NIM07052 - Class 1 NICs: Payments made under employment legislation: Redundancy: Protective awards: NICs treatment

Sections 188-192 Trade Union and Labour Relations (Consolidation) Act 1992

Section 112(3)(c) Social Security Contributions & Benefits 1992

Regulation 2(b) Social Security (Contributions) (Employment Protection) Regulations 1977

Under the above regulation, an amount payable by way of remuneration under a protective award is:

• treated as earnings payable by the person liable to make such payment to the person entitled to receive it; and
• to be so payable for the period specified by the employment tribunal.

The gross amount of the protective award should be taken into account when assessing the NICs liability.

For details about:

• what a protective award is, see NIM07050
• the earnings period to use in calculating the amount of Class 1 NICs, see NIM07060.