Grandparents who give up their job to look after their grandchild could be losing out on their state pension rights. Grandparents who are under state pension age caring for grandchildren under 12 years old could qualify for National Insurance credits that can top up their income in retirement. What exactly is the Grandparents’ credit and how does it work? Under the rules surrounding specified adult childcare credits, if a mother goes back to work after the birth of a child she can sign a form that allows a grandparent, or other family member, to receive National Insurance (NI) credits for looking after the child. This means that working parents can give up the Child Benefit credits they receive and donate them to their child’s grandparent or other adult family members for the previous tax year.
Grandparents and parents must apply for the credits to be transferred and the forms must be signed by both the grandparent carer and the Child Benefit recipient. Victoria Cheston of Newton Aycliffe Citizens Advice states “If a working-age grandparent misses out on one year of state pension rights because they are caring for a grandchild instead of doing paid work, this could cost them one 35th of the full rate of the state pension or £231 per year.” If you wish to apply for Grandparents credit you should apply to HM Revenue & Customs (HMRC). Applications need to be made in the October following the end of the tax year in which the caring took place. If you need further information on this credit then please call into your local Citizens Advice during a drop in session or call Adviceline on 03444 111 444 (Monday to Friday 10-4pm)
