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Where Taxpayers and Advisers Meet
Spouses and civil partners of armed forces personnel urged to claim National Insurance credits
13/04/2016, by Low Incomes Tax Reform Group, Tax Articles - PAYE and Payroll Taxes, National Insurance, NICs
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It is now possible for individuals who accompany their spouse or civil partner on an overseas posting to claim National Insurance credits that will count towards state benefits.

Background

Many individuals who accompany their spouse or civil partner on an overseas posting do not pay National Insurance (social security) contributions and this can affect their future entitlement to certain state benefits, most notably the state retirement pension. It is now possible to claim National Insurance credits that will count towards those benefits.

Why are National Insurance (NI) credits important?

Eligibility for certain state benefits depends on the NI contributions you have paid. For example, in order to receive the full new state pension, you need to have paid or been credited with NI contributions for at least 35 years. In certain circumstances you can be awarded NI credits that are treated as if you had paid contributions yourself. They cost you nothing.

Who can claim NI credits?

You are automatically awarded credits if you receive certain state benefits, for example, child benefit for a child under the age of 12. In other cases they must be claimed. You can read more about eligibility for NI credits on GOV.UK.

What are the special rules for spouses or civil partners of those in the armed forces?

If you have accompanied your spouse or civil partner on an overseas posting with the armed forces, you may be able to claim NI credits. You can claim your credits in one of two ways:

For periods since 6 April 2010

You can claim the credits by the end of the tax year following that in which the posting ended. For example, if a posting ends in September 2016, a claim for credits must be made by 5 April 2018. The application needs to be signed and stamped by the responsible Career Manager. If you have recently returned to the UK and are still within the time limit to claim these credits, you should do so as the credits obtained in this way (Class 1) provide more benefits than the credits obtained in the method described below.

For periods before 6 April 2010 and any periods from 6 April 2010 where the time limit above has been missed

You can make the claim by applying to HMRC. The credits obtained (Class 3) give entitlement to fewer benefits than Class 1 credits, but do count towards the new state pension.

How do I apply?

If you are eligible to claim for periods since April 2010, you complete form MODCA1. Remember it needs to be signed and stamped by the relevant Career Manager.

If you cannot claim the above, but want to claim for any periods since 6 April 1975, you need to complete the application form found on GOV.UK.

Is there anything else I need to know about this?

As long as you were married or in a civil partnership at the time of the posting overseas, you can still claim even if you are divorced, your civil partnership has been dissolved or you are widowed now. There are certain other restrictions that apply, for example if you are a married woman and had claimed to pay reduced NI contributions, you will not be eligible for these credits.

Useful links

National Insurance Credits
Application for National Insurance Credits MODCA1
National Insurance credits for partners of armed forces personnel overseas after 6 April 1975 

About The Author

The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation to give a voice to those who cannot afford to pay for tax advice. LITRG comprises tax specialists from professional practice and the voluntary sector, from publishing and from HM Revenue & Customs, together with people from a welfare benefits and social policy background. Visit www.litrg.org.uk for further information.
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