Testimonials
I am very comfortable with the service and the way my finances have been set up.
Richard of Hemel Hempstead
Has always provided clear, understandable and timely advice on pensions.
David from London
Child Benefit - Possible Loss of NI credits
An issue has recently been highlighted in relation to National Insurance credits where the working parent of a couple registers to receive Child Benefit rather than their non-working partner.
Normally, a parent or carer of a child under 12 automatically gets Class 3 National Insurance (NI) credits if they claim Child Benefit (whether or not they actually choose to receive the Child Benefit payments).
However, if the Child Benefit is claimed by the working parent (who will usually already be paying NI), the non-working parent does not receive any NI credits and may therefore lose entitlement to future State Pension.
While NI credits can be transferred between parents of children under the age of 12 using HMRC form CF411A, backdating is normally limited to a single tax year. However, if the time limit has passed the application form should still be completed giving the reason why the person didn’t apply on time. If the circumstances are reasonable HMRC can still award the credits as long as the person meets the transfer conditions. These are:
- They didn’t reach State Pension age before 6 April 2008
- The person registered for Child Benefit can’t get credits because their earnings were equal to or above the qualifying earnings factor for that year
- They were living with the person who was registered for Child Benefit for the relevant period and sharing the care for a child under the age of 12
- They would have been able to register for Child Benefit if their spouse, partner or civil partner hadn’t registered for it
HMRC estimates that “around 3%” of households claiming Child Benefit could be caught in this NI credit trap.
HMRC has recently published an updated fact sheet on adult childcare NI credits.
