Employment Support Allowance and the Contribution Conditions

In order to obtain the contributory allowance you must meet both the first and the second contribution conditions.

Some young people under the age of 25 are exempt from the contribution conditions.

The first contribution condition.

In order to qualify for contribution based ESA you must have:

• actually paid Class 1 contributions in one of the three last complete tax years on earnings of 25 times the lower earnings limit for that particular year; or
• 25 Class 2 contributions in any of the three last complete tax years; or
• a mixture of Class 1 and Class 2 totalling 25 in any of the three last complete tax years.

The lower earnings limit for the last three tax years are-

2006-2007 = £84

2007-2008 = £87

2008-2009 = £89

Class 1 National Insurance contributions are paid by employed people as a percentage of their earnings. Class 2 NI contributions are paid by self-employed people at a standard weekly rate.

Exceptions to the first condition.

Contributions in any complete tax year will count if -

• you were entitled to Carers' Allowance or would have been getting it were it not "overlapped" by another benefit, for at least a week in the last complete tax year before the benefit year in which the claim for IB is made.
• you were being paid either the disability or severe disability elements within the working tax credits calculation for at least two years immediately prior to the first day of incapacity.
• you are entitled to be credited with earnings or contributions, or would be if an application was made, in respect of any week in any tax year preceding the relevant benefit year.
• you received Employment Support Allowance (based on contributions) in the last complete tax year before the benefit year in which the current period of incapacity began.

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The second contribution condition.

In addition to meeting the first condition you must also have paid (or have been treated as having paid) Class 1 or Class 2 contributions amounting to at least 50 times the lower earnings limit in each of the two relevant tax years.

The relevant tax years are those that precede the benefit year in which the claim is made. To make things a little more complex, the benefit year runs from the first Sunday in January whereas the tax year starts on April 6th. This means that the tax years 2004-2005 and 2005-2006 (for example) would be the two relevant tax years for a claim made in February 2007.

Contribution credits count as Class 1 credits and can be used to help you meet the second contribution condition. You are credited for each full week that you receive-

• incapacity benefit or
• statutory sick pay or
• severe disablement allowance or
• income support due to incapacity for work or
• maternity allowance or
• jobseeker's allowance or
• carer's allowance or
• adoption pay

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