People who need not pay contributions
To download this leaflet click on the link below People who need not pay contributions
Part One - Introduction
This leaflet explains that some people may not have to pay contributions, and how their rights to benefits are affected if they do not.
It is important to remember that the benefit a person receives is related to the contributions they pay. The rate of certain benefits (for example Old Age Pension) depends on the contributions paid or credited each year over the whole insured life. For example, if a man stops contributing, he may find that he and his wife (if she depends on his contributions) only get a reduced pension, or possibly no pension at all. Other benefits (e.g. Short Term Incapacity) depend on recent contributions paid or credited. If no contributions have been paid or credited, no benefit can be paid.
Consider your position carefully. Remember that if you choose to discontinue payments, you may lose the benefit of contributions you have already paid and if you become sick or unemployed, contributions cannot be credited to you.
This leaflet is only a general guide, and must not be treated as a statement of the law. Before choosing not to pay contributions you must talk to us to make sure that you fully understand how your rights to benefits may be affected.
Part Two - Contributions
Class 1 Contributions
These are paid when people are employed. There are two types of Class 1 contribution:
Primary Class 1 Contributions from employees This is deducted from the employee’s wages before they are paid. It is a percentage of all payments of gross earnings made to an employee up to a monthly earnings ceiling. Please see the leaflet entitled Contribution Levels and Benefit Rates also contains further information on these rates.
Earnings related Class 2 Contributions
Like an employed person, if you have lower earnings, you may be entitled to pay a smaller contribution. It will be topped up to the full Class 2 contribution, if your income in the relevant Income Tax year is between certain limits. If you think you may be entitled to pay an earnings related Class 2 contribution, please see the leaflet entitled People who are Self-Employed & Non-Employed which will provide more details.
Credits
Gaps which would appear in your contribution record may (subject to certain conditions), be filled by the award of credits. You may be able to have contributions credited if you are:
- a student over 18 (for a maximum of three years)
- sick or unable to work
- unemployed
- widowed
- staying at home to care for your child
These credits help prevent gaps in your contribution record, and protect your right to future benefits.
Please note:
Credits cannot be awarded for any month that you have:
- a married woman’s election
- an over age 60 election or
- a small income exception.
Who must pay contributions?
In general either Class 1 or Class 2 contributions should be paid by every person for every month during which they are between school leaving age and pension age.
Who does not have to pay?
These people do not have to pay contributions:
- People who are receiving Survivor’s Allowance (see Part Seven)
- People over pension age, including women who can claim a pension at the age of 60, or those who claim their pension between the age of 63 and 65 years of age.
- Retired people over 60 who have chosen not to pay (see Part Four)
- People under school leaving age during the whole of any month (see Part Five)
- People who have been granted a Small Income Exception (see Part Six)
- People in full-time education or training (see Part Five)
- People who go to live outside the Island (unless they are in Jersey employment) (see Part Seven)
- People in prison or in legal custody (see Part Seven)
- People newly arrived in the Island for the first time do not have to pay until they have been living here for six continuous months (see Part Seven)
This leaflet deals with the Social Security position of each of these groups. Please remember you must contact the department if you wish to stop paying contributions.
Part Three - Married Women
Married women who work for an employer
You may choose not to pay contributions if you answer yes to all the following statements:
- you married before April 1st 2001
- you work for an employer
- you were registered with the department before April 1st 2001
- you obtained a social security number
Please note: Your employer must still pay his share.
If you do not pay contributions:
- you will be covered for Accident Benefit only
- your employer must hold a red Social Security registration card in your name. If you do not have one you should apply to the Department. Please bring your marriage certificate and your blue registration card ( if you have one).
Married women who do not work for an employer
If you are a woman who married before April 1st 2001 and you do not work for an employer, you may choose to pay a Class 2 contribution if you wish or you may qualify for small income exception. Please ask us for further information.
Is it worth choosing to pay contributions?
This depends entirely on your circumstances. For example would your own contribution bring you benefits which your husband’s would not?
