Have you heard of the adult childcare credit scheme? Do you know a grandparent or other family member caring for a child? 
Adult childcare credits was introduced with effect from the tax year of 2011-12. This credit was for grandparents or other family members who may be caring for a child under the age of 12 whilst their parent is working to receive a Class 3 National Insurance credit. This NI credit is available when the grandparent or other family member is caring for the child each week or part of a week. 
 
For those who have not made enough contributions in order to benefit from the basic state pension, but also for certain bereavement benefits (until April 2017), Class 3 NIC's is a voluntary contribution to help fill in these gaps so they can benefit more. 
 
Figures from Royal London stated that, if a working age grandparent misses out on 1 year of state pension rights due to them spending time with their grandchild instead of being paid at work, this costs them £231 which is 1/35th of the full rate of the state pension. Over a 20-year retirement this would be a loss of £4,500. 
Royal London also estimated that if the scheme was better known, then more than 100,000 grandparents that are currently working could benefit from it. HMRC published figures that only 1,298 grandparents benefited from this scheme from the year to September 2016. 
 
According to Steve Webb the Royal London Director of Policy, many families rely on the support provided by grandparents to enable them to combine work and family life. There is a scheme to make sure grandparents do not lose out, protecting their pension rights but people aren't using it enough. The Government needs to act swiftly to alert mothers to the fact they can sign over the National Insurance credits that they do not need. 
Tagged as: tax
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