You must take into account all payments from your employer, wages or salary and any other allowances paid in cash for example a cost of living allowance an education allowance for a child. Do not include the value of benefits kind (eg free board and lodging) or any other cash allowance from any source other than your employer. Convert payments made in a foreign currency to sterling using the rate of exchange which applies on the date you receive it.
After you have calculated the amount due and completed the forms send them to Overseas Contributions with the amount due.
Class 1 contributions cannot be paid for any week/month during your 52 week period of liability if your earnings fall below the level at which contributions are due. If this happens you may not have benefit cover from the tax years in which Class 1 contributions are paid. In these circumstances it is open to you to pay sufficient Class 3 contributions to protect your rights to Retirement Pension and Widow's Benefits. More detailed advice will be given if and when you do pay Class 1 contributions.
If you meet your Class 1 liability for the first 52 weeks of your employment abroad you will be sent a statement if your record for the relevant tax years is deficient. The statement will not be a demand for payment. It will detail the amount you can pay to protect your rights to a pension and for Widow's Benefits. Because you cannot pay Class 3 contributions for a period of Class 1 liability you should write to Overseas Contributions for advice before making any payment.
Statements are issued several months after the end of the tax year which they
cover.
Payment of Class 2 or Class 3 contributions
If you decide not to pay Class 1 contributions, you may choose to pay Class 2 or Class 3 contributions only from the end of the period of Class 1 liability. The leaflet NI 38 explains the methods of payment available. If you decide to do so please complete and return the application form CF83, the last page of the leaflet.
Time Limits
There are statutory time limits for the payment of contributions which are explained in detail in the enclosed leaflet NI 48.
Class 1 contributions
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must be paid before the end of the second tax year after the one in which they were due and before the beginning of the relevant benefit year. If they are paid after the start of the benefit year they do not count for any benefit until 6 weeks after they are received in the Department.
Class 2 contributions To count for Sickness Benefit Class 2 contributions must be paid before the end of the second tax year following that in which they were due and before the beginning of the relevant benefit year. Again, if they are paid after the start of the benefit year they do not count for Sickness Benefit until 6 weeks after the date they are received in the Department. There is also a penalty under which contributions have to be paid at a higher rate if payment is not received within one year of the end of the tax year in which Class 2 contributions were due.
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