GRANDPARENTS could be missing out on up to £3,000 – here’s how you can claim.
Families looking to cut expensive childcare costs during the cost of living crisis are turning to relatives for help.
But many grandparents don’t realise they can be financially compensated for their time.
Grandparents could be eligible for extra credits worth £275 a year by the government.
These credits are known as “specified adult childcare credits” and they count as a national insurance (NI) credit for those who don’t otherwise work.
This is important because you need at least 10 years’ worth of NI credits to qualify for the state pension, and at least 35 years’ worth to get it in full.
Applications are now open for 2021/22, and former pensions minister Steve Webb is encouraging anyone who thinks that might be eligible to put in an application.
Mr Webb, a partner at consultants LCP said:“Informal childcare by another family member is often what enables a parent to go out to work, especially given the high cost of formal childcare.
“National Insurance credits help people to protect their state pension while doing valuable work such as looking after a child.
Now that applications are open for 2021/22, I would encourage anyone who thinks they might be eligible to put in an application.
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They should also think about whether they might have been entitled at any point since 2011, as there is currently no deadline for backdated claims”.
If someone had been providing childcare every year since 2011/12, and now put in a claim for all years from 2011/12 until 2021/22, this would be eleven years of credits and could add just over £3,000 per year.
How to check if you’re eligible
To be eligible, the carer must be under state pension age, which is 66 years old.
The child must also be under 12 years old, or 17 if they have disabilities.
To claim, you must live in England, Scotland, Wales and Northern Ireland, but not the Channel Islands or the Isle of Man.
Plus, you’re only eligible if the child’s parent is entitled to child benefit and has a qualifying year for national insurance without needing the parent’s class 3 national insurance credits which they receive automatically from child benefit.
There is no minimum requirement for the number of hours of care to qualify.
And if you looked after your grandkids remotely during lockdown, you can also still claim.
You can check your national insurance record on the GOV.UK website to see if you have any gaps in contributions.
How much can you claim?
How much you’ll get in extra credits depends on how long you’ve been looking after your grandchildren.
Each yearly credit is worth 1/35 of the value of the state pension, which is currently around £275 per year.
This works out at around £5,000 over a a 20-year retirement.
You can also backdate claims from as far back as 2011.
So if you’ve been taking care of your grandkids since 2011, you could get around £3,000 towards your state pension.
To calculate how much you’ll get, simply multiply the number of years with £275 to get a rough idea.
How to claim the credits
These credits are complicated as getting them involves parents signing over their child benefit national insurance credit to someone else.
Of course, parents should only do this if they’re already in work or earning credits another way themselves.
You should also be aware that only one grandparent or family member can receive the credit and the credit isn’t per child, but per child benefit claimant.
So if, for example, two grandparents care for their daughter and her partner’s two children, there is only one credit available and the daughter will have to decide which grandparent should have the credit.
But if the grandparents care for their daughter’s child and their son’s child, there are likely to be two child benefit recipients – one for each set of parents.
So then there would be two national insurance credits available for transfer.
You can apply for the credits using this form on the government’s website.
Applications for Specified Adult Childcare Credits can be made from the October after the tax year the credits are being applied for.
Once you’ve filled in your details, the child’s parent (or main carer) must also agree to your application by countersigning the form.
If you need any help you can call the national insurance helpline on 0300 200 3500.
Brits over the state pension age could also be entitled to thousands of pounds a year in benefits.
And the state pension could rise for millions next year as inflation hits 10.1%.