Due to the complexity of the changes and their significant impact on self employed workers, the government has not set out a fixed timetable for the reforms.

Class 2 NICs currently provide the self-employed with access to a range of state benefits: the basic state pension, bereavement benefits, maternity allowance and contributory employment and support allowance.

Any changes to the current system would require a method of collection and attribution whereby employed individuals could build entitlement through Class 4 NICs, thereby creating a contributory benefit test.

This is also important for those self-employed people who pay a special rate of Class 2 – share fishermen and volunteer development workers – and other special groups such as examiners and ministers of religion.

The self-employed currently pay two classes of NICs: Class 2 and Class 4.

This consultation sets out the government’s proposal to introduce a contributory test based on profits into Class 4 NICs.

This means those with annual profits equal to or above a certain level could accrue qualifying years for entitlement to the State Pension and meet the new contributions tests for other contributory benefits through Class 4 NICs.

Class 2 NICs are currently flat-rate weekly contributions (£2.80 per week in 2015/16). They are liable to be paid for every week or partial week of self-employment in a tax year, if the person’s profits for that tax year equal or exceed the Small Profits Threshold (£5,965 in 2015/16).

Payment of Class 2 is voluntary for those with profits below this level. Class 2 NICs currently helps individuals build contributory benefit entitlement.

Class 4 NICs are paid by the self-employed on net profits that are subject to income tax. Class 4 contributions are payable at a rate of 9% on profits between the Lower Profits Limit (£8,060 in 2015/16) and Upper Profits Limit (UPL) (£42,385 in 2015/16) and 2% on profits above the UPL.

They do not currently provide entitlement to contributory benefits; Class 4 contributions were introduced so the self-employed would pay a fairer share of the costs associated with providing contributory benefits.

The government is seeking views from self-employed people, agents who act on the behalf of self-employed people and bodies that represent self-employed people.

The deadline for responses is 24 February 2016.

The consultation, Abolishing Class 2 National Insurance and introducing a contributory benefit test to Class 4 National Insurance for the self-employed, is available here https://www.gov.uk/government/consultations/consultation-on-abolishing-class-2-national-insurance-and-introducing-a-contributory-benefit-test-to-class-4-national-insurance-for-the-self-employed