You may get National Insurance credits if you claim Child Benefit – is it beneficial to transfer them?
If you claim Child Benefit, you may be awarded National Insurance credits that count towards your entitlement to some benefits such as the state pension. But if you are already paying enough National Insurance contributions, through working for example, or being awarded credits already, then you may not need the child benefit credits so you could transfer them to your partner. Other carers, for example, the child’s grandparent, may be able to claim specified adult childcare credits as explained below. Transferring and claiming credits could prove beneficial where the person who receives them would not otherwise pay sufficient National Insurance contributions for the year as a result of not working or only earning a small amount.
What are National Insurance contributions and credits?
National Insurance contributions help to pay for some state benefits including state retirement pension. National Insurance contributions that you pay or are credited with can earn you the right to receive certain benefits.
You pay National Insurance contributions if you are either employed or self-employed and aged 16 or over but below state pension age, subject to earning minimum amounts. You can read about these contributions for the employed and self-employed on our website.
In certain circumstances, you may be given National Insurance credits, even though you are not working. These count towards some entitlements, like the state pension. You must be aged 16 or over and below state pension age to receive these credits.
There are many different circumstances in which you might be eligible to receive National Insurance credits, including being unable to work due to illness, or caring for someone. There is more information on the different situations in which you might be able to get National Insurance credits and how to get National Insurance credits on the GOV.UK website.
In some circumstances, you should be given National Insurance credits automatically, for example, if you get employment and support allowance or carer’s allowance. In other circumstances, you have to make a claim.
Who can claim child benefit?
Details on who can claim child benefit can be found on GOV.UK.
What are the credits for parents and carers associated with child benefit?
If you are aged 16 or over and claim child benefit for looking after a child under the age of 12, you may automatically receive Class 3 National Insurance credits that count towards your state pension and some bereavement benefits. Note that you may receive these credits automatically if you have claimed child benefit but elected not to receive any payments because you or your partner are subject to the High Income Child Benefit Charge (HICBC).
It is important to understand that the credits are given to the person who claims the child benefit and only if they cannot use them can they be transferred to someone else. Broadly you, as another carer, may qualify if the child under the age of 12 lives with you and you share responsibility for the child’s care with the claimant of the child benefit.
As explained above, contribution credits can help build up your entitlement to State Pension and may also provide your spouse or civil partner with entitlement to bereavement benefits.
There is a limit on the number of years for which credits can be awarded. This is a maximum number of 22 tax years for entitlement to State Pension or half the number of years of your working life for bereavement benefits. Your working life is the based upon the tax year in which you reach age 16 and the tax year in which you reach State Pension age or die under that age. You can check your State Pension age on GOV.UK.
As the partner of a person awarded Child Benefit you must apply to HMRC before the end of the tax year following that in which the week for which you are claiming falls, or, within such time as HMRC consider reasonable in the particular circumstances. In other words, the transfer of these credits is not automatic and you need to take action. The first thing to do is to check whether any credits are available for transfer.
How do I check if I can transfer the National Insurance credits?
Credits can only be transferred if you, as the person awarded child benefit, have a qualifying year by another means, for example, you are employed or self-employed and have paid enough National Insurance contributions and therefore do not need the credits yourself.
It is possible to check your National Insurance contribution record by:
- logging into your personal tax account;
- applying online, using the form on the GOV.UK website;
- phoning HMRC’s National Insurance enquiries helpline – you can find the details on the GOV.UK website;
- writing to HMRC (you can find an address on the GOV.UK website).
You can also find out how much state pension you could get, when you can get it and how you can increase it on GOV.UK.
Once you have established that credits may be transferred, your partner may apply for credits to be transferred to them using form CF411A. There are strict time limits so, for example, if you wish to apply for credits for any weeks falling between 6 April 2016 and 5 April 2017, your application must be received before 5 April 2018.
Foster carers and kinship carers
If are aged 16 or over and are an approved foster carer or kinship carer of a child under the age of 12 you can apply for National Insurance credits using form CF411A. If you qualify, your National Insurance record will be credited with Class 3 contributions.
Credits for grandparents and other family members who care for the children
If you are aged 16 or over and are a grandparent or other family member of a child under the age of 12 who you look after because their parents (or main carers) are working, you may be able to get ‘specified adult childcare credits’. You can only claim these if the claimant of the child benefit does not need the credits themselves – for example, if they are working. If you qualify, your contribution record will be credited with Class 3 contributions that may allow you to build up enough contributions to receive a state pension or to increase the amount you would otherwise receive. You must claim these credits on GOV.UK, they will not be automatically added to your record. You cannot claim these credits before October following the end of the relevant tax year – so not before October 2017 for claims relating to the tax year 2016/17. There is currently no deadline by which to claim the credits although you should aim to make a timely application. The first tax year for which these credits are available is the 2011/12 tax year.
Pension and National Insurance for carers
We have previously published an article specifically on pension and National Insurance for carers with the emphasis on Carer’s Allowance although child benefit was included.