Talk:National Insurance

I thought national insurance was introduced much earlier, around the 1910s? Joolz 08:43, 31 Jan 2005 (UTC)

When was the National Insurance Number first issued? --jmb 08:26, 21 July 2006 (UTC)

Here's some more raw material, that I'm not confident enough to put on the main page, it's just from my own personal research. Also perhaps should be in the http://en.wikipedia.org/wiki/State_Earnings-Related_Pension_Scheme page.

Basic State Pension

Currently you need to pay enough contributions to qualify for 44 years to get the full basic state pension. This is currently, Aug 2005, just over £82 per week. If you qualify for fewer years, you get proportionately less money. So if you qualified for just 11 years, you'll get 1/4 of the full amount per week. Less than 11 years, you get nothing. Everyone gets 5 years credit for free, so in practice you only need to qualify for 39 years.

You can qualify in a year by paying enough Class 1 or Class 2 contributions. (What are exact rules for this?) If you didn't pay enough due to not working or being out the country, then you can pay voluntary contributions to make yourself qualify for that year.

Proposals introduced through a White Paper in 2006 indicate that the number of qualifying years needed for a full pension will reduce to 30 years contributions for both men and women. The retirement age will be increased to 68 but it will be phased in.

State Second Pension

S2P (State second pension) is an additional income-related pension above the basic state pension. If you are an employee (paying Class 1 contributions), then some of your NI contributions automatically go into this. You are allowed to "contract out" of the S2P. This means the money is still collected by the Inland Revenue, but they pay it into your own special private pension for this purpose. If you are self-employed (paying Class 2 contributions) then you are not contributing towards an S2P. If a self-employed person is registered to contract out, then their contracted-out private pension will receive no contributions for the period while they are self-employed.

(? There are also occupational pensions here which do this differently, but I know nothing about them).

80.177.16.113 15:37, 10 August 2005 (UTC)

I see this page as an overview on the NI system - not a detailed guide - for which uses would be best consulting any of the leaflets issued by the HMRC or by talking to their staff. Many a false peice of advice has come from misleading information.

RichardLowther 20:54, 27 February 2006 (UTC)

NIRS2

I would argue that NIRS2 isn't a Windows based system. Although desk top accessible, it works by 'tabbing' across data with little mouse use and no graphical interfaces to assist in simple tasks. I am open to corrections. RichardLowther 20:54, 27 February 2006 (UTC)

In any case is this section really necessary? Do we really need a detailed section here about the internal computer system used by HMCE to administer the system? It seems that it has been off the press radar for several years; the problems with it were some time ago now. I'm minded to cut this section down to a couple of concise sentences.BaseTurnComplete 14:44, 23 March 2007 (UTC)

Allocation of NI numbers

How does HMRC know about you when you're approaching your 16th birthday in order to issue you with an NI numbercard? 13:13, 10 February 2007 (UTC)

They are notified by the Child Benefit computers - HMRC's computer has links to NIRS, which notifies them. Persons for whom no Child Benefit claim was ever made (for example, children educated abroad or whose parents did not make a claim for moral reasons) will not be issued a card automatically and must make an application. --Lexin 10:46, 6 September 2007 (UTC)

What is the purpose of the NI number???

It's a personal identification number so that claims to benefit and payments of national insurance can be tracked and any under or over payments dealt with. --Lexin 10:46, 6 September 2007 (UTC)

National Insurance Fund

Contrary to what the main article says, the National Insurance Fund is not absorbed into general revenue. The NIF has a distinct existence.

Here is an extract from a recent exchange with the National Audit Office.

Q. Would you please confirm that the NIF exists as a fund quite distinct from ‘other public money’, that is, the Consolidated Fund.

A. Both the National Insurance Fund and the Consolidated Fund are distinct legal entities. Separate accounts are prepared for both Funds and presented to Parliament. All surplus funds are retained in the National Insurance Fund.

The following information was received by the author from the Commissioners for Reduction of the National debt.

The Commissioners for the Reduction of the National Debt (CRND) are responsible for both the National Insurance Fund of Great Britain and the Northern Ireland National Insurance Fund.

Following a review by HM Revenue and Customs, HM Treasury and CRND, a change to the investment strategy of both National Insurance Funds was approved in December 2006. The change, which is expected to lead to lower administration costs, was actioned in January 2007 when all the gilt holdings of both Funds were sold and the proceeds placed into Call Notice Deposits with the Debt Management Account Deposit Facility (DMADF)*. In future both Funds are expected to earn a rate of interest closely related to the Bank of England Official Rate.

At 31st March 2007 the respective balances held were: GB NIF - £38,815.6 million NI NIF - £1,085.2 million

• The DMADF is a deposit taking facility operated by the UK Debt Management Office - see attached operational notice.

All of the NIF's cash in held in CNDs and is therefore available on demand. The value of the NIF varies during each month as there is a cycle of deposits and withdrawals by HM Revenue and Customs. At the end of last month the NIFs value was £44.8 billion.

The NIF's CND deposits in the DMADF are clearly identified as belonging to the NIF and the appropriate principal and interest is payable only to the NIF. The NIF’s investments are held in the name of the Commissioners for the Reduction of the National Debt (CRND).

---

Contributions are not "taxes" because they are not available for general expenditure by the government. The income of the NIF consists of contributions from employees, employers, and the self-employed PLUS interest on its investments.

Each year there is a surplus of the order of 2 billion pounds. The accrued surplus is currently more than 30 billion pounds. The surplus is lent to the government by way of investment in gilt-edged securities, and interest on these investments is paid to the NIF as it falls due.

By the current government’s “golden rule” borrowed money (which includes the NIF surplus) cannot be used to finance current expenditure. It can only be used for investment, mainly capital investment in infrastructure. The money in the NIF can only be used for payment of benefits and administration expenses.

See http://www.britishpensions.org.au/national_insurance_fund.htm for full explanation and link to the document with the full Q&A session with NAO.

Rainbowfarmau 00:39, 24 July 2007 (UTC)