23 February 2022

Our GIP policies automatically cover the National Insurance increase

Where your client has our group income protection policy and chosen to also cover their National Insurance (NI) contributions on benefit payments, our policy will automatically be adjusted for the increase from 6 April 2022. The cover will also include the new Health and Social Care Levy from 6 April 2023, for all new and existing clients.

The premium rate will not be affected by this National Insurance change, whilst the policy is within its rate guarantee period. If we’ve agreed to calculate premiums using a benefit based unit rate or premium rates, the premium will increase at the next account to reflect the small increase in cover.

The government recently announced that it will raise additional money from employers, employees and the self-employed; to directly support the NHS and social care in the UK.*

For employers, this will be collected through the following changes:

  • From 6 April 2022 NI rates will increase. Employers will pay an additional 1.25%.
  • From 6 April 2023 the government will introduce a new Health and Social Care Levy and return NI contributions to the 2021 to 2022 tax year levels. The new levy will share the same reliefs and thresholds as NI. The government will also start collecting levy payments in respect of employees who no longer pay NI because they’ve reached their state pension age

For new claims, the NI rates and thresholds that apply when an employee goes absent will apply throughout the claim. If the claim is already in payment, we will not apply any adjustments in line with NI rate and threshold changes. 

Our Distribution Director, Colin Fitzgerald, had this to say:

“ While the impact on employees has been well documented since the government’s announcement of the change to NI contributions and the introduction of the Health and Social Care levy in 2023, the impact on employers arguably hasn’t. With this announcement, we hope to reassure our clients – current and future – and intermediary partners of our approach, in that the new levy will be automatically accounted for.”

To find out more about the changes, take a look at our useful guide (379kb pdf).