MILLIONS of grandparents who look after their grandkids could be missing out on £250 a year, new figures have revealed.
The help given doesn't need to be in person either as grandparents looking after children on the phone or by video while their parents are working can claim valuable tax credits.
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The government has changed the rules around these credits because many grandparents aren't currently able to visit their grandchildren because of the coronavirus pandemic.
Now, the care given by grandparents, or other family members under state pension age, to children aged under 12, can be over the phone or by video.
A statement on the GOU.UK website says: "Since March 2020, your normal caring arrangements may have been affected by coronavirus (Covid-19).
"If you have provided care in a different way, for example over the telephone or video, you can still apply for national insurance credits for the financial years 2019 to 2020 and 2020 to 2021."
These credits are known as "specified adult childcare credits" and they count as a national insurance credit for those who don't otherwise work.
The reason this is important, is because you need at least 10 years' worth of credits to qualify for the state pension, and at least 35 years' worth to get the full £8,767.20 a year.
So miss out on just a year's credit, and pension experts at financial provider Royal London say that's an annual loss of £250.
And that could rise to a whopping £5,000 over a typical 20-year retirement.
Can I apply for tax credits to look after grandchildren?
YOU can apply for specified adult childcare credits if:
- 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 live in 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 national insurance 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 and you can have their class 3 national insurance credit for the period stated
But while a Freedom of Information request by Royal London reveals that 17,789 people have claimed the benefit in the past 19 months, it reckons millions could still be missing out.
Steve Webb, director of policy at Royal London and a former pensions minister, says the number of people who have claimed is just a "drop in the ocean".
He said: “While it is great news that thousands more grandparents are now benefiting from this scheme, the numbers are still a drop in the ocean out of all those who could benefit.
"It is increasingly common for grandparents to spend some time each week looking after their grandchildren, often to enable a parent to go out to work.
"It would be quite wrong if these grandparents suffered financially in terms of their own state pension as a result.
"This scheme needs to be much better publicised and I would encourage any family with a grandparent under pension age who helps out with the childcare to find out more."
The problem is that these credits are complicated – to get them involves parents signing over their child benefit national insurance credit to someone else.
Of course, parents should only do this if they're already in work or earning credits another way themselves.
You should also be aware that only one grandparent or family member can receive the credit and the credit isn't per child, but per child benefit claimant.
So if, for example, two grandparents care for their daughter and her partner’s two children, there is only one credit available and the daughter will have to decide which grandparent should have the credit.
How to apply for these credits
HERE'S how to apply for specified adult childcare credit:
You can apply for them using this form on the Government's website – and you can claim all the way back to April 6 2011.
But be aware that you can't claim for the most recent tax year until the following October.
So you can't claim for the 2018/19 tax year, for example, until this October 2019.
If you need any help you can call the national insurance helpline on 0300 200 3500.
But if the grandparents care for their daughter’s child and their son’s child, there are likely to be two child benefit recipients – one for each set of parents.
So then there would be two national insurance credits available for transfer.
A spokesperson for the Department for Work and Pensions said: “The number of people receiving specified adult childcare credits has risen substantially since they were introduced in 2011.
"We encourage everyone who might benefit to apply for the credits to which they’re entitled and extensive information on how to apply can be found on GOV.UK.”
But it's not just grandparents who may be missing out. Parents who aren't working also need to make sure they claim child benefit to build up national insurance credits.
Meanwhile, it's thought that over 300,000 families are missing out on tax-free childcare worth up to £2,000 a year per child.
People approaching state pension age may also be missing out on pension credits and housing benefit worth £7,000 a year.
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