Social Security

Jim Shannon Excerpts

Tuesday 10th February 2026 Commons Chamber

[Dan Tomlinson]

The draft Child Benefit and Guardian’s Allowance Up-rating Order sets the rates for both child benefit and guardian’s allowance, and will ensure that those benefits, for which Treasury Ministers are responsible and which are delivered by His Majesty’s Revenue and Customs, are uprated by inflation in April 2026. The draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran’s Relief) Regulations 2026 set the rates of certain national insurance contributions classes, and the level of certain thresholds, for the 2026-27 tax year. The regulations also make provision for a Treasury grant to be paid into the national insurance fund if required for the same tax year, through a transfer of wider Government funds to the NIF, and extend the veterans employer national insurance relief for two years, until April 2028.

[Jim Shannon (Strangford) (DUP)]

I welcome what the Minister is saying, which is positive. This is a good step for guardians, carers and veterans. Sometimes people come to me and ask me questions. They say that they cannot get any help with the changes that have come in and how they are affected. When they are given more money, sometimes they fall into a higher tax bracket. Is help available for those who receive an increase in their guardian’s allowance, carer’s allowance or veteran’s allowance? We need to make sure that somebody can help them through the process. It is almost like walking through a muddy field: they just do not know where to go next.

[Dan Tomlinson]

The hon. Member is right: a range of reliefs in the national insurance system help particular groups, including young people and those who have served in our military. It is right that those reliefs are there, and I am glad that the Government took the decision to extend them by two years. The Government publish guidance on the way that the reliefs can be used. We aim to ensure that the guidance supports those who seek to employ young people and people who have served in the military, so that they are able to make employment decisions. Through the tax system, we want to support particular groups to be able to be employed. I thank the hon. Member for his question.

I turn to the detail of the Child Benefit and Guardian’s Allowance Up-rating Order 2026. As hon. Members will know, the Government are committed to delivering a welfare system that is fair for taxpayers while providing support for those who need it. These regulations ensure that the benefits for which Treasury Ministers are responsible, and which HMRC delivers, are uprated by inflation in April 2026. Child benefit and guardian’s allowance will increase by 3.8%, in line with the consumer prices index in the year to September 2025. Tax credits awards ended on 5 April 2025, so no changes to rates will be required.

I turn to the second set of regulations before us today. As announced at the Budget, the primary threshold and the lower profits limit threshold will be maintained at their current levels until April 2031. These regulations set the level for the 2026-27 tax year. Employees’ entitlement to contributory benefits, such as the state pension, is determined by their earnings being at or above the lower earnings limit. Self-employed people’s entitlement is determined by their earnings being at or above the small profits threshold.

These regulations uprate the LEL and the SPT. This is the usual process and maintains the real level of income where someone gains entitlement to contributory benefits. The upper earnings limit for employee NICs and the upper profits limit for self-employed NICs—the points at which the main rate falls to 2%—are aligned with the higher rate threshold for income tax. The thresholds will be maintained at their current levels, and these regulations set the levels for the 2026-27 tax year. As announced at the Budget last year, employer national insurance thresholds, including the secondary threshold, will also be maintained at their current levels.

We have already had a brief discussion about the employer NICs reliefs, including for under-21s, under-25 apprentices, veterans, and new employees in freeport and investment zones. The regulations that we are debating today keep the thresholds for those reliefs at their current levels. The regulations also make provision for the NICs relief for employers of veterans to be extended for two years until April 2028, during which time the Government will continue to consider the most effective way to support veterans into employment as part of the next spending review settlement.

Without these regulations, child benefit and guardian’s allowance would fall in real terms, and HMRC would be unable to collect NICs receipts. I hope that colleagues will join me in supporting them today.