NIM35002 - Special Cases: Share fishermen: Historical background
Regulation 125 of the Social Security Contributions Regulations 2001 (SI 2001 No. 1004)
Section 16 of the Social Security Act 1990
Employed earners
When the NI scheme was introduced in 1948 all share fishermen were classed as employed earners. As employed earners share fishermen paid Class 1 NICs which entitled them to the full range of benefits, including Industrial Injuries Benefit (IIB), and Unemployment Benefit (UB) and the later Contributions-based Jobseeker’s Allowance.
Self-employed
From April 1975, share fishermen are classed as self-employed because their conditions of service are more like self-employment. However, because share fishermen had previously been treated as employed earners, with entitlement to IIB and UB, they are allowed to pay a special higher rate of Class 2 NICs to retain entitlement to those benefits. This concession also recognises the arduous and hazardous nature of their occupation.
Requirement to pay for IIB cover removed
Section 16 of the Social Security Act 1990 allows the costs of IIB to be met from the Consolidated Fund rather than the NI fund. Because of this legislative change, it was decided that:
- from 6 April 1991, the special Class 2 NIC would no longer include an additional amount for IIB cover but because of the unique nature of their employment, share fishermen would still retain their entitlement to IIB; and
- share fishermen would be invited in October 1991 to claim a refund of that part of the special Class 2 NIC paid for IIB cover between 6 April 1975 and 5 April 1991.
Share fishermen were identified by NIRS and Refunds Group in the former CA invited contributors to claim a refund.