The Department does not enforce this Class 1 liability and it is for you to consider which contributions will best protect your insurance record and your rights to benefit.
E during the first 52 weeks of your employment abroad your earnings are above a prescribed level you may:
A
pay the employee's share of Class 1 contributions for the first 52 weeks of your employment abroad and then pay Class 3 contributions, or
pay Class 2 or Class 3 contributions either from the 53rd week of your employment abroad or from the start of next tax year as necessary.
You cannot pay Class 2 or Class 3 contributions when Class 1 contributions are due.
The following paragraphs explain generally, the benefits available from the various contributions, how Class 1 contributions are calculated and paid, what happens if your earnings are below the prescribed level and the time limits for payment of contributions.
Benefits from Class 1 contributions
If you pay Class 1 contributions and remain ordinarily resident in Great Britain throughout the remainder of your period abroad you will normally be covered for Sickness Benefit and Unemployment Benefit when you return to Great Britain if the contribution years on which benefit is assessed are part of your period abroad. If you have an accident at work or contract an industrial disease while you are liable for Class 1 contributions you will be covered for Industrial Disablement Benefit on return to Great Britain. Class 1 contributions also count towards Retirement Pension and Widow's Benefit.
If you do not meet your Class 1 liability there will be a gap in your insurance record which could affect your benefit and pension entitlement.
Benefits from Class 2 and Class 3 contributions
Class 3 contributions, currently £4.45 a week, provide cover for Retirement Pension and Widow's Benefits. Class 2 contributions, currently £4.55 a week, not only give cover for Retirement Pension and Widow's Benefits but also Sickness Benefit when you return to Great Britain. Again you cannot pay these voluntary contributions as an alternative to meeting any liability for Class 1 contributions so if you choose only to pay Class 2 or 3 contributions there will be a gap in your insurance record for your first 52 weeks abroad which could affect your benefit and pension entitlement.
Payment of the employee's share of Class 1 contributions
The rate of Class 1 contribution is a percentage of levels of earnings which are set by Parliament for each tax year. Tax years run from 6 April in one year to the 5 April in the next.
Contribution tables, forms and an explanatory note which fully explain how to calculate, record, and pay your own contributions for the tax years which cover the first 52 weeks of your employment abroad are enclosed.
If your earnings are more than the amount at the end of column la of the table your liability will be at the highest rate of contributions shown in column lb.
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