To be entitled to a full basic State Pension at state pension
age, about 90 percent of the years, called the "requisite number of
years" in a customer’s working life need to be
‘qualifying years'. The rate of pension that can be awarded
is the percentage of requisite years that are qualifying years.
Qualifying years are earned through the NICs the customer pays or
is treated as paying while they are working, supplemented by
credits, or credited earnings, equal to the LEL in force at the
time. Most of these credits are linked to benefit entitlement and
are awarded by DWP but some, referred to as non-benefit credits,
are administered by IR. See
NIM41005.
HRP protects the pension entitlement of those customers who
are not working or whose wages are low while they are bringing up
children or caring for a person with a long term illness or
disability but who do not qualify for "credits" to give them
qualifying years.
HRP years do not give the customer more qualifying years.
Instead, they work by reducing the requisite number of years needed
for a full pension. This means that a year in which HRP is awarded
is not equivalent to a qualifying year and a year of contributions
and/or credits is likely to be more valuable than an HRP year.
When a customer is awarded basic State Pension, or
bereavement benefit is awarded based on their contribution record,
the number of requisite years are reduced by those years for which
HRP is available, and which are not qualifying years by reason of
contributions and credits.
The maximum number of HRP years that can be taken off the
requisite number of years is limited by legislation. The minimum
number of requisite years for a woman reaching State Pension age at
60 and a man at 65 is currently 20 years. This will rise to 22 for
men from 2010 and will gradually increase for women from that time
until it is the same for men and women when, by 2020, State Pension
age has been equalised at 65.
For impact on S2P, see
NIM41415.
