Hi everyone,

Just a quick question with regards to the minimum wage being included into the state pension.

I have a friend that is working for a small restaurant and she works part-time with minimum wage. I think she only works 24 hours a week.

Question is : is she going to be included into the state pension as she has worked for about 1 year??

They are paying her with pay-slip but I am not an expert into all these.

Many thanks,

DD

You'll find info and a helpline number here

https://www.gov.uk/new-state-pension

That depends on whether the minimum NI contributions are made. The minimum is based on earnings per week/year rather than an hourly rate.

Hi Ericsbrother,

As far as I could see on her payslip is 0.00.. Would her company pay for this?? or it is down to her??

Many thanks for both of you replying.

DD

How much does she earn a week/month/year? If she doesnt earn enough to pay the contributions she doesnt get the pension. It would be wise to phone the tax credits helpline and see if she is entitled to claim TC's and also ask about the contirbutions as well. It may be that her employer isnt declaring her pay to HMRC/DWP to avoid paying the employer NI contributions and to save themselves the cost of deducting the governemts share.

What do the pay slips show regarding her NI number, tax code and deductions from pay? that is the minimal information they should have even if they arent making deductions because none are due.

To count as a qualifying year you have to be earning at least £5772 this tax year(the amount was lower in previous years).

She also may have gained HRP and/or ni credits, both which would credit her with qualifying years.

Hi eircsbrother,

Many thanks to all of you for the time taken...

I have asked her the P60 to see if there is anything else she would have about NI.......and it shows that this employment total for year is £6200.

Under the NI contributions column there is:

- A under NIC table letter

- Earnings at Lower Earning Limit (LEL) - £4730

- Earnings above LEL - £1470....

That is it....

Turning on the pay slip - there is £0.00 on NI and £0.00 on Income tax. The Tax code used for the Year I believe is 1000L - whatever that means...

If there is any plain explanation would be very welcomed.

Thank you kindly,

dd

Tax code 1000L means standard personal allowance of £10,000. If she's earned £6,200 this will count as a qualifying year for state pension purposes. Why doesnt she ask for a state pension forcast?

Tax code 1000L means standard personal allowance of £10,000. If she's earned £6,200 this will count as a qualifying year for state pension purposes. Why doesnt she ask for a state pension forcast?

Hi Goodatresearch,

Many thanks.

Could you please let me know if she has to ask her employer or the TAX Office about the Pension Forecast??

dd

Hello there.

You can ask the Benefits Agency about your pension entitlement online, I hope you find the information you need.

https://www.gov.uk/state-pension-statement

HB

Hi Honeybee,

Thank you and will tell her to check it out.

dd

she should have paid some NI contributions on the £1470 which would add up to about £150 but as I said, it depends on how pay is calculated so follow honeybee's suggestion and ask DWP about both contributions and forecast. If she is claiming tax credits it will all be done by DWP anyway.

she should have paid some NI contributions on the £1470 which would add up to about £150 but as I said, it depends on how pay is calculated so follow honeybee's suggestion and ask DWP about both contributions and forecast. If she is claiming tax credits it will all be done by DWP anyway.

Hi Ericsbrother,

Thank you for the tip.

Sorry to reply a bit late but I had to ask her a few more details....

When you said that she needs to pay NI on her £1470 ...is it her to pay the £150 or her employer for her??

With regards to the tax credits she is not claiming them....although I really have to gather more info on it as I have not got a clue into all these.

I have asked her about any tips she might be getting and told me that the boss gets all the tips and probably he is paying her the wages from the tips? Is it not something realty bad that she has to tell customers that they are getting the tips just to keep the job going???

For me it is something really strange but I don't have a say into this.

Many thanks for that,

dd

If she isn't self employed than its the employer who should deduct the no from her wage.

At one time restaurants/pubs used tips to make salaries up to minimum wage. Not sure what minimum wage is now, but for example, if minimum wage was £6.33 and there was 33p in tips, the employer would get away with paying £6 from their own pocket and use the 33p to bring the hourly rate up to the minimum wage. They cannot legally do that any more.

If she isn't self employed than its the employer who should deduct the no from her wage.

 

At one time restaurants/pubs used tips to make salaries up to minimum wage. Not sure what minimum wage is now, but for example, if minimum wage was £6.33 and there was 33p in tips, the employer would get away with paying £6 from their own pocket and use the 33p to bring the hourly rate up to the minimum wage. They cannot legally do that any more.

Hi Goodatresearch,

She is not self employed. - and that is a bit strange. I know the employer is the one to pay for her NI and others and that it seemed strange to me either.

With regards to the tips I do not know much but I told her to check if there is anything she might get extra as she did not get anything.

Anyhoo, is she going to pay for her pension contribution for the year worked if she finds out that the employer didn't pay for her?? or she needs to go to her employer and ask them to pay for her once she can show them the Pension forecast Statement for the year and 1/2 worked with them??

Thanks

If the pay is above the threshold both she and her employer pay NI contributions and they are deducted from her gross pay. This should be indicated on her pay slip. The more you come back to us the more it looks as though her employer is not either making the correct calculations or providing an accurate pay slip, both of which as offences. This is another reason as to why she should pick up the phone and ask the DWP about her current status and projected pension.

As you say, it is possible the boss it netting out her pay from the tips. There is nothing to make him pay the tips to his staff but they must be accounted for in his accounts and I doubt if this is happening. Might seem a bit of a victimless crime, robbing the taxman, but what do you think yould happen if she had an accident at work, do you think that someone who is a tax dodger and doesnt declare his employees to the authorities is going to have proper insurance? Might need to call the HMRC tax helpline after speaking to the DWP.

An employer can pocket tips, disgusting but true. However since 2008 they cannot use tips to make up a salary to minimum Wage. On the salary quoted it should count as a qualifying years re pension. From what had been said, all sounds a little dodgy. This should be discussed with HMRC without delay.