Changes to National Insurance Contributions (NICs) from April 2022
The Government has announced that NICs will increase by 1.25% for one year from April 2022 to help fund social care in England.
From April 2023 NICs will change back to the current rate with the additional 1.25% being collected through the new Health and Social Care (H&SC) levy.
The change will impact GIP policies where NICs are insured. We will cover the higher rate of NICs from April 2022 and the new H&SC levy from April 2023.
Unit rated policies within the rate guarantee
The change to NICs will not trigger a rate review.
For most GIP policies the premium is expressed as a rate of total salary roll which means there will be no change to the annual premium as a result of the increase in NICs.
For policies where the premium is expressed as a rate of insured benefit there will be an increase in premium as the insured benefit will increase. Adjustments to premium will take place at the end of the policy year.
Rate reviews and new policies going on risk on or after 6th April 2022
The unit rate quoted at the next rate review will take account of the increased NICs or H&SC levy covered. This will also be the case for quotes for policies going on risk from 6th April 2022.
Single premium costed policies
For these policies we use a rate table to calculate the premium for each member and then add them together. As the premium rate is applied to the insured benefit there will be an increase in premium resulting from the higher cover provided. Adjustments to premium will take place at the end of the policy year.
Claims in payment before 6th April 2022
We provide cover for the NICs payable on the basic benefit at the start of the claim. As a result there will be no change to the benefit payable for:
New claims from 6th April 2022
For claims where the deferred period ends on or after 6th April 2022 the benefit will take account of the increased NICs or H&SC levy.