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Old Sep 1st 2017, 3:39 am   #1
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Question UK State Pension, Voluntary Contributions, Classes and the effect on Australian Super

I've been looking through these forums for info regarding the UK State Pension and voluntary contributions while abroad, but I still have some questions. I hope to contact HMRC soon to get answers to most of them but perhaps if any of you guys have any knowledge / experience to add it would be appreciated. I'll update this thread also with what I find out from HMRC.

I moved to Australia in 2004 and have been paying voluntary Class 3 contributions. I recently found out that I can pay Class 2 contributions instead at a much cheaper rate. This isn't made clear on the HMRC website. The only difference is with Class 3 you get Contribution-based Employment and Support Allowance.

I also found out that Class 2 is being scrapped in 2018 for a modified Class 4, however from what I understand from this document...

The abolition of Class 2 National Insurance

...we will not be entitled to pay voluntary Class 4, and would have to pay Class 3 instead. I will hopefully confirm this.

So my questions are...

1. What happens when Class 2 is abolished?
2. Is it possible to get a refund for previous Class 3 contributions to make them Class 2? (I highly doubt it).
3. What effect does transferring state pension cash from the UK have on Australian superannuation?
4. Is it worth paying voluntary contributions if I am not planning to return to the UK to live?
5. Can I get a lump sum now if I decide to stop paying NI?

If anyone has anything to add that would be great!

Thanks.
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Old Sep 2nd 2017, 12:43 am   #2
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Default Re: UK State Pension, Voluntary Contributions, Classes and the effect on Australian S

No you can not change class 3 contributions already paid. I tried this last week with no joy
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Old Sep 2nd 2017, 5:32 am   #3
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Default Re: UK State Pension, Voluntary Contributions, Classes and the effect on Australian S

Quote:
Originally Posted by Alexwood23 View Post
No you can not change class 3 contributions already paid. I tried this last week with no joy
Your UK state pension and your Aus super are completely separate and neither has any effect on the other.
UK pension is not means-tested so you just receive your entitlement alongside your Super.

However both UK pension and your Super can affect any eligibility for an Australian state pension.

You can't transfer your UK pension, it stays in the UK and you claim it from there, and no you can't get a lump sum payout.
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Old Sep 7th 2017, 8:35 am   #4
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Default Re: UK State Pension, Voluntary Contributions, Classes and the effect on Australian S

Thanks for the advice you guys.

I rang HMRC and they currently have no information as to what will happen when the Class 2 contributions are abolished. I assume everyone paying Class 2 voluntary contributions will get notified.

I also spoke to the Pension Service who informed me that the law changed in April 2016 such that if I pass away my wife will not be entitled to any of my state pension! This came as a bit of a shock and doesn't seem fair on her since we are both earning.
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