In April 2011, the government introduced Specified Childcare Credits. This allows grandparents – or another member of the family- to claim national insurance contributions if they are looking after a child under the age of 12 whilst the parent (or main carer) is working.
Why is this good news? Well, to get the maximum of new State Pension, the system relies on you having built up enough national insurance credits before you retire. This is a great way to get the credits. I have already written about claiming child benefit if you are not working – even if it means you have to pay it back at the end of the year because your spouse or partner is working and earning over the limit. Why? Because when you get child benefit, you also get the national insurance credit to your State Pension.
How the Specified Childcare credit works is to transfer the national insurance credit from the parent claiming to the person caring. So, let’s say you and your partner are working. You earn over the threshold for child benefit (£50,000) and so if you go the child benefit, you would have to pay it back anyway. You might think that you would not bother claiming child benefit but the advantage of getting child benefit – even if you don’t take the money- is that you get the national insurance credit to your national insurance record which is linked to your State Pension. Now, you might think well, so what? I’m working anyway and I pay national insurance through my wages. This is where the Specified Childcare credit can be an advantage to you because if your mum or dad or brother or sister in law or other ‘family member’ (there’s a long, long list) is caring for your child, you can pass the national insurance credit on to them.
This helps stop gaps in national insurance records. You might have a mum or dad who are not working or working part time but not get claiming state pension. This would help them. You might have a family member who is not working as they have their own children but look after yours a couple of days a week so you can work. This would help them – especially if you are paying national insurance anyway so you can pass on the credit.
The information page and application form is here.