I work as a supply teacher through an agency. During lockdown the agency paid me furlough pay, about £70 per week.
I tried to sign on to claim state pension credits (anticipating gaps) but the DWP automatically closed my claim down when I tried to do this online.
I did not qualify for the contribution-based benefit. But I was unable to contact anyone on the phone, and job centres were closed, so I couldn’t explain I just wanted to claim my state pension credits.
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I have checked my National Insurance contribution record online for this tax year and have seen that it is not full. I am required to pay £300-plus if I want this year to count towards my state pension.
Is there any way I can claim credits now for this year?
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Steve Webb replies: In my previous column I explained the importance of keeping a check on your online National Insurance record, and your experiences are a good example of why this can be so valuable.
You have spotted a gap in your record almost as soon as it arose and are therefore in a better position to challenge it than if you had only noticed years later.
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The issue here is that when you claim a benefit such as universal credit or child benefit, you are not only getting any regular benefit to which you are entitled.
You are also potentially getting valuable ‘credits’ towards your National Insurance record.
Your state pension and certain benefits (such as those for a widow or widower in the event of your death) depend on your NI record, so it is important to make sure that you get the credits even if you have little or no entitlement to the main benefit.
In your case, your NI record at the point of claiming was incomplete which means that you would not have been awarded a regular payment of contributions-based Jobseekers Allowance.
But by satisfying the other requirements for the benefit around looking for work and so on, you could still qualify for the credits either by claiming universal credit on grounds of low income or by simply registering with the Jobcentre as unemployed and looking for work.
In terms of what you can do to challenge this now, it is good that you have spotted the problem quickly.
I would be inclined to argue that you tried to register online but the system threw you out once you were not entitled to a contributory benefit, and the Jobcentres were closed so you were not able to register as unemployed at the time.
The way the appeals process works is that your appeal is initially considered internally by the DWP under a process known as ‘mandatory reconsideration’.
Have you lost state pension credits by not signing up for child benefit or filling form in wrong?
Find out what to do if you didn’t claim because your family doesn’t qualify for child benefit payments here.
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If this is unsuccessful it would then go to an independent tribunal.
Normally there would be a deadline for appeals, but as you’ve only just found out the problem and you’ve acted swiftly, I would hope any tribunal would allow you to make what might otherwise be regarded as a late appeal.
As I explained in my column around National Insurance records, a gap in your NI record is not necessarily a problem.
In terms of your state pension, as long as you expect to build up 35 full years of contributions or credits by the time you reach pension age then you should get a full state pension regardless of this gap in your record.
But if you can get this gap fixed at no cost then that should certainly be done, not least because this would then be one less year you would need to reach the 35-year target.
I should add that the rules around National Insurance credits for people on benefits have changed considerably in recent years, particularly with the introduction of universal credit.
As it can sometimes be hard to get accurate information on the rules, I contacted the DWP for an update and the key points that they made were:
– If you are claiming universal credit either as an individual or as part of a couple then you automatically get what are called ‘Class 3’ credits which count towards your state pension entitlement;
– If you make a successful claim to the new style contributions-based Jobseekers Allowance (JSA) or Employment Support Allowance (ESA), you (but not your partner) get what are called ‘Class 1’ credits which help not only with your state pension but with future entitlement to other contributory benefits;
– If you do not get UC and do not qualify for a contributory benefit, you can still sign on at a JobCentre and register as unemployed and this will also get you Class 3 credits towards your pension.
The most important point therefore is that you register with the system in some way.
If you are unemployed or unable to work through sickness and do not make any contact with the benefits authorities – perhaps because you think you might not be entitled to any cash support – then you risk missing out credits which could cause you a problem with your state pension at a later date.
If the DWP is routinely turning down claims from who do not qualify for contributory benefits, but not effectively signposting people to other ways to get NI credits, this could have serious implications for people’s long-term NI records and needs to be challenged.
I would be interested to hear from readers who have had a similar experience. Please write to [email protected] and put NI CREDITS in the subject line.
Ask Steve Webb a pension question
Former Pensions Minister Steve Webb is This Is Money’s Agony Uncle.
He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement.
Steve left the Department of Work and Pensions after the May 2015 election. He is now a partner at actuary and consulting firm Lane Clark & Peacock.
If you would like to ask Steve a question about pensions, please email him at [email protected]
Steve will do his best to reply to your message in a forthcoming column, but he won’t be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.
Please include a daytime contact number with your message – this will be kept confidential and not used for marketing purposes.
If Steve is unable to answer your question, you can also contact MoneyHelper, a Government-backed organisation which gives free assistance on pensions to the public. It can be found here and its number is 0800 011 3797.
Steve receives many questions about state pension forecasts and COPE – the Contracted Out Pension Equivalent. If you are writing to Steve on this topic, he responds to a typical reader question here. It includes links to Steve’s several earlier columns about state pension forecasts and contracting out, which might be helpful.
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