THOUSANDS of Brits could miss out on extra state pension cash if they don’t apply for a major out of work benefit.
You need 35 qualifying years of National Insurance to receive the full new state pension, which is worth £221.20 a week.
This is what the state pays those who reach state pension age after April 6, 2016.
To get any state pension at all, you will need at least 10 years on your National Insurance record.
Those who take time out of work due to illness or disability can make up these years by getting National Insurance credits instead.
Those claiming certain benefits qualify for these credits automatically, meaning they won’t miss out.
One of those is “new-style” employment and support allowance (ESA).
You can apply for new style ESA if you are under state pension age (66) and have a disability or health condition that limits your work ability.
You must also have worked or been self-employed and paid enough National Insurance contributions, usually in the last two to three years.
But many people don’t know that applying for ESA can give you these credits even if you don’t receive payments.
Steve Webb, partner at pension consultants LCP and former pensions minister, has warned that thousands of people who can’t work could be missing out on these vital credits.
He said: “The ‘credits only’ award has been part of the system for decades.
“But information about it is scant, and people on DWP phone lines often don’t even mention it.
“Even if someone on the phone tells you that you aren’t eligible for the benefit payments, you should still apply to get these essential National Insurance credits.”
“Not doing this can leave a gaping hole in your National Insurance record and leave you short in retirement.”
With new-style ESA, you can receive weekly payments worth up to £138.20, on top of the free National Insurance credits.
However, the exact amount you’ll get will be affected if you get over £85 a week from a private pension.
Half of your private pension income over £85 will be subtracted from your weekly ESA payments if you do.
So, if you get over £350 a week from a private pension, you’ll unlikely qualify for weekly ESA payments.
But this doesn’t mean you can’t apply for the benefit and still take advantage of the free National Insurance credits offered.
Steve said: “If you are unable to work because of disability, it’s vital to make sure you are claiming the correct benefits in order to protect your National Insurance record and to make sure you get a good state pension.
“It is only by claiming either Universal Credit or what is called ‘new style’ ESA that you get vital NI credits.
“Even if you’ve been told on the phone that you may not qualify because you or a partner has too much income or savings, you should still apply simply to get the NI credits.”
HOW TO CLAIM 'NEW STYLE' ESA
YOU can claim 'new style' ESA online.
Once you’ve applied, you’ll be contacted by phone and told when to give the evidence and where to send it.
To submit an application you will need:
- Your National Insurance number
- Your bank or building society account number and sort code (you can use a friend or family member’s account if you do not have one)
- Your doctor’s name, address and telephone number
- A fit note if you’ve not been able to work for more than seven days in a row because of a disability or health condition
- Details of your income, if you’re working
- The date your Statutory Sick Pay (SSP) ends, if you’re claiming it
You can apply for new style ESA up to three months before your SSP ends.
To apply online, visit www.gov.uk/employment-support-allowance/how-to-claim
If you cannot apply online, call the Jobcentre Plus new claims helpline on 0800 055 6688.
CHECK FOR NATIONAL INSURANCE CREDITS
Thousands are thought to be missing out on these NI Credits, leaving them worse off in retirement.
Those on certain benefits qualify for Class 1 or Class 3 credits automatically:
- Class 1 credits count towards your state pension and may help you qualify for some other benefits, for example new style jobseeker’s allowance
- Class 3 credits count towards your state pension only
For example, households on Universal Credit get Class 3 credits automatically.
Parents with active claims for child benefit also get Class 3 credits too.
Individuals can transfer the credits they got from registering for child benefits to their spouse or partner living with them if they have already paid a year’s National Insurance contributions.
If either you or your partner earns more than £70,000, you won’t be eligible for child benefit payments.
However, you can still apply for the benefit to claim the free National Insurance credits it offers.
You can check the full list of people eligible to claim credits by visiting www.gov.uk/national-insurance-credits/eligibility.
It explains the circumstances where you’ll need to claim and when you’ll get it automatically.
CHECK FOR MISSING YEARS
If you think you're missing National Insurance years, the first thing to do is check your state pension forecast.
You can check this through the government’s new “Check your State Pension” tool online at www.gov.uk/check-state-pension.
The tool is also available through the HMRC app, which you can download free on the Apple App Store and Google Play Store.
You’ll need to log in using your Personal Tax Account login details. If you don’t already have an online HMRC account, you can register at gov.uk.
It shows you how much your state pension could increase by and what NI years you’ll need to buy to achieve this.