Specified Adult Childcare care credits are a way for grandparents and close family members to top up their pension when looking after a relative’s child. Let’s take a look at how it works, who can claim and how you get started.
Long gone are the days when one parent could stay at home whilst the other went out to work. In 2019, 75.1% of mothers and 92.6% of fathers with dependant children worked. This means that many working parents have to rely on others to cover gaps in childcare.
Although schools and nurseries can often fill in most days, early mornings and evenings can be an issue. That’s why some families turn to grandparents and close family members to help during these awkward times.
The government has acknowledged the effort put in by these caregivers and offers a scheme that will allow them to receive some financial compensation. This is known as Specified Adult Childcare credit.
But it takes quite a bit to wrap your head around, so I’ll try to explain it the best I can.
What are Specified Adult Childcare credits?
A person in receipt of Child Benefit can transfer the National Insurance credit part of the Child Benefit (known as Class 3 NI credit) to a family member who is providing care for a related child under 12. This increases to 17 if they have disabilities. It was introduced back in April 2011.
What are National Insurance credits?
So, what exactly are NI credits and why are they important? Nearly anybody that works pays National Insurance, which is also converted into credits. If you’re not working, you usually won’t be making NI contributions.
Class 3 NI credits are important because it helps you to build up your qualifying years when it comes to claiming your state pension. The more credits you have, the higher your pension will be. If you pay in for 35 years, you’ll qualify for a full state pension.
If you receive child benefit, this payment can qualify for NI credits.
Why would you transfer this?
If you’re already working, you’ll be receiving NI credits. The credits from the child benefit payment probably won’t be of any use to you. But pass them on to a family member and these extra credits they earn whilst looking after your child can boost their pension. Each extra credit can increase an annual pension by £250.
But… this won’t benefit everybody.
Any childcare giver currently in work won’t need to boost their NI credits. Nor will anyone that has retired and is already in receipt of a full state pension. Equally, if a person hasn’t retired but has 35 years of NI credits, Specified Adult Childcare credits won’t be of any use.
Who qualifies to claim?
Taken from the government website, you need to meet the following criteria:
- you are a grandparent, or other family member caring for a child under 12
- you were over 16, and under state pension age when you cared for the child
- you are ordinarily resident in the United Kingdom, meaning England, Scotland, Wales and Northern Ireland, but not the Channel Islands or the Isle of Man
- the child’s parent (or main carer) is entitled to Child Benefit and has a qualifying year for National Insurance without needing the parent’s class 3 NI credits which they receive automatically from Child Benefit (they can check their National Insurance record online to see if they have any gaps in contributions)
- the child’s parent (or main carer) agrees to your application by countersigning the form to confirm that:
- you cared for their child for the period stated
- you can have the Class 3 NI credit for the period stated
And who counts as a family member?
I’ve mentioned grandparents quite a lot, but plenty of family members qualify:
- 1) a parent who does not live with the child
- 2) grandparent, great-grandparent or great-great-grandparent
- 3) brother or sister
- 4) aunt or uncle
- 5) husband or wife or former husband or wife of anyone in 1 to 4
- 6) civil partner or former civil partner of anyone in 1 to 4
- 7) partner or former partner of anyone in 1 to 6
- 8) son or daughter of anyone in 5 to 7
- 9) in respect of the son or daughter of anyone in 4, that person’s:
How far back can you claim?
You can date your claim as far back as April 2011.
How do you claim?
You will need to complete form CA9176. This requires:
- personal details of the applicant – the family member caring for the child
- child’s details and the periods of care
- personal details of the child’s parent (or main carer) – the Child Benefit recipient
- applicant and the parent must both sign their declarations on the application
If you’re a working parent, why not take a look at how you can claim free childcare?