NIC: pennies from hell

Article Abstract:

Understanding of the low earnings limit (LEL) concept is critical to successful compliance with the UK government's national insurance contributions (NIC) requirements. The LEL is the most important component of the benefits side of the NIC program. By law, its weekly amount follows the rate of the weekly basic state pension. Paying one penny less than the LEL is a good way for companies to avoid liability or primary or secondary Class 1 contributions. Although their employees may be denied benefits at some future date as a result of this strategy, exploiting the LEL incorrectly may cause even more serious problems for employers. The 'penny trap' victimizes not only lowly-paid part-timers, but also company directors who have disproportionally low salaries to avoid liability.

Corporations, Corporations, British

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Keeping it in the family

Article Abstract:

Tunku Ya'acob successfully turned around the failing Malaysia Assurance Alliance into the fourth largest life assurance firm in Malaysia. Ya'acob took control of the company when he was just 28 years old. His father asked him to reorganize the company which was beset with fraud and bad management. He released Malaysia Assurance Alliance from the financial guarantees that former CEOs made to other firms. The financial guarantees, which totaled to 60 million ringgit, dwarfed the company's worth of 7 million ringgit. He talked to countless bankers and borrowers urging them to pay off their bank loans. He also took properties off from clients that were unsaleable and used delaying tactics to give borrowers time to pay off their loans.

Management, Insurance industry, Ya'acob, Tunku, Malaysia Assurance Alliance

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Mind the gap

Article Abstract:

British nationals who work in countries with which the UK has no social security treaty run the risk of reducing or even losing their benefits entitlements. Employment outside the European Economic Area and treaty countries may create gaps in the UK contribution records of expatriates because they are not considered as 'employed earners' while they are away from the UK. A possible consequence of this is the loss of Class 1 liability and the short-term benefit cover. Employees working overseas may eliminate the 'blank' years in their contribution records by paying Class 3 contributions. These voluntary contributions not only close the gap that some state pension plans cannot fill, but they also serve as a good investment vehicle.

Analysis, Laws, regulations and rules, Social policy, Employment abroad, Overseas employment

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