§ Mr. Colvinasked the Secretary of State for Social Services if he will consider permitting the small earnings exemption from national insurance contributions to be allowed retrospectively so that refunds could be made by his Department to those people who have inadvertently overpaid.
§ Mrs. ChalkerException from liability for class 2 contributions may be granted if a person expects earnings from self-employment to be less than a prescribed sum (£1,250 for the tax year starting 6 April 1980). An application for exception may be backdated for a maximum period of 13 weeks.
This limited provision for backdating exceptions enables a self-employed person to know, at the time contributions become due, whether or not he is liable to pay them. If, instead of being determined on the basis of the expected level of profits, the question of liability depended on the actual profits, there would he no final determination until a year or two after that in which the contributions had been paid.
433WThis would leave the contributor and the Department in a state of uncertainty meanwhile and would create difficult administrative problems; extra civil servants would be needed. Furthermore, from the point of view of benefit entitlement, it would be undesirable to refund contributions which a person had in fact been able to pay, since these contributions bring a good return in future pension entitlement.