Social Security contributions following early retirement (FOI)

Request

A

In the last seven years, how many people of pre-retirement age who have given up paid employment for any reason (but not including a medical reason), or have taken early retirement from their employment, and who have elected not to take up any subsequent form of employment, have refused / declined / do not pay any social security contributions due since they stopped work?

B

How many of these people who have not paid contributions have been prosecuted for not having done so?

Response

A

The Social Security Department (SSD) does not hold information relating to numbers of people who have given up work (for whatever reason) and who are not paying social security contributions.

Anyone who is resident in Jersey, above school leaving age and below pension age has a liability to pay Social Security contributions. The majority of people pay Class 1 contributions deducted by their employer. As such anyone who earns above £908 per month in 2018 would have their contributions covered.

Anyone not covered by Class 1 contributions, including the self-employed and non-employed, is expected to pay Class 2 Social Security Contributions. Class 2 contributions are calculated using taxable income from two years previous (ie 2016 income for 2018 contributions).

There are occasions where people are not expected to pay Social Security contributions. In such cases contributions credits can be awarded. Examples of such cases include those in receipt of certain benefits, students, those caring for a child under the age of five or those unemployed through being made compulsory redundant.

Where people have given up work, do not pay contributions and are not in the group mentioned above then SSD make initial efforts to follow up. Where no contributions are forthcoming the cases are considered individually and may result in being taken through the civil courts process for debt recovery.

Where there is a gap in an individual’s contribution record this will have an impact on their entitlement to benefit and / or pension.

People over 60 who have retired and people on a low income can opt out of paying contributions but would also receive a lesser pension at pensionable age.

B

As the Social Security Department does not hold information relating to numbers of people who have given up work (for whatever reason) and who are not paying social security contributions we are unable to provide the answer to this question.