LOOKING AFTER A GRANDCHILD MAY BOOST YOUR PENSION!
Grandparents
and other relatives who are not in paid work and look after children under 12
years old could be entitled to National Insurance credits which may help them
qualify for a full state pension.
There are
four main conditions.
First, the
child’s parent gets child benefit for a child under 12
Second, that
parent has a full National Insurance record for the whole tax year. That doesn’t
mean they have to work all the year. But they have to have paid enough
contributions at work in that year for it to count towards their state pension.
Third the
grandparent or other relative has provided some care for the child in every week
during that tax year. ‘Provided care’ is not defined but as long as the relative
has looked after the child for some time in the week that is sufficient. For
example, after school during term time and visits or days out in the school
holidays. Credits can be given for individual weeks or fewer weeks than the
whole tax year but that may not be enough to make the year ‘count’ towards the
caring relative’s state pension.
Fourth the
relative claiming the credits has to be aged 16 or more but under state pension
age for the whole of the tax year.
The scheme
works because the parent who gets child benefit for a child under 12 is entitled
to National Insurance credits if she (or he) does not work. But if they work
they have no need of the credits and they can be passed to a relative who helps
look after the child.
The parent
and the relative have to apply jointly and state that care took place each week
of the tax year.
Although
grandparents are the most likely group to benefit, the term ‘relative’ includes
dozens of different people, some fairly distantly related. It includes the
parent’s brothers and sisters, uncles and aunts, husbands, wives, civil partners
or just partners of these people (and former partners of them too), children of
any of those people and their partners etc. Half siblings and adopted siblings
are treated equally. Only one relative can get a credit for a particular period.
At the
moment claims can be made for the tax year 2011/12 (which ran from 6 April 2011
to 5 April 2012). That was the first year the scheme operated. Claims for
2012/13 will be accepted from October this year.
The people
who should claim are working age relatives who have a gap in their National
Insurance record – fewer than 35 years if they will reach state pension age on 6
April 2016 or later. Buying a year’s contributions would cost more than £650 so
the credits are well worth having for nothing.
More details
and a claim form
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/198999/specified-adult-childcare-credits.pdf
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