Grandparents and other family members who take time off work to look after grandchildren under 12 can claim Specified Adult Childcare Credits that count towards their state pension. A recent report reveals that due to poor awareness, the scheme has received little take up.
A freedom of information request to HM Revenue & Customs (HMRC) by Royal London indicates that up to 100,000 grandparents could be missing out where they have made sacrifices to help their children get back to work after the birth of a child.
Specified adult childcare credits can be claimed where a mother returns to work after childbirth to allow grandparents or other family members to receive National Insurance credits towards their state pension for looking after the child (for so long as the child is under 12).
Claiming the credits ensures the child carer retains entitlement to their state pension rights where they look after a child instead of being in paid work. Each year of childcare would otherwise cost them 1/35th of the full rate of state pension, amounting to £231 per year.
Many families rely on the support of grandparents to allow them to combine work and family life, but the childcare credits scheme has not been particularly well advertised by the government.
More information about the scheme is available on the government website, along with a form that can be used for claiming the credit.
If you would like to discuss the scheme or other tax issues, please contact a member of our personal tax team, or your usual Bishop Fleming advisor.
Philip Hammond's Spring Budget, with its U-Turn on National Insurance Contributions (NICs), alienates the very businesses the government should be encouraging, claims Top 40 accountants, Bishop Fleming. Matthew Lee, Managing Partner at Bishop Fleming, described…