Childcare loophole has lost one retiree £ 800 per year


A 66-year-old woman explained that she lost more than £ 800 a year in pension due to a loophole in the rules on family allowances.

Judy Lynch, 66, urged others to be aware of the problem so that they don’t miss it either.

The setup means Judy is not entitled to the state’s full pension of £ 179.60 per week, reports The Mirror.

The problem started because Judy, a retired teacher, did not earn enough National Insurance credits during her working life to qualify for a full pension.

The amount of pension you receive, along with some benefits, is based on whether you earn enough credits through your job or self-employment.

You need 35 years of NI contributions to get the total amount of £ 179.60 per week.

Anyone in difficulty who has grandchildren can apply for “specified adult child care credits” if they are caring for children under the age of 12.

Parents transfer their NI family allowance credits to someone else so that they can be counted towards their state pension.

But Judy’s daughter was not on family allowance because she was earning too much to get it, which means Judy did not get the credits.

People are encouraged to sign up for the benefit, even if they are not eligible for the money, to get NI credits.

Judy says three years of childcare credits would have added an additional £ 800.49 to her state pension payments each year.

Her daughter has now registered for child benefit, but HMRC will only backdate the credits for three months.

Judy told The Times: “At such a busy time in someone’s life, right after having a baby, why would you waste time filling out a form to claim something you knew you couldn’t get?

“Few people would even bother to look at the form.”

Previous research by investment and savings firm Hargreaves Lansdown shows that grandparents risk missing more than £ 53,500 during a 20-year retirement by not transferring NI credits.

The HMRC said parents and caregivers have the option of receiving family allowances, while continuing to receive national insurance credits.

You can claim “Specified Adult Child Care Credits” using Form CA9176 on the website.

You and the parent transferring the credit will need to sign the form, so you must agree that you are happy to go ahead with the transfer.

Only one grandparent or family member can receive the credit – and the credit is per family allowance claimant, not per child.

Moms and dads should only transfer their NI credits if they are working or earning credits on their own in some other way.

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