Paying of National Insurance whilst overseas
As I am currently posted to an Embassy slot in slightly sunnier climes, and therefore working as a 'purple' rather than 'true blue' member of HM Forces, I came across the following in a recent copy of the army's Soldier magazine....
Working within the Defence Section at a British High Commission has certain benefits because I sometimes come across snippets of information that can be transposed across to the MOD.
A colleague in the Foreign and Commonwealth Office mentioned to me recently that if someone is living or working outside the UK for more than 52 weeks they can change their National Insurance contributions to Class 2 rates instead of Class 1, so paying only £2.05 a week regardless of their income.
I realise the army line is that tax and National Insurance are matters for the individual, but believe a response highlighting the pros and cons (if there are any) of officers and soldiers serving overseas taking advantage of this concession would be very helpful.
Name & Address supplied
The reply from a Brigadier in their equivalent of RAF PMA said:
Thank you for raising this issue. There is no concession for Service personnel abroad. Members of HM Forces are liable for Class 1 National Insurance Contributions (NICs) and this includes those serving abroad.
We also have reciprocal arrangements with the countries in which we work, which means that we don't pay the social security contributions that apply in those countries.
Paying NICs at the normal UK rate means that our NIC payments are not disrupted while we are serving abroad. This ensures that our rights to UK social service benefits, which are based on these contributions, are not adversely affected.
Different rules apply to civilian employees sent abroad.
While some may choose to pay a lower rate of NIC while based abroad, they may then find they are not eligible for the same level of benefits in the UK.
Am I missing something here, or are MOD personnel getting the smelly end of the stick yet again? I have conferred with my FCO contemporaries out here, and they've confirmed to me the points raised in the initial letter. Apparently, it is common knowledge within their organisation, and their HR staff take care of it all for them! Moreover, I am even informed (again by my FCO colleagues who are more in the know on this than I am) that paying Class 2 NICs has not affected their UK benefits in the slightest. Some FCO staff have done this for a number of years, and have now retired from their Service to return to the UK on full benefits.
Looks to me like one government department is earning it's IiP accreditation, whilst another doesn't appear interested. I'll leave you to judge for yourselves.
Bottom lip quivering here.
Stuckin