How does National Insurance affect your benefits?
When you make National Insurance contributions, you build up your entitlement to what are known as 'contributory benefits'.
- Unemployment benefits, in the form of Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA)
- Maternity Allowance, if you don't qualify for statutory maternity pay
- Bereavement benefits (Bereavement Allowance, Bereavement Payment and Widowed Parent's Allowance)
- Incapacity Benefit, if you face long-term unemployment because of illness or disability.
Some benefits depend on making National Insurance contributions of a specific class. For example, you won't be able claim contribution-based Jobseeker's Allowance if you haven't been making employee-based National Insurance contributions.
See below for an at-a-glance view.
Find out more: National Insurance rates – work out how much you need to pay to be entitled to these benefits.
How National Insurance affects Jobseeker’s Allowance (JSA)
If you are unemployed and looking for work, you may be able to claim Jobseeker’s Allowance (JSA), and the amount you receive will depend on your National Insurance contributions.
To claim any type of JSA, you must meet the minimum criteria, namely:
- be over 18 years old
- not working full-time (less than 16 hours a week)
- actively looking for work
- not in full-time education
- not claiming Income Support.
There are two types of JSA that you qualify for by paying into National Insurance: contribution-based JSA and new-style JSA.
If you don't meet the minimum National Insurance contributions for these, you may need to apply for income-based JSA instead.
You can read about each type below.
You should be eligible for contribution-based JSA if you have paid or been credited with the minimum National Insurance contributions in the past two financial years.
You'll only qualify for contribution-based JSA if you have paid enough employee National Insurance contributions (Class 1), which normally means over the two tax years before the benefit year you are claiming in. Note that self-employed (i.e. Class 2 or Class 4) contributions will not entitle you to this benefit.
Confusingly, the benefit year begins on the first Sunday in January, so your qualifying period may be further ago than you think. For example, if you made a claim on 15 June 2021, you need to have made enough NI contributions in the 2018-19 tax year, and the 2019-20 tax year.
This form of unemployment benefit will last up to six months.
If you can claim this type of JSA, it is likely to be the best option, as your savings, capital and partner's income won't affect your entitlement to claim.
But you cannot claim this type of JSA if you haven't made the minimum contributions to National Insurance, have claimed it in the past two years, or are eligible for Universal Credit.
If you are entitled to apply for Universal Credit, and have made the minimum National Insurance contributions, you have to apply for new-style JSA instead of contribution-based JSA.
It pays the same as contribution-based JSA and lasts for the same time period.
You can apply for this on its own, or in combination with Universal Credit. If you qualify for both, the value of your JSA will be deducted from your Universal Credit - meaning you won't end up any better off.
If you don't qualify for new-style JSA or contribution-based JSA, you may need to apply for income-based JSA.
To qualify, you must have capital of less than £16,000 - including savings or cash assets, and those of your partner. You also cannot claim Income Support, income-related ESA or Pension Credit at the same time.
National Insurance and Employment and Support Allowance (ESA)
If you're ill or disabled, you may qualify for Employment and Support allowance. The qualifying conditions are broadly similar to Jobseeker's Allowance - you can qualify for contribution-based ESA, or the new style ESA if you're in a full-service Universal Credit area.
You can't claim ESA and JSA at the same time, or if you are above state pension age.
To qualify for the new style ESA you'll need to be entitled to apply for Universal Credit.
Changes to JSA and ESA benefits
As Universal Credit is phased in, income-based and contribution-based JSA and ESA that depend on your National Insurance contributions are being phased out. These benefits are being replaced by new-style JSA and ESA.
The changes are being rolled out alongside Universal Credit, and will apply to people living in full-service Universal Credit areas.
Universal Credit will also replace Income Support, Housing Benefit, Child Tax Credit and Working Tax Credit.
Find out more: what is Universal Credit?
National Insurance entitlement to bereavement support payment
The bereavement support payment has replaced bereavement allowance, widow's pension, bereaved payment and widowed parent's allowance.
You may be eligible to receive Bereavement Support Payments if your spouse or civil partner died in the last 21 months; to get the full amount, you must claim within three months of their death.
To be eligible, your partner must:
- have paid National Insurance contributions for at least 25 weeks in one tax year since 6 April 1975
- have died because of an accident or disease caused by work.
When they died you must have been:
- under state pension age
- living in the UK or a country that pays bereavement benefits.
You cannot claim bereavement support if you're in prison.
You'll get a first payment of either £3,500 or £2,500, and then up to 18 monthly payments of either £350 or £100. If you claim child benefit you'll get the higher rate. If you don't claim child benefit, you'll get the lower rate - unless you were pregnant when your partner died.
The payments won't affect any other benefits for a year after your first payment. After this time, the payments could affect how much you receive from other benefits. You should tell your benefits office when you start receiving the bereavement support payment.
The government guide has more details on how to claim.
If your spouse or civil partner died before 6 April 2017, you may be able to get widowed parent's allowance instead.
Find out more: widow's pension and bereavement allowance