Money Matters for Women: Women Excluded from National Insurance

Author(s): Naomi McKay, Eithne McLaughlin and Janet Trewsdale
Commissioned by: Equal Opportunities Commission for N Ireland
Document Type: Report
Year: 1999
Publisher: Equal Opportunities Commission for Northern Ireland
Place of Publication: Belfast
ISBN: 0 906646 83 9
Subject Area(s): Employment, Earnings
Client Group(s) : Women

Abbreviations: NI - Northern Ireland, LEL - Lower Earnings Limit, UK - United Kingdom, GB - Great Britain

Background to the Research

  • This report examines how many people in NI are in work but earning less than the weekly LEL. LEL is the threshold below which national insurance contributions are not paid and therefore, entitlement to a number of contributory benefits is effectively denied or severely restricted. The study has been stimulated by two factors:
    • The new Labour Government's review of the tax/benefit system and the possibility of changes to the national insurance system;
    • Long standing equality issues surrounding the national insurance system.
  • Very little information has been known about employees earning below the weekly threshold for payment of national insurance contributions. The main source of information on earnings - the New Earnings Survey - does not include these employees. The LEL threshold currently stands at £64 (1998-1999). As in the rest of the UK, the vast majority of employees earning less than the LEL in NI are women.

Research Approach

  • The analysis reported here is based on the Labour Force Survey over the period 1993 to 1996 and examines the characteristics of male and female employees whose earnings are below the LEL. In addition, the report includes comparisons of those earning less than the LEL in NI with their counterparts in GB.

Main Findings

  • The report suggests, inter alia, that there are two main differences between NI and GB:
    • Employees earning below the LEL work longer hours in NI than GB and
    • Men earning less than LEL in GB are more likely to have higher qualifications than men in NI.
  • The former means that the impact of the National Minimum Wage, in terms of the proportions of employees who earn less than the LEL, will be significantly different in NI than in GB, and will require separate estimations. In addition, the effect of raising the LEL to £81 will have a much greater effect in NI than GB, and this too merits separate estimation.

Conclusions

  • The analysis provides the first detailed information on men and women who earn less than the LEL in NI. It underlines the very great difference between men and women in terms of 'membership' of the national insurance system and, therefore, access to national insurance benefits. The report also demonstrates the need for a major rethink of how part-time workers can be provided with social protection on a par with that offered to other workers. Since the vast majority of these workers are women, and often women whose employment has been affected by caring duties, their social protection is a major equality issue. It is worth noting that this research publication was initiated before the report of the Low Pay Commission and therefore does not attempt to estimate the impact of the minimum wage on those earning below the LEL.
 

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