Grandparents who help look after their grandchildren could see their state pensions boosted, thanks to a government benefit that many people are unaware of.
As most parents will have already found, average childcare costs are rising, so it's no wonder that grandparents are offering their childcare services to help working parents juggle their work responsibilities and family life. But, as it's been reported that more than half of grandparents look after their grandchildren while the parents work, it's often asked whether the government should pay grandparents who provide childcare.
But, did you know that there is a little-known benefit offered by the government that could see grandparents get a pension boost of £1,000s if they help to look after their grandchildren? Here's everything you need to know about how the benefit works and who qualifies.
How does Grandparents' Childcare Credit work?
The grandparents' childcare credit, officially called Specified Adult Childcare Credit, essentially allows a parent who claims Child Benefit, to transfer National Insurance credits to an eligible family member who helps look after their child. The family member will get a Class 3 National Insurance credit for each week (or part week) they provide care for the child.
Receiving these credits can help to plug any gaps in their National Insurance record, and maximise how much state pension they receive.
However, various criteria and stipulations need to be met.
- You can only claim if you were looking after a child under the age of 12
- The parent(s) must be claiming Child Benefit - if not, there is no NI credit to be transferred
- There is only one credit per Child Benefit claim, regardless of the number of children. So if you looked after your child's two children, there is only one credit to transfer. But if you looked after your son's child and your daughter's child, for example, there would be two Child Benefit claims, and so two credits available to transfer.
- You can only claim the credit if you are under the state pension age, which is currently 66 years old
- Claims can be backdated to 6 April 2011
- The credits can only be transferred if the parent does not need them themselves, and if they agree to your application
- You must wait until 31 October after the end of the tax year you want to apply for.
What about other family members?
But while grandparents might be more likely to claim this credit, it's not exclusive to grandparents - there are other family members who may qualify, including:
- Mother or father of the child if they don't live with the child
- Great or great-great grandparent (as long as they were below state pension age when providing childcare)
- Aunt or Uncle
- Brother or sister (including half, step or adopted siblings)
- A current or previous spouse, partner or civil partner of anyone on the list, or their son or daughter, could also be eligible.
How to apply for Specified Adult Childcare Credits
To apply, you need to fill out a form called a CA9176. You can fill the form in online, or print it off and return it through the post. But you will need to have some information to hand before you begin.
The child's parent should check their National Insurance record and make sure they have the credits to transfer. You will also need to provide your personal details, those of the child you looked after, as well as details of when you looked after them, and details of the child's parent (who should be the Child Benefit recipient). Both the eligible family member and the Child Benefit recipient will need to sign the form.
If you already receive Child Benefit or already have a qualifying year of NI credits, then you shouldn't apply for the Specified Adult Childcare Credits.
When it comes to your own pension, make sure you know what happens to your pension when you are on maternity leave, and how you can maximise your own pension pot if you have take time out of work to raise your children.
