NICs and unclaimed child benefit

Post by Mearns & Company in News

New legislation should ensure stay-at-home parents don’t miss out on pension entitlements.

Currently, a non-working parent of a child under 12 who claims child benefit can get national insurance (NI) credits towards their state pension. People need to pay NI, or receive NI credits, for at least 35 qualifying years to get their full state pension. However, if one parent earns over £50,000, the family becomes subject to the high income child benefit charge. The stay-at-home parent can still claim child benefit — and so get the NI credit — but the working parent then has a tax charge levied on their pay.

Many higher-earning families don’t claim this benefit, not realising this may impact the main carer’s future pension. The government has said it will now remedy this situation, so that this NI credit will be applied retrospectively to those who are entitled to it to ensure parents haven’t missed out.

If you think this could affect you, please contact us.

NICs top up deadline extended

The deadline for filling in gaps in national insurance contributions (NICs) records going back to 2006/07 has been shifted for a second time. On 12 June the government announced a second extension, pushing back from 31 July 2023 to a new deadline of 5 April 2025. Surprisingly, the government also confirmed that 2022/23 NIC rates would continue to apply to “all relevant national insurance contributions payments”.

The Financial Conduct Authority does not regulate tax advice. Tax treatment varies according to individual circumstances and is subject to change.