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From 6 January 2024, the main rate of class 1 National Insurance contributions (NIC) deducted from employees’ wages is reduced from 12% to 10%. From 6 April 2024, the main rate of self-employed class 4 NIC will reduce from 9% to 8% and class 2 NIC will no longer be due. Those with profits below £6,725 a year can continue to pay class 2 NIC to keep their entitlement to certain state benefits. Our guidance will be updated in full in spring 2024.

Updated on 6 April 2023

Specified adult childcare credits

Many people – often grandparents – look after their relative’s children to allow the parents (or carers) to go out and work. This can mean they are not building up entitlement to the state pension. Specified adult childcare credits may be available to ensure state pension entitlement is preserved for these ‘family carers’.

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Specified adult childcare credits

Where the parents (or carers) receive National Insurance credits as a result of their child benefit claims, but they do not need them because they are paying NICs through their employment or self-employment they will have spare credits. These can be transferred to a relative who looks after the child to allow the parent (or carer) to work.

Even if the parent (or carer) has chosen not to receive the child benefit payments, perhaps because of the high income child benefit charge, they will still receive these National Insurance credits as long as they have claimed the child benefit. If the parent (or carer) has not claimed child benefit at all – whether because of the high income child benefit charge or for some other reason – then a claim for child benefit can only be backdated by three months. See GOV.UK for details of how to claim.

If transferred, these National Insurance credits are known as specified adult childcare credits, and can count towards the relative’s eligibility for a state pension, provided that the individual wishing to claim the credits did not have a valid election in place to pay reduced NICs. Specified adult childcare credits could be very valuable where the relative has not yet reached the maximum number of years required for a full state pension; or they could help a relative qualify for some state pension where they had not met the minimum number of qualifying years for a state pension.

For individuals reaching state pension age on or after 6 April 2016, the number of years required for a full state pension is 35. The minimum number of years required for a partial state pension is 10.

Eligibility

Certain relatives can claim the credits provided all of the following conditions are satisfied for the relevant tax year:

  • The relative providing childcare has not already reached state retirement age;
  • The relative looks after a child or children under the age of 12 while the child or children’s parent or main carer is working (see below regarding socially distanced care);
  • The relative does not already have a qualifying year in their own right through their own contributions or NIC credits;
  • The relative is ordinarily resident in the UK;
  • The parent (or carer) does not need the NIC credits from their child benefit claim for their own NIC record.
  • Both the relative and the parent (or carer) make a joint claim at the relevant time (see below).

You can find a list of relatives that are able to claim the credits in the GOV.UK Specified Adult Childcare credits factsheet.

For the 2019/20 and 2020/21 tax years, care provided ‘at a distance’ (for example, because social distancing prevented normal caring arrangements from being possible) could qualify. Examples of such care might have involved the use of telephone, video calls or other forms of socially distanced contact.

Checking if the parent needs the credits

As mentioned above, it is only possible to claim specified adult childcare credits if the parent or care who claims child benefit does not need them. The simplest way to know if the parent needs them is to check the National Insurance record of the parent or carer. They can only do this after the end of the tax year and the record may not be fully up to date until October following the end of the tax year. This means that you would have to wait until October 2024 before you made the request for the tax year 2023/24. However, you could check for the 2021/22 tax year and earlier years, and from October 2023 for the 2022/23 tax year.

In the meantime, you can get an indication by considering their pay from working.

Employees are treated as having paid NIC for pay periods in which they earn in excess of the lower earnings limit (£123 per week / £533 per month in 2023/24) in a single employment. They pay NIC once they earn in excess of the primary threshold in that employment. The primary threshold for the 2023/24 tax year is £242 a week (£1,048 a month).

Provided the children’s parents (or carers) earn enough over the year, they will make up a ‘qualifying year’ towards their state pension. Any pay periods when they earn less than the lower earnings limit are excluded, but in order to get a qualifying year they need to earn only £6,396 (in 2023/24) over the remaining weeks. That figure excludes any earnings over £967 in a single week.

If the parent has two or more employments at the same time – for example, two part-time jobs with employers that are not connected – then you must consider the earnings from each of them separately against the above thresholds. For example, if the parent earns £100 a week from each of two employments, then they will not pay NIC on either employment and the earnings will not count towards entitlement towards state benefits, even though they earn more than £123 a week in total across both employments.

For the self-employed, provided that they pay (or are treated as having made) Class 2 NIC for the whole year, that will give the parents (or carers) a qualifying year towards their state pension. See our page NIC for the self-employed for information on Class 2 NIC.

How and when to claim

Both the parent/carer giving up the credits and the family member claiming them need to complete and sign the claim form CA9176. As noted above, this cannot be actioned until at least October following the end of the relevant tax year – so October 2023 for the tax year 2022/23, and October 2024 for the tax year 2023/24, but you could make the claim for earlier years.

Claims can be processed for as far back as the tax year 2011/12, so it is well worth making sure all relevant credits are claimed.

More information

It is the person who has claimed the child benefit who may be able to give up the NIC credits.

Other people who might claim the credits include the partner of the child benefit claimant. They would claim on form CF411A.

There is only one set of NIC credits to be transferred so if more than one person is eligible to claim, they need to agree who will claim.

You can read more about specified adult childcare credits on GOV.UK.

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