In making your choice you should remember:
- If you fall ill you cannot draw benefit through your husband’s contributions. You can only get Sickness Benefit if you pay contributions yourself.
- The standard rate of Old Age Pension paid to you on your husband’s contributions is less than that which you could receive on your own contributions.
- If you are planning to have a family, Maternity Allowance can only be paid based on your own contributions record. For further information please read the leaflet entitled Benefits for you and your Child
It is in your best interests to talk to us about your individual circumstances before making your choice.
How does a married woman register her choice?
If you are working for an employer and DO NOT WANT to pay contributions you MUST call into the department and complete a Married Woman’s Election form.
If you have a blue registration card you must exchange it for a red registration card. Until your employer has a red card, contributions must continue to be deducted from your wages.
When has notice to be given?
By law, the choice you make takes effect from the first day of the month after we receive the application. However, you can call at the Department any time after your last pay day in one month, but on or before the first Friday in the following month:
When you make your application, please bring your marriage certificate and, if you have one, your Social Security registration card.
Important Note
You should tell us as soon as possible if you get divorced or separated. When you are divorced you have to pay contributions as a single person even if you chose not to pay as a married woman. There are rules which may help you qualify earlier for Short Term Incapacity Allowance, so please ask us for details.
If you had a married woman’s election, you can never be entitled to back pay contributions to cover the time of the election. Please note: if you re-marry ( after 1st April 2001) you cannot take a married women’s election.
Which benefits do your contributions entitle you to?
A full contribution record of your own will entitle you to the complete range of Social Security benefits. These are:
- Incapacity Benefit (Short or Long Term Incapacity Allowance and Incapacity Pension)
- Maternity benefit - (Maternity Grant and Maternity Allowance)
- Old Age Pension
- Death Grant
Part Four - Home Responsibility Protection (HRP)
If you stay at home to care for your child, the Social Security Scheme can help you build up your entitlement to a States’ Pension and Survivor’s benefits. This help comes in the form of credits that can be put on your Social Security account. They take the place of contributions but do not give entitlement to Short or Long Term Incapacity Allowance or maternity benefits. They will however allow entitlement to Incapacity Pension. You can get HRP for a maximum of ten years during your working life.
Please ask for further information from either the Health or Contributions Zone in the Department.
Part Five - Retired People over 60
Pensioners
You do not have to pay a contribution for any month during the whole of which you are getting an Old Age Pension. If you are employed, your employer must still pay the secondary Class 1 contribution.
When you reach pension age, if you have a blue Social Security registration card you should bring it to us so that we can exchange it for a red registration card. The red card indicates to your employer that they should not deduct Social Security contributions from your wages. If you are still employed you should give the new card to your employer as soon as possible.
Between 60 and 65 years old
If you have reached 60, have retired and do not intend taking up work, you may choose to stop contributing.
If you start work again, even part time, you should talk to us about cancelling your choice not to pay and starting to contribute again. Do this as soon as you start work because you cannot back pay contributions to cover any time you have an election not to pay contributions.
Before you decide not to pay contributions, it is very important for you to re-read the introduction to this leaflet. When you stop paying contributions, your right to some benefits is reduced or ended. Please ask us for advice before you act.
Registering your choice
If you want to stop paying contributions you should bring your registration card to the Department. We will ask you to fill in an “over age 60 election” form, to tell us the date you retired. You will stop paying contributions from the first day of the month after the one in which you applied.
When you make your application, please bring your birth certificate, and, if you have one, your Social Security registration card.
Part Six - People in full-time education or training
General
Students in full-time education do not have to pay contributions. ‘Education’ means a course of organised study at a university, college, school or other educational establishments.
As a full-time student you will not need a Social Security registration card until you are 18 years of age. However, if you take a job for 8 hours or more per week (for example, evening work or a holiday job) you must have a card and pay contributions.
If you are under 16 years
If you are under 16 years of age and working, neither you nor your employer has to pay contributions. However, you should call in and register for a Health Card as this will allow you to claim benefit under the Health Scheme.
If you are over 16 years
If you are over 16 years of age and working 8 hours or more per week, you must register and both employer and employee should pay contributions.
If you are over 18 years
If you are over 18 years of age and attending a recognised college of further education, you may qualify for Student’s Credits. These credits are awarded for a maximum period of 36 months throughout your insurable life (usually from 18 - 65 years).
After your course finishes, you may pay any missing contributions at any time before the year in which you reach pension age. Please note, when you pay the contributions, you will be charged the rate that applies at the time you pay.
Part Seven - Small Income Exceptions
Who qualifies?
If your income is so small that you do not have the money to pay any Class 2 contributions due, you can apply for a small income exception. You should call at the Social Security Department for more information.
What income is taken into account?
When claiming you must declare all your income, including any benefits in kind which you receive, (for example, the value of any free food and lodging).
Certain Social Security benefits will not be taken into account when your income is worked out.
You must, however, declare all your income when applying and we may ask you for evidence to support your application.
All information you give about your income will be treated in the strictest confidence.
Important Note
Before you decide to apply not to pay Class 2 contributions, it is very important for you to re-read the introduction to this leaflet. When you stop paying contributions, your right to some benefits is reduced or ended. Contributions cannot be credited to you for weeks of sickness or unemployment so please ask us for advice before you act.
General
If you are granted a small income exception, you may still contribute at the standard Class 2 rate for any month you want to. This will build up your contribution record and might entitle you later to benefit at a lower rate. If you go to work for an employer for 8 hours a week or more, Class 1 contributions will be paid and credited to your contribution record. You may also pay any missing contributions at any time before you reach pension age. These contributions would be due at the rate that applies at the time you pay. If you need more information about contribution rates and benefits, please ask us.
Applying
To apply for a small income exception, call at the Department to fill in the confidential application form.
If you are granted a small income exception it will operate until the 31st December. An application for the following year will be sent to you during December. It is important that you fill out this form and return it to the Department as soon as possible.
Part Eight - Other Groups
People in prison or legal custody
If a person in prison or legal custody continues to receive wages from an employer, both the person and the employer have to pay their contributions.
If someone does not receive wages, contributions do not have to be paid for any complete month spent in prison or legal custody. Contributions are due for the month in which legal detention takes place and the month in which it ends.
People leaving the Island
If you leave the Island permanently, and are not in Jersey employment, your liability for contributions stops.
If you are in Jersey employment, but working temporarily outside the Island, you may still have to pay contributions. Ask your employer to contact the Department to check. If you are liable, a certificate will be issued so that you can prove that Jersey contributions are being paid. This will prevent you being pursued for costs in the country in which you are living.
People coming to the Island for the first time
If you have not yet been insured in Jersey and you do not work for an employer then you do not have to pay contributions straight away. Once you have been in the Island for a continuous period of six months, you will have to start contributing.
People who have already been insured in Jersey become liable for contributions as soon as they return.
Survivors
If your spouse dies you may be eligible to claim Survivor’s Benefits.
There are two types:
- Survivor’s Allowance
- Survivor’s Pension
Whether you qualify for these benefits depends on your spouse’s contribution record. You can receive the Survivor’s Allowance for 52 weeks immediately following the death of your spouse and during this time you are not required to pay contributions. At the end of this period, you may be eligible to receive a Survivor’s Pension but you will have to pay contributions until you reach pension age.
Part Nine - Further Information
This leaflet gives general information and does not try to give full details on any particular matter. It cannot be treated as a statement of the Law.
Please contact us if you have any questions or suggestions about the information contained in this leaflet.
Our staff are here to help you, please telephone us on 445505 or call into our office.
If you become unemployed you may wish to visit our website http://www.jobsinjersey.gov.je/ and search for current vacancies online.
Please note: calls to the Department may be monitored for training purposes.
The Social Security Department is covered by the current Jersey Data Protection (Jersey) Law.
Other Leaflets that may be of interest
Large print versions of most of our leaflets are available. Please call us on 445505 and we will be happy to send them to you.
