2003 provided by new section 8, Social Security Contributions and Benefits Act 1992 (SSCBA) and introduced as part of the National Insurance Contributions Act 2002.

Section 8(3) SSCBA 92 provides that primary Class 1 NICs are subject to alteration for special cases. One of those special cases is married women and widows.

NIM30000 onwards provides detailed guidance on the liability for Class 1 NICs for certain married women and widows.

The National Insurance Contributions Act 2002 amended section 19(4)(a) of SSCBA 92 which provides for a reduced rate of Class 1 NICs to be paid by certain married women and widows. The amendment restricts the reduction available by providing for it to operate only on Class 1 contributions payable at the main primary percentage.

This means that those married women and widows with entitlement to pay reduced rate Class 1 NICs will pay:

• a reduced main primary percentage on so much of their earnings paid in a tax week in respect of their employment as

• exceeds the Primary Threshold (or the prescribed equivalent) but

• does not exceed the current Upper Earnings Limit (or the prescribed equivalent) and

• the additional primary percentage on so much of the earner’s earnings as exceeds the Upper Earnings Limit (or the prescribed equivalent)

For the tax year beginning 6 April 2003 to 5 April 2009:

• the main primary percentage for employees with a valid reduced rate election was 4.85% and

• the additional primary percentage was 1%

Note that the married women’s reduced rate can never apply to the additional primary percentage.