I read your last column about qualifying years for the state pension. I am due to get my pension after my 66th birthday this September.
The assessment of my pension includes NI contributions up to April 2021. I have more than the full number of years required.
This includes several recent years of Specified Adult Childcare Credits since 2016 because of providing childcare for my grandson, in lieu of me making voluntary contributions as I am not working.
Turning 66 soon: Why won’t the DWP add my final state pension grandparent credit yet?
These credits are helping me fill the hole left by being contracted out for a portion of the state pension through my local government pension contributions.
The issue is this. I want to claim ‘specified adult childcare credits’ for the year 2021-22. I made a claim in June because I knew they would be calculating my pension even though the website does advise not applying till the end of October, as not all relevant NI contributions (usually for the mother in these cases) are not evident till then.
However, my claim was rejected because of the information being not generally available till later. They did not agree to keep my application on file and said I have to apply again at the end of October.
I have concerns about that. To my knowledge, if I was paying voluntary contributions myself, I would not be able to backfill them in this way, after my pension commenced, so I am not feeling confident that they will allow my claim for credits after October.
The person I spoke to appeared reluctant to categorically confirm that the claim could be considered after my pension commences.
I asked if I could have some information in writing, or by email to confirm that I was asking for this before my pension commenced, but was told no, although he did say there would be a record of our conversation and to note down the time and date of it.
I would appreciate some clarification on this if you can help in any way. It seems that, as per previous years, I will be entitled to these credits, but that the bureaucratic system is stopping me claiming them at this point in time.
Can you confirm at all that these sorts of claims can be considered for the previous year, even after pensions commence? Otherwise I will lose out on a year’s contributions.
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Steve Webb replies: It is good news that the National Insurance credits available for certain grandparents and others are now much more widely known, but the way they work still creates some confusion.
Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below
I’m happy to help clarify how the system works, but in short, there should not be a problem in getting them added to your record as long as the caring itself was done before you reached pension age.
To recap, the idea behind what are commonly called ‘grandparents credits’ is that quite often in a family a mother or father with young children is able to go out to work because another family member looks after the children for part of the week.
As the parent is likely to be earning a wage and paying their own National Insurance, the credit which they also get for being on child benefit with a child under 12 is ‘going spare’, provided they are actually claiming child benefit or at least the credits which go with it.
Under the system (known formally as ‘specified adult childcare credits’), the parent can fill in a form to confirm that another family member (excluding a spouse or partner) is looking after a child for part of the week, and sign over the credits to that person.
As long as the family member is under pension age throughout the year in which they were doing the caring, they are entitled to receive the credits.
There is no minimum number of hours of care, but the credit can only be transferred to one family member. There is also no deadline by which claims have to be made but – as you have discovered – they cannot be made *before* the October after the end of the relevant tax year.
I am sometimes asked by grandparents and others if doing this causes the parent to lose out.
They do not need to worry about this, because the credit is going spare. The parent is getting a year towards their state pension if they are working and paying NI, so it costs them nothing to sign over the credit to someone else.
Turning to your specific situation, the reason you have to wait until October to claim for the previous financial year is that it is only once the National Insurance records for the previous tax year have been loaded onto the computer that HMRC know if the credit is spare or not.
For example, the parent might work only part year and not pay enough NI in their own right to get a qualifying year for their own pension. In this case they would lose out by signing over their credit.
You do not need to worry about the fact that you will be over pension age by the time you can make a claim. You did the caring before you reached pension age so you are eligible provided the other conditions are met.
Once a successful claim is made, this will be added to your NI record, and your state pension should then be recalculated to take account of this additional year.
If you don’t also receive arrears, you should check this with the Pension Service.
You can read more about how to claim here: Specified Adult Childcare credits fact sheet.
Ask Steve Webb a pension question
Former Pensions Minister Steve Webb is This Is Money’s Agony Uncle.
He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement.
Steve left the Department of Work and Pensions after the May 2015 election. He is now a partner at actuary and consulting firm Lane Clark & Peacock.
If you would like to ask Steve a question about pensions, please email him at email@example.com.
Steve will do his best to reply to your message in a forthcoming column, but he won’t be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.
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If Steve is unable to answer your question, you can also contact MoneyHelper, a Government-backed organisation which gives free assistance on pensions to the public. It can be found here and its number is 0800 011 3797.
Steve receives many questions about state pension forecasts and COPE – the Contracted Out Pension Equivalent. If you are writing to Steve on this topic, he responds to a typical reader question here. It includes links to Steve’s several earlier columns about state pension forecasts and contracting out, which might be helpful.
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