We are often asked to comment on the state benefits you will or wont be able to claim if you are self-employed and pay the basic Class 2, and the earnings related Class 4 contributions.
Class 2 contributions will qualify you for most of the benefits that an employed person can claim. (Employed persons pay Class 1 contributions.) The two main exceptions are earnings related state pension and contribution-based Jobseekers allowance.
If you are self-employed and are unable to work due to illness you should be able to claim incapacity benefit. However you may disqualify yourself if you make occasional visits to your workplace. You may also have difficulties if you work from home, proving that you do no work.
Class 4 contributions do not count towards any benefits (in other words, its just tax).
Two useful points. You may be able to combine your contribution record with your husband’s, wife’s or civil partner’s contribution record if:
- you are widowed
- You are the surviving partner of a civil partner who has died
- you are divorced
- your civil partnership has been dissolved
The number of years contributions required to qualify you to a basic state retirement pension is 30 years if you are due to reach retirement age on or after 6 April 2010.