Gender Recognition - Frequently Asked Questions


Q: How are my employee’s National Insurance (NI) contributions affected if they get a full Gender Recognition Certificate?

A: Transsexual men and women who get a full Gender Recognition Certificate will pay NI contributions on the basis of their acquired gender. For example, a transsexual female who gets a full Gender Recognition Certificate will pay NI contributions up to the State Pension age for women, which is currently age 60. A transsexual male who gets a full Gender Recognition Certificate will pay NI contributions up to the State Pension age for men, which is 65.

Q: Will the amount of National Insurance (NI) contributions I deduct from my employee be affected if they get a full Gender Recognition Certificate?

It will depend on your employees acquired gender and their Date of Birth.

Acquired Gender is Male

A: Ages 16 - 59 inclusive:

Class 1 contributions will be payable by both you and your employee on all earnings above the Earnings Threshold (ET).

A: Ages 60-65:

Your employee will become liable to pay Class 1 contributions on earnings above the Earnings Threshold (ET) from the ‘date of issue’ quoted on their Gender Recognition Certificate until they reach age 65. If you are paying ‘employer only’ (Category C) NI contributions you must stop paying these from the date earnings are next paid to your employee and start deducting NI at the appropriate rate.

A: Over age 65:

Your employee will not be liable to pay Class 1 contributions but you will need to continue paying ‘employer only’ (Category C) Class 1 National Insurance on earnings above the Earnings Threshold (ET).

Acquired Gender is Female

A: Ages 16 - 59 inclusive:

Class 1 contributions will be payable by both you and your employee on earnings above the Earnings Threshold (ET).

A: Age 60 and over:

Your employee will no longer be liable to pay Class 1 contributions from the 'date of issue' quoted on the full Gender Recognition Certificate and you should not deduct any Class 1 contributions from this date. You will be liable to pay ‘employer only’ (Category C) Class 1 contributions on your employee’s earnings above the Earnings Threshold (ET). The deduction of 'employer only' (Category C) contributions should commence on the next date earnings are paid after the 'date of issue' quoted on the full Gender Recognition Certificate.

Q: I hold a CA4139, CF383 or a CF380A (Certificate of Election/ Reduced Liability) certificate for my employee, are these certificates still valid if my employee holds a full Gender Recognition Certificate?

A: The certificates will not be valid from the ‘date of issue’ that is quoted on your employees Gender Recognition Certificate.

Q: If my employee has a full Gender Recognition Certificate and I have deducted the wrong amount of National Insurance Contributions, what should I do?

A: You can make an in-year adjustment if you have not already submitted your P14s to the Inland Revenue. For guidance on how to do this, see leaflet CWG2, The Employer’s Further Guide to PAYE and NICs. If you have already submitted your P14s and an in-year adjustment is not possible, the action to take depends upon whether your employee has overpaid or underpaid contributions. If the former, your employee should write to Inland Revenue, SSD, Prudhoe House, BP9207, Benton Park View, Newcastle upon Tyne, NE98 1ZZ. If contributions have been underpaid, contact IR at 0845 7143413.

Q: Will the amount of tax I deduct from my employee be affected if they have a full Gender Recognition Certificate?

A: The amount of tax paid by a married person is likely to be affected, as that person will be required to end their marriage in order to get a full Gender Recognition Certificate. If they end their marriage, the amount of Income Tax they pay may be affected.

If a person is single and gets a full Gender Recognition Certificate it will have no effect on their tax.
You should continue to deduct tax at the rate applicable to your employees tax code. If your employee’s tax is to be amended Inland Revenue will issue an amended tax code.

Q: Will getting a full Gender Recognition Certificate affect the Working Tax Credits I pay to my employee?

A: A person’s right to tax credits may change when they obtain a full Gender Recognition Certificate. The Tax Credit Office will notify you if the payments you make are to change or cease.

Q: My employee is a member of my Contracted out Salary Related Pension Scheme will there be any impact on their contracted out pension if they get a full Gender Recognition Certificate?

A: The Guaranteed Minimum Pension (GMP) rights that a person has built up between 1978 and 1997 would have been worked out on the basis of their birth gender rather than their acquired gender. There will be no impact on the GMP built up but the pensionable age for payment of the GMP, which are 60 for women and 65 for men will change. Following receipt of a full Gender Recognition Certificate, a person will claim their GMP at the GMP pensionable age appropriate to their acquired gender. Any pension rights built up in a Contracted out Salary Related scheme since 5 April 1997 will not be affected because since that date rights for men and women have built up at the same rate.

If the pension age for getting other benefits in their occupational pension scheme is different, they will get those benefits at the different age.

Q: Can a transsexual female who gets a full Gender Recognition Certificate have her GMP backdated to her 60th birthday?

A: No. Any entitlement to a GMP will only start from the date that the full Gender Recognition Certificate was awarded.

Q: Will a transsexual male between age 60 – 65 who gets a full Gender Recognition Certificate continue to receive his GMP?

A: No. Any entitlement to a GMP would cease from the date that the full Gender Recognition Certificate is awarded. The GMP will become payable when the person reaches age 65.

Q: If my employee is over pensionable age - will the value of their GMP be affected?

A: No. The GMP is part of their occupational pension and is based on their pensionable service built up before 6th April 1997. The value of the GMP will not, therefore, be affected if a person gets a full Gender Recognition Certificate.

Q: Can a person continue to receive a survivor GMP benefit from their deceased spouse if they get a Gender Recognition Certificate?

A: Yes. As the survivor benefit is based on their deceased spouse’s previous earnings, their right to the amount of benefit will not change. However, the person will be required to meet the eligibility conditions such as continuing to have an underlying entitlement to certain social security benefits.

These are:

  • State Pension based on their late husband’s rights;
  • Widowed Parent’s Allowance; or
  • Bereavement Allowance.

These entitlements could come to an end, however, if the person remarries or lives with someone as husband and wife or as a civil partner.

Q: If my employee is a member of a Contracted-out Money Purchase (COMP) scheme, Appropriate Personal Pension (APP) scheme or Stakeholder Pension scheme will there be any impacts of getting a full Gender Recognition Certificate?

A: Most people who contract out of the additional State Pension by joining either a COMP scheme or an APP scheme (including a Stakeholder Pension scheme) will have a pension fund made up of both protected rights (rights made up mainly from the rebate on NI contributions and it’s investment return) and non-protected rights.

At retirement, the existing rules require that annuities (pensions payable for life) purchased with the protected rights must be the same for both men and women. Therefore, the receipt of a Gender Recognition Certificate will have no impact on an annuity purchased using the protected rights.

However, this requirement does not apply to the non-protected rights (rights made up mainly from the investment of payments made by the employee and/or his or her employer). Members who have accrued non protected rights and have not purchased an annuity before they get a full Gender Recognition Certificate will be impacted. This means that annuities purchased with the non-protected rights are in most cases higher for men because women, on average, live longer and their annuities are likely to have to pay out for longer.

Those people who have already purchased an annuity before they get a full Gender Recognition Certificate will not be affected.

 

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