NIM21028 | Class 2 National Insurance contributions: Small Earnings Exception: Special Groups: New Enterprise Allowance and similar schemes

Regulation 45(2)(b)(iii) of the Social Security (Contributions) Regulations 2001 (SI 2001 No. 1004) (SSCR 2001)

Under the provisions of regulation 45(2)(b)(iii) of SSCR 2001, payments made in respect of a scheme that was mentioned in section 60(1) of the Welfare Reform Act 1999 could be excluded from the computation of earnings for the purposes of Small Earnings Exception (SEE).

Typically the scheme payments were initiatives to get individuals to return to work using the option of self-employment. The individual did not however have any ‘credits’ to protect his National Insurance record during this time, so the disadvantages of claiming SEE needed to be fully explained.