Can YOU claim ‘grandparent credits’ towards your state pension?

Applications are now open for grandparents to receive state pension credit for helping with childcare during the year through April 2022.

A single credit adds £275 a year to a full state pension at the current rate, which is £185.15 a week or about £9,600 a year.

You can also make a claim backdated to 2011 – potentially up to £3,000 a year on retirement.

The option is available if you looked after children under 12 whose parents worked and did not need an addition for their own state pension in those years.

Parents must also have registered for child support, but not necessarily to receive the payments, as they can make a ‘credit only’ claim if a partner earns more than the £50,000 limit.

The option to claim the 2021/2022 credit didn’t open until October 1, as it takes time to finalize national insurance files, says former Pensions Secretary Steve Webb, who is now This is Money’s uncle.

“There is no rule on minimum hours, so even a grandparent who might drop a child at school and pick it up at the end of the day could qualify — and in lockdown, keeping them amused while Zoom counts.

“Even better, you can go back more than ten years if you’ve been doing this for a long time, so there’s a potential financial gold mine here for some grandparents.”

In the tax years 2019-2020 and 2020-2021, the ‘Zoomzorg’ or waiver provision applied to grandparents who helped with childcare by telephone or video during the corona measures while a parent was at work.

Webb, who is now a partner at pension consultant LCP, says informal childcare provided by another family member often allows a parent to go to work, especially given the high cost of formal childcare.

‘It is important that grandparents and other family members who provide this care do not harm their own AOW perspective as a result.

‘National insurance helps people protect their state pension while doing valuable work, such as caring for a child.

“Now that applications for 2021/22 are open, I would like to encourage anyone who thinks they may be eligible to apply. They also need to think about whether they have been entitled to anything since 2011.”

The government rules on grandparent loans and the application form are: hereand Webb gave a full rundown of what you need to know in a column This Is Money Here.

He says the most important things to remember are:

– There is no minimum number of hours and as long as the child’s parent confirms that the care was provided by another family member, that person can benefit

– These are National Insurance contributions for future AOW entitlements, so they only apply to those who are currently under retirement age

– Each year can add up to 1/35 of the full AOW pension to the carer’s final pension figure, and at current rates this is around £275 a year

– Signing over the NI credit costs the parent who goes to work and their own NI contributions do nothing – this NI credit is ‘saving’

– Provided the parent is either claiming child support, or even just claiming the NI credits – not the payments if they earn over the eligibility limit – the credits can be signed

– Although the person caring for the child will often be a grandparent, other relatives such as aunts and uncles can also apply.

Age UK also has a factsheet on its website here. The charity says: ‘If you are under state pension age, you may be entitled to a credit in lieu of an NI contribution if you are a grandparent or other adult relative who provides childcare for a child under 12.

“Grandparent