A pensioner who retires now, November 2007, on reaching the age of 60 years in the case of females and 61 years in the case of males, can take up paid employment again up to the age of 65 years without losing his/her national insurance (NI) pension if s/he does not earn more than the national minimum wage (NMW). And no NI contribution is paid on his/her earnings.

According to this year's Pre-Budget Document, page 44, Work Beyond The Pensionable Age, the government was proposing the removal of the NMW capping for pensioners in this age group on condition that on earnings above the NMW the pensioner would start paying NI contributions again.

In this year's budget speech, page 75, Anzjani, point three, it was announced that, as from January 2008, a pensioner in this age group would be able to work and earn as much as s/he wants to, without losing his/her pension rights.

Nothing was said in the budget speech about NI contributions in the case of a pensioner who would earn more than the NMW. Could the Department of Information clarify this point, please? I hope the new incentive introduced for pensioners to keep active and work longer will not have the disincentive of having to start paying NI contributions again, if the pensioner earns more than the NMW. Haven't present pensioners paid enough NI contributions?

It is more financially advantageous for the government and for pensioners alike to just tax all the earnings of a pensioner at his/her respective rate than introduce also payment of NI contributions again.

For sure, if the government intends to reintroduce the payment of NI contributions in the case of this group of working pensioners, there will be a lot of tax evasion. Pensioners would be tempted to declare only up to the NMW to avoid having to start paying NI contributions.

And what about those pensioners who decide to continue working beyond the age of 65 years? Today they do not pay any NI contributions, whatever they earn.

Ministry of Finance, please note and clarify.

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