JIB Combined Benefits Credit Scheme

IMPORTANT NOTICES

Changes to the NI Concession for Holiday Pay Schemes

Changes in legislation that governs the operation of the national insurance concession for holiday pay schemes in the construction industry have come into effect on 30 October 2007. The construction industry schemes have been granted a period of 5 years to October 2012 before the removal of the exemption.

The Statutory Instrument has introduced criteria, which must be met in order to continue to enjoy the N.I concession. The regulations state that the:

The secondary contributor (participating employer) is a person carrying on construction operations (within the meaning of section 74 of the Finance Act 2004)
The earner (employee) was personally engaged in such operations at the time that entitlement to that holiday pay accrued.

A guide is attachedwhich aims to establish eligibility of what s defined as construction operations.

In considering who can be included as “personally engaged” in construction operations, it appears that that the intention is to limit the concession to employees personally engaged to some extent in acceptable construction operations as detailed in subsection (2) of the Finance Act. Clerical and administrative staff should therefore be excluded.

As a general rule - employees who are involved in “out of scope” construction operations as well as “in scope” operations can continue to benefit from the NI concession.

Examples of this are as follows:

Those engaged in service and maintenance (out of scope) and also engaged in installation work (in scope) are covered whereas those solely undertaking service and maintenance will be excluded.
Those involved in prefabrication (out of scope) would be covered only if they were also involved in the installation or other in scope operations.
Delivery drivers would be out of scope.
Fire and Security – fire protection is in scope whilst security is out of scope – as long as employees are engaged in either solely fire protection or both, then they can be covered.
Datacoms – is in scope as long as the installation includes conduit or trunking.

What happens after 30 October 2007?

If employers/employees meet the criteria under “construction operations” then continue to operate the scheme for those employees who are personally engaged.
Employers should stop paying any further holiday money into the scheme for employees who are not personally engaged in construction operations. Benefit cover can be maintained by purchasing the “benefit only” weekly credit for any of these employees (if required).
Holiday pay processed through the payroll for those not personally engaged will become liable to national insurance from 30 October 2007 regardless as to whether it was accrued through the scheme prior to that date. Please make sure that a copy of this notice is passed to your payroll department.

Changes to JIB general rules

Please note that there have been some important changes in the 2007 JIB HANDBOOK to the purchasing of JIB Combined Credits where operatives are either ‘off sick’ or ‘do not qualify for a full Combined Benefit credit’. In future you will be requested to buy a ‘benefit only’ credit during these periods rather then not buying a credit at all. This will provide continuity of cover.

The relevant sections can be found in the JIB 2007 Handbook as follows:

Section 9 – General Rules (1.1) subsection (2) page 215

‘An operative must work 4 full days (or be absent with the employer’s permission) in any one week to qualify for a holiday credit. In the event that an operative does not qualify for the holiday credit, the employer must still purchase the welfare element of the benefit credit’

and

Section 9 – General Rules (1.1) subsection (7) page 216

‘Operatives who are absent from work through certified sickness or accident, will receive their holiday entitlement in accordance with the working time regulations 1998 (provided they have been employed by their current employer for a minimum of 4 weeks immediately prior to their incapacity), the employer must continue to purchase the welfare element of the benefit credit, during the period of certified sickness’.

Introduction

The Electrical Contracting Industry Benefits Agency (ECIBA) administers the JIB Combined Benefits Credit Scheme. The scheme offers employers and employees the opportunity to benefit from the saving of national insurance contributions on holiday pay. It also provides employers with the facility to provide their employees with a comprehensive suite of employee benefits as required under the terms and conditions of the JIB national working rules and what might be regarded as best industry practice.

Click on the headings below for more information.