Specified Adult Care Credits
It’s fairly commonplace for family members – particularly grandparents – to look after young children in order for the child’s parent/s to return to work. Often, these carers reduce their own working hours to be able do this, or even give up work completely.
Despite this, many working-age grandparents are unaware that they could qualify for National Insurance (NI) credits. These can significantly boost their State Pension in retirement. So, we’ve taken a look at Specified Adult Childcare credits in more detail.
So, what is it and am I eligible?
Specified Adult Childcare credits work by transferring the NI credit attached to Child Benefit from the Child Benefit recipient to a family member who is providing care for a related child under 12. Take note though that if no one has claimed Child Benefit for the child there is no attached NI credit to transfer. In this case, no Specified Adult Care credit is available.
As Specified Adult Childcare credits work by transferring the NI credit attached to Child Benefit from the Child Benefit recipient to a specified adult. There is not a credit available for each child under 12 cared for. However, there is a credit for each Child Benefit recipient. For example, if 2 grandparents are caring for their daughter’s 2 children, there is only one credit available for transfer and the Child Benefit recipient must decide who should have the credit. However, if the grandparents are caring for their daughter’s child and their son’s child, there are likely to be 2 Child Benefit recipients and therefore 2 credits available for transfer.
What benefit is available?
Specified Adult Childcare credits will help build up your National Insurance contributions. This means:
- you will receive a Class 3 NI credit for each week or part week you cared for the child (Class 3 NI credits help to build entitlement to the State Pension and, until April 2017, certain bereavement benefits)
- it can help to stop gaps in your National Insurance record.
Who counts as a family member for Specified Adult Childcare credits
If you look after a relative under age 12:
1) mother or father who does not live with the child (‘non-resident parent’)
2) grandparent, great-grandparent or great-great-grandparent
3) brother or sister ( can include step relationships too)
4) aunt or uncle
5) husband or wife or former husband or wife of anyone in 1 to 4
6) civil partner or former civil partner of anyone in 1 to 4
7) partner or former partner of anyone in 1 to 6
8) son or daughter of anyone in 5 to 7
9) in respect of the son or daughter of anyone in 4, that person’s: husband or wife or former husband or wife, civil partner or former civil partner, or partner or former partner.
This can be a valuable benefit and probably one that isn’t well known. If you have any questions on this article, please do not hesitate to contact us. Call 01904 623888 or email at contactus@yorwealth.co.uk.
The levels and bases of taxation, and reliefs from taxation, can change at anytime. They are generally dependent on individual circumstances. The Financial Conduct Authority does not regulate Trusts and Taxation. Information contained in this guide does not constitute advice. Do not make decisions solely on the information in this guide. Please seek individual advice for your individual position. YorWealth Ltd is an appointed representative of Hexagon Wealth Limited which is authorised and regulated by the Financial Conduct Authority (FCA no.483403). The firm is registered in England and Wales No. 12938859 and its registered office is Studio 7, Forest Farm Business Park, Fulford, York, YO19 4RH.
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