Warning for grandparents looking after kids this summer who risk missing out on £6,000
GRANDPARENTS helping out with childcare this summer are missing out on a whopping £6,000 – here is how to find out if you can claim.
It is not uncommon for grandparents to lend a helping hand over the summer holidays and support with childcare.
But many grandparents are unaware that they can be financially compensated for the time spent looking after their grandchildren.
Grandparents could be eligible for extra credits worth up to £300 a year by the government.
These credits are formally known as “specified adult childcare credits” and they count as a national insurance (NI) credit for those who don’t otherwise work.
It is important to be aware of these credits, because you need at least 10 years’ worth of NI credits to qualify for the state pension, and 35 years’ worth to get the full amount.
It means grandparents and other relatives looking after a child under 12 can give their pension a boost.
Wealth management company Quilter said these credits can make someone over £6,000 better off over the course of a typical retirement, which is around 20 years.
Research by the firm found that 19,616 people apply for the credit with around 15,400 applications proving successful.
In total, 123,138 people have successfully claimed the credit. So if you think you are eligible it is worth applying.
You can even apply for backdated childcare national insurance credits all the way back to 2011, as long as you were eligible in those years.
How do I know if I am eligible?
You can claim if you are an eligible family member and responsible for caring for a child whose parents claim child benefit; otherwise, there are no national insurance credits to transfer.
Moreover, there is only one credit available per child benefit claim, regardless of the number of children.
So even if you care for two of your grandchildren, only one credit can be transferred to you.
It is also important to note that the credits are available for transfer only if you are under the state pension age, which is currently 66 years old.
The child you are caring for 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 must remember that claims can only be backdated to 6 April 2011.
You should also be aware that credits can only be transferred if the parent does not need them and agrees to the grandparent’s application.
Also keep in mind that applications for a specific tax year can only be submitted after 31 October of the following tax year.
What the experts say
Jon Greer, head of retirement policy at Quilter, said the number of people applying for the credit have been “steadily climbing” and eligible grandparents should claim.
“It is fantastic to see more grandparents and other family members take advantage of Specified Adult Childcare Credits. The numbers of people applying for the credit have been steadily climbing and last year saw the most people apply on record with this year set to top that,
“These credits are not only crucial for securing the full state pension if you have gaps in your National Insurance record, but they are also a cost-effective method of doing so, versus paying to fill in missed years,” Jon explained.
“It’s worth knowing too that the number of hours a grandparent helps out with childcare is irrelevant to the claim. Even if it’s just one day a week, eligible grandparents should be able to claim,” he added.
How do I claim the credits?
These credits can be tricky getting as it involves parents signing over their child benefit national insurance credit to someone else.
Of course, a parent should only agree to hand them over if they’re already in work or earning credits another way themselves.
The child’s parent or main carer should check their National Insurance record online, to make sure that they have credits to transfer.
If you have made all these checks you then need to fill out an application form which include the following details:
- 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
- Your personal details as the eligible family member that provided care for the child
You can apply for the credits using this form on the government’s website.
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.
In 2023/24, 1/35 of the £203.85 a week state pension is £5.82 – close to £303 a year.
This works out at around £6,000 over a a 20-year retirement.
To calculate how much you’ll get, simply multiply the number of years you have been caring with £300 to get a rough idea.