Elderly individuals providing care during term-time or school holidays for children under the age of 12 could potentially increase their State Pension payments by over £6,000 across a typical 20-year retirement period by claiming a National Insurance perk from HM Revenue and Customs (HMRC).
A single additional National Insurance credit can add approximately £303-a-year to the full, New State Pension.
This State Pension top-up is referred to as Specified Adult Childcare and operates by transferring the National Insurance credit linked to Child Benefit from the Child Benefit recipient to a family member who is caring for a related child under 12, or 17 if they have a disability.
You will be granted a Class 3 National Insurance credit for each week or part week you provided care for the child, but there is only one credit available for each Child Benefit claim – regardless of how many children are on the claim itself.
For instance, if two grandparents cared for their daughter’s two children, there is only one credit available for transfer and the Child Benefit recipient must decide who should receive the credit, reports the Daily Record.
However, if the grandparents also have a son and provide care for both their daughter’s child and their son’s child, there are likely to be two Child Benefit recipients and therefore, two credits are available for transfer.
If no one has claimed Child Benefit for the child, there is no attached National Insurance credit to transfer and credits cannot be awarded.
While it may seem a bit complex, essentially the boost is only available for those caring for children whose parents are working, meaning they don’t require the National Insurance credits from claiming Child Benefit to contribute towards their own State Pension.
It’s also worth noting that you can submit a retrospective claim for Specified Adult Childcare dating back to 6 April 2011.
Claim for providing remote care during the Covid-19 pandemic
According to guidance on GOV.UK, your usual caring arrangements may have been disrupted by Covid-19 from March 2020.
This implies that if you provided care, even remotely via phone, text message or video call during the pandemic and subsequent lockdowns, you might be able to fill any gaps in your National Insurance record by claiming Specified Adult Childcare.
This applies to the tax years 2019 to 2020 and 2020 to 2021.
The full, New State Pension is valued at £230.25 per week, equivalent to £11,973 annually, but to receive this maximum amount you need roughly 35 years’ worth of National Insurance contributions. You need at least 10 years to receive any payment at all.
Some individuals may have been ‘contracted out’ and will require more than 35 years – find out more here.
Who can apply for Specified Adult Childcare credits?
You can apply as long as:
- you are an eligible family member who provided care for a child under 12
- you were over 16 and under State Pension age when you provided care for the child
- you are ordinarily resident in the UK but not the Channel Islands or the Isle of Man
- the child’s parent (or main carer) has claimed Child Benefit but does not need the credits themselves
The child’s parent (or main carer) agrees to your application by counter-signing the form to confirm that you:
- provided care for their child for the period stated
- can have the credits for the period stated
Who counts as an eligible family member
You’re considered an eligible family member if you are the:
- mother or father who does not live with the child
- grandparent, great-grandparent or great-great-grandparent
- brother or sister – including a half-brother or half-sister, step-brother or step-sister, an adopted brother or an adopted sister, aunt or uncle
You’re also deemed an eligible family member if you are either the:
- current or previous husband, wife, partner or civil partner of anyone in the list above
- son or daughter of the current or previous husband, wife, partner or civil partner of anyone in the list above
Who shouldn’t apply
Don’t apply for credits if during the same period you:
- already have a qualifying year of National Insurance – usually because you work or receive other National Insurance credits
- are receiving Child Benefit for any child and already get credits automatically
If you’re the spouse or partner living with the Child Benefit recipient and wish to transfer the credits to yourself, you need to fill out form CF411A – more details can be found here.
When to apply
You must wait until 31 October after the end of the tax year you want to apply for. This means you can now claim for the financial years 2011/12 – 2023/24.
This is because HMRC needs to verify that the parent or main carer already has a qualifying year for National Insurance purposes.
What you need to apply
To fill out an application form, you will need:
- your personal details as the eligible family member that provided care for the child
- the child’s details and the periods you provided care for them
- the personal details of the child’s parent or main carer – the Child Benefit recipient
The HMRC guidance states that both you and the Child Benefit recipient must sign a declaration on the application form.
It also advises that the child’s parent or main carer should check their National Insurance record online before you apply, to ensure that they have credits to transfer.
Full details on how to apply can be found on the GOV.UK website.
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