NIM21044 | Class 2 National Insurance Contributions: Small Earnings Exception: Policy on Paying Voluntary National Insurance Contributions

Regulation 46(b) of the Social Security (Contributions) Regulations 2001 (SI 2001 No. 1004)

Although SEE removed the liability to pay Class 2 National Insurance contributions (NICs), a person could pay Class 2 NICs voluntarily for periods during which SEE was granted. Alternatively, they could pay Class 3 NICs if entitled to do so, see NIM25000 onwards.

It was important that self-employed contributors entitled to SEE considered the advantages of paying NICs to protect their rights to benefits. Before they applied for SEE they had to be advised of the potential benefits ofpaying Class 2 NICs as opposed to applying for SEE. If they were granted SEE, they could still choose to pay voluntary NICs. Before making any decision they had to seek further advice from DWP about their individual benefit position.

Class 3 NICs count towards a lesser range of benefits than Class 2, see NIM25002 for details. The weekly rate of Class 2 NICs is less than the weekly rate of Class 3 NICs and represents better value for money.