Good old grandparents!

Grandchildren love them because they are a source of sweets, and parents are grateful for the free childcare.

But did you know, there are actually state benefit perks if your parents help look after your children.

Grandparents can get national insurance credits towards their state pension if they have retired to help look after a child under 12 years of age.

Under the Government scheme, a parent who has gone back to work can transfer the national insurance credit they usually receive with child benefit to the grandparent who is looking after their child, at no cost to themselves.

The parent still receives a national insurance credit as they will be in work.

Such credits are added to the National Insurance record of the grandparent if they are still under state pension age and help them to build up a full state pension.

Research suggests this tax credit is underused.

A Freedom of Information (FOI) request by insurer Royal London has found that more than 10,000 grandparents and other family members received help with their state pension in 2017/18 for looking after grandchildren.

This represents a sevenfold increase on two years ago.  But Royal London estimates that lack of awareness of this scheme means that many hundreds of thousands more family carers are still missing out on help.

In 2015/16 a Freedom of Information request by Royal London revealed that just 1,298 grandparents and other family members were benefiting from the scheme.  Following a burst of publicity, the number claiming rose to 10,084 by 2017/18, according to a new FOI response.  But this is still thought to be a small fraction of all the people who could benefit.

The numbers who are missing out are not known precisely, but according to research by charity Grandparents Plus, around two thirds of all grandparents report that they spend time looking after grandchildren.  Given that there are more than 7m grandparents in Britain (of all ages) with grandchildren under 16, it is hard to believe that the 10,084 who claim NI credits is more than a small fraction of those who are entitled.

Are you making sure your childcare helper is rewarded?

The scheme is known as the ‘specified adult childcare credit.’

Other family members such as aunts and uncles can also apply, not just grandparents.

Under the scheme, the child benefit recipient can sign to indicate that she (or he) no longer wishes to benefit from the NI credit that comes with the child benefit;  this might be because they are out at work and paying NICs in any case, so do not benefit from the credit.

There is no minimum hours requirement, and claims can be backdated to when the scheme was first introduced in 2011.

More information can be found at: https://www.gov.uk/government/publications/national-insurance-credits-for-adults-who-care-for-a-child-under-12-fact-sheet/specified-adult-childcare-credits-fact-sheet

  • HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen