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National Insurance

Volume 168: debated on Monday 5 March 1990

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To ask the Secretary of State for Social Security how many women and men earned below the national insurance threshold in each of the last 15 years; and how many earned over it.

The table gives the numbers who paid employees' class 1 national insurance contributions at some time during the years from April 1975, when earnings related contributions with a lower earnings limit were first introduced, until 1986–87 which is the latest year for which final figures are available. The fact that some class 1 contributions were paid means that the person concerned must have had earnings which reached the lower earnings limit on at least one occasion during the year.

YearWeekly lower earnings limitNumber who paid Class I national insurance contributions (thousands)
The figures are for contributions paid in the United Kingdom except for 1975–76 which refer to Great Britain only.
¼½1240 per cent. rate applies5
Primary (employee's) class 1 contributions not contracted-out rates
April to September weekly rates3·3712·1324·2529·2529·2529·2529·25
October to March weekly rates3·059·1221·2426·2426·2426·2426·24
Total for the year166·92552·501,182·741,442·741,442·741,442·741,442·74
Primary (employee's) class 1 contributions contracted-out rates
April to September weekly rates2·8810·2919·7223·6123·6123·6123·61
October to March weekly rates2·577·2816·7120·6020·6020·6020·60
Total for the year141·70456·82947·181,149·461,149·461,149·461,149·46
Class 2 (self-employed) contributions
Weekly rate4·254·254·254·254·254·254·25
Total for the year221·00221·00221·00221·00221·00221·00221·00

I regret that detailed information on the numbers of employees earning less than the various lower earnings limits over the above period is not available. However, for the years 1984–85 onwards it is estimated that in any week about 2·75 million people earned below the lower earnings limit of which about a quarter were men. Up to 0·5 million of these people would be only temporarily below the lower earnings limit by virtue of a reduction in their normal earnings—for example due to sickness.

To ask the Secretary of State for Social Security, further to his reply to the hon. Member for Chesham and Amersham on 12 December 1989, Official Report, column 584, what is the reason for the 0·48 fall in the real weekly value of national insurance child dependency addition plus child benefit for widowed mothers between 1979 and 1989.

Child benefit legislation specifically provides for the rate of child benefit to be taken into account when determining the levels of child dependency increase payable with national insurance benefits. The method of doing this is to calculate what the child dependency increase would be if the general uprating percentage were applied, and then to deduct any cash increase in child benefit. It applies to all child dependency increases not only those payable with widowed mothers allowance.

To ask the Secretary of State for Social Security if he will set out in a table the national insurance contribution liability of (a) contracted-in employees through class 1, (b) contracted-out employees through class 1, (c) self-employed people through class 2 contributions, (d) self-employed people through class 4 contributions, showing separately the total effects at tax relief available on class 4, the amount due in the year, and the weekly equivalent for the latest available year for a single person earning, and assuming their income remains constant throughout the year, (i) quarter average male earnings, (ii) half average male earnings, (iii) average male earnings, (iv) one and a half average male earnings, (v) two times average male earnings, (vi) five times average male earnings.

The table shows class 1, 2 and 4 liability for 1989–90 under the headings requested With the exception of the position when earnings attract tax at the 40 per cent. rate, the contributions shown have been calculated by reference to the average earnings of all male employees as at April 1989 as given in "Social Security Statistics 1989". The same average has been used for both class 1 and class 2–4 calculations.




40 per cent. rate applies









Class 4 contributions

Total liability on profits
For the yearNil123·29564·73746·55746·55746·55746·55
Weekly equivalentn/a2·3710·8614·3614·3614·3614·36
Liability allowing for tax relief
For the yearn/a107·88494·14653·23597·24653·08597·24
Weekly equivalentn/a2·079·5012·5611·4812·5511·48