Can looking after your grandchildren help to pay your pension?

woman holding baby near window

 

Over the past decade or so, family dynamics have changed fundamentally. Parents with adult children are increasingly sharing their homes with their offspring well into their 20s and 30s. With the housing ladder beyond the reach of so many younger people and the burden of student debt hanging over their heads, it’s now normal to start adult lives under mum and dad’s roof.

Alongside this change is the growing role that grandparents are playing in their grandchildren’s lives. Once your adult offspring have finally flown the nest and started their own families, you may find that you become vital childcare providers for their little ones.

Back in 2011, the government realised how important this childcare role is and changed the National Insurance rules to allow grandparents to receive NI credits for looking after their grandchildren.

What is the Specified Adult Childcare Credit?

This credit works by transferring the National Insurance credit associated with claiming child benefit, from the parent of a child (under 12) to a family member who has taken on a childcare role for that child when the parent returns to work. To be classed as an eligible family member, you will need to be:

1) a ‘non-resident parent’

2) grandparent, great-grandparent or great-great-grandparent

3) brother or sister

4) aunt or uncle

There are also some other relatives by marriage that be considered, so check here for the full list.

How can the Specified Adult Childcare Credit help you?

For each week you provide childcare for your grandchild, niece or nephew, you can receive a Class 3 NI credit. These credits are needed to build up your State Pension entitlement. If you have gaps in your National Insurance Contribution, which could leave you with a reduced State Pension, this credit scheme could help you plug these gaps.

Am I eligible for the Specified Adult Childcare Credit?

In order to qualify, child benefit needs to be claimed for the child or children in question. If the parents are not entitled to child benefit, then no National Insurance credits will be available.

Another major eligibility issue is that the parent of the child must qualify for child benefit and must also have a qualifying year for National Insurance without the need for the Class 3 credit afforded to them automatically when claiming child benefit.

In order to receive the Specified Adult Childcare Credit, you must fill in an online application form, giving the following details:

· Your personal details

· The child’s details and the periods of care

· The child’s parent/the Child Benefit recipient’s personal information

· The signatures of both the applicant

If you currently work, you may find that you already have a full year’s NI contributions and therefore, there will be no need to claim the Specified Adult Childcare Credit. There is an online tool that allows you to check your NI record here. (Please note that by clicking the links in this article, you will be leaving our website and we can take no responsibility for 3rd party website content.)

Photo by Juan Pablo Serrano Arenas on Pexels.com

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