MARTIN Lewis has revealed how grandparents can get thousands of pounds in free cash.
The money saving expert explained how people can get help through “Specified Adult Childcare Credits”.
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Speaking on the Martin Lewis Money Show last night revealed how the “little-known” tip can boost grandparents’ pensions by £1,000s just by looking after their grandkids.
It’s essentially compensation for grandparents below state pension age looking after their grandchildren if their parents are at work – and they’re worth £300 a year.
The credits count as a National Insurance contribution (NICs) credit for those who otherwise don’t work.
This is important as you need at least 10 years’ worth of NI payments or credits to qualify for the state pension and at least 35 years’ worth to get the full amount.
Grandparents and any family member can apply for these credits for their state pension entitlement for the previous tax year.
Those who have been providing childcare in earlier years can backdate their claim to 2011, when the scheme started.
Speaking on the show, Martin said: “If grandparents are looking after under-12s while the parent works, the working parent can apply for what is called the Specified Adult Childcare Credit.
“What that does is it transfers the National Insurance credit that the parents would have got for looking after the children to the grandparent – so the grandparent gets it instead.
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“The parent won’t miss out because they’re working and as long as they’re earning enough they’ll get National Insurance credits from working.
“Getting these National Insurance years, if you’ve got gaps in your National Insurance, can massively boost your state pension once you get into retirement by thousands of pounds over the rest of your life.”
He also explained that applications can be backdated to 2011, even if some of it was virtual care during the pandemic.
Who is eligible for the credits?
For someone to be eligible for the “Specified Adult Childcare Credits”, the carer (or grandparent) must be under the state pension age, which is currently 66.
Martin added: “You can’t get it if you’re already at state pension age, but if you’re at state pension age and you don’t get the full pension and you did child care before you hit state pension age then you can backdate it.
“So, if grandparents are looking after the kids they may be able to boost their pension.”
The child being cared for must also be under 12, or 17 if they have disabilities.
The carer must live in England, Scotland, Wales or Northern Ireland.
However, you won’t be eligible if you live on the Channel Islands or the Isle of Man.
Crucially, you’re only eligible if the child’s parent is entitled to child benefit and has a qualifying year for national insurance without needing the parent’s class 3 national insurance credits, which they receive automatically from child benefit.
You can check your national insurance record on the gov.uk website to see if you have gaps in your contributions.
What do I get?
How much you’ll get in credits depends on how long you’ve been looking after your grandchildren.
Each yearly credit is worth 1/35 of the value of the state pension, which is currently around £300 a year.
That means if you’ve been looking after your grandkids since 2011, you would expect to receive the full £3,300 towards your state pension.
To figure out how much you should get, just multiply the number of years you’ve been caring for your grandchild by £300.
How do I claim the credits?
It’s not so easy to get these credits as claiming them involves parents signing over their child benefit national insurance credit to someone else.
Only one grandparent or family member can receive the credit as well and the credit isn’t per child but per child benefit claimant.
As an example, if two grandparents care for their daughter and her child, there is only one credit available and the daughter has to decide which grandparent should have it.
But if the grandparents care for their daughter’s child and their son’s as well, there are likely to be two child benefit recipients.
You can apply for the credits using this form on the government’s website.
Once you’ve filled in your details, the child’s parent (or main carer) must also agree to your application by countersigning the form.
If you need any help, you can call the national insurance helpline on 0300 200 3500.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
