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State pension payments can be protected through National Insurance (NI) credits which can be awarded when a person cannot build up their NI through employment. National Insurance credit rules were updated in 2011 in a bid to help families with their childcare obligations.
The Government details people may be eligible to receive NI credits if they’re a grandparent, or other family member, who cares for a child under 12, usually while their parent (or main carer) is working.
These credits must be applied for and since March 2020, recipients have been able to receive them for childcare provided over the telephone or video.
As it stands, it is still possible to apply for NI credits for the 2019 to 2021 financial years.
Additionally, “specified adult childcare credits” are available, which work by transferring the NI credit attached to child benefit from the original recipient to a family member who is providing care for a related child under 12.
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Utilising these credits could prove to be especially worthwhile, as payments can be backdated by many years, which may result in large payouts.
Kay Ingram, a Director of Public Policy at LEBC, explained how this works in practice: “Where childcare has been given for some time it is possible for Specified Adult Childcare Credits to be backdated up to 2011.
“This could mean that if childcare has been provided for that time up to nine years’ credits could be available and that would be worth a state pension of up to £2,342 per year payable for life from State pension age.
“During lockdown many relatives have been unable to see their families, but the Government has confirmed that carers who have continued to provide childcare remotely will still qualify for these credits.
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“Understanding who in the family can most benefit from state pension credits is vital in ensuring that the credits really do buy extra pension and are not wasted by the credit being given to someone who will get a full state pension anyway.”
It should be noted that there are stringent rules on specified adult childcare credit eligibility, and the Government warns people should not apply if:
- They already have a qualifying year of National Insurance – usually because they work or receive other NI credits (NI records can be checked on through the Government’s website)
- They’re receiving child benefit for the child – they’ll already get parent’s credits automatically
- They’re the partner of, and live with, a child benefit recipient and they want to transfer the parent’s credits from a spouse or partner to themselves – they can apply to do this through the CF411A form
The Government details people can apply for specified adult childcare credits if:
- They are a grandparent, or other family member caring for a child under 12
- They were over 16, and under state pension age when they cared for the child
- They are ordinarily resident in the United Kingdom, meaning England, Scotland, Wales and Northern Ireland, but not the Channel Islands or the Isle of Man
- The child’s parent (or main carer) is entitled to child benefit and has a qualifying year for NI without needing the parent’s class 3 NI credits which they receive automatically from child benefit
- The child’s parent (or main carer) agrees to the application by countersigning the form to confirm that: the claimant cared for their child for the period stated and they can have the class three NI credit for the period stated
To apply for specified adult childcare credits, claimants will need to complete a specific application form.
The form will require personal details of the applicant and family member’s involved along with declarations from the applicant and parents.
It should be noted the Government cannot accept applications for a particular tax year until the following October at the earliest.
While these rules can be confusing, the Government has a dedicated specified adult childcare credits helpline available for assistance.
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