Martin Lewis is urging grandparents who look after grandchildren while their parents are at work to claim a “little known benefit” which could add thousands of pounds to State Pension payments. Specified Adult Childcare credits work by transferring the National Insurance credit attached to Child Benefit from the Child Benefit recipient to a family member who is providing care for a related child under 12.
The founder of MoneySavingExpert.com took to social media and urged his 1.8 million Twitter followers to share his quick summary and link to the benefit. Martin posted: “There's a little known benefit for grandparents who look after their grandchildren while parents work. If you're a parent of an under 12, if your parents (ie child’s grandparent) do childcare so you can work, you can apply to get them ‘Specified Adult Childcare Credit’.
“This means they get the National Insurance years that normally go to a parent who is off work looking after children (as you're working you'll usually be getting from work). This can add £1,000s to a State Pension.”
Applications for Specified Adult Childcare Credit open every October and work a tax year in arrears which means family members who provided free childcare in person, over the phone or by video call during the pandemic and subsequent lockdowns can apply and may be able to get NI credits added to their State Pension.
NI credits were introduced in April 2011 and you may be entitled to receive these under the Specified Adult Childcare Credit rules even if the child’s main carer was working from home.
When the first lockdown began in March 2020, normal caring arrangements were affected by restrictions imposed across the country, but if you provided care in a different way during those 18 months - for example over the phone, by video call, or socially distanced contact - you can still apply for NI credits for the financial years 2019 to 2020, 2020 to 2021 and 2021 to 2022.
It’s important to note that if no-one has claimed Child Benefit for the child there is no attached NI credit to transfer and Specified Adult Care credits cannot be awarded.
Each credit currently buys up to £275 of annual State Pension (£250 last year), payable for life from State Pension age and as it can be claimed back to the start - some 11 tax years - it could give a much needed boost in later life.
Last year, claiming back to 2011 could have given a State Pension boost of up to £2,340, which means this year it is worth more than £2,600.
To calculate each year individually, divide the annual State Pension for a certain tax year by 35.
HM Revenue and Customs (HMRC) has previously said it believes that this benefit is under-claimed, and many who are eligible are missing out.
Many older women have less than the 35 years of NI credits from their own working life, which contributes to the Gender Pension Gap which means those supporting younger generations by providing free childcare can improve their retirement prospects.
To get the full, new State Pension you need 35 years of NI credits, for any State Pension payment at all, you need 10.
Who can apply for Specified Adult Childcare credits?
You can apply for Specified Adult Childcare credits if:
you are a grandparent, or other family member caring for a child under 12
you were over 16, and under State Pension age when you cared for the child
you are ordinarily resident in the United Kingdom
the child’s parent (or main carer) is entitled to Child Benefit and has a qualifying year for National Insurance without needing the parent’s class 3 NI credits which they receive automatically from Child Benefit (they can check their National Insurance record online here to see if they have any gaps in contributions
The child’s parent (or main carer) must agree to your application by countersigning the form to confirm that:
you cared for their child for the period stated
you can have the Class 3 NI credit for the period stated
For a full list of what counts as a family member for the purposes of Specified Adult Childcare credits, visit GOV.UK here.
When to apply
Specified Adult Childcare credits can be awarded retrospectively, to April 6, 2011 at the earliest.
Applications for a particular tax year cannot be accepted until the following October at the earliest, which means for the tax year 2021 to 2022 applications open this month.
If you have been providing childcare, it's crucial that you take note of when and how you did so, this will help make the application process much simpler and quicker to complete.
How to apply
To apply for Specified Adult Childcare credits you will need to complete an online interactive application form.
The application requires the:
personal details of the applicant – the family member caring for the child
child’s details and the periods of care
personal details of the child’s parent (or main carer) – the Child Benefit recipient
applicant and the parent must both sign their declarations on the application
For full details on Specified Adult Childcare credits and to apply for NI credits, visit the GOV.UK website here.
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