NIM41010 - Credits: overview: what are National Insurance credits

Regulation 3 of the Social Security Credits Regulations 1975 (SI 1975 No.556)

See the general provisions relating to the crediting of National Insurance contributions (NICs) and earnings. The term National Insurance (NI) credits is commonly used to describe credited contributions or earnings.

DWP are responsible for the policy and legislation on credits issues.

NI credits equivalent to a Class 1 credited earnings (which replaced Class 1 credits from 6 April 1987) or Class 3 contributions are a substitute for NICs. They may be awarded to people regardless of whether they are liable or entitled to pay either Class 1 or Class 2 NICs. The NI credits ensure that the person to whom they are awarded satisfies the conditions for entitlement to various benefits if they have not paid sufficient NICs.

Credits are not normally available to married women with a valid married woman’s non-paying or reduced rate election. The exceptions are Class 3 starter credits and credits awarded for periods of imprisonment that resulted from a conviction (or convictions) which were subsequently quashed by a Crown Court, the Court of Appeal or High Court of Justiciary. For more information on stayed credits see NIM41240

Widows with a non-paying or reduced rate election are entitled to credits.

Credits may be awarded because a person is entitled to certain social security benefits, such as Employment & Support Allowance, Jobseeker’s Allowance, Income Support or Carer’s Allowance. In addition, credits may be linked to the payment of Child Benefit or Tax Credits. Credits may also be awarded for other reasons, such as when the individual has caring responsibilities, periods of jury service or periods of Approved Training.

HMRC refer to ‘non benefit credits’ to describe credits that rely on separate clerical application processes, or automated systems, not linked to any DWP process. HMRC administers some of these processes on behalf of DWP.

Whilst there is no legislative difference between ‘benefit’ and ‘non benefit’ credits, we have used the description ‘non benefit’ to describe those credits that HMRC is responsible for administering.

For a list of credits administered by HMRC and available before 6 April 1975 see NIM41105.

For a list of credits administered by HMRC and available since 6 April 1975 see NIM41205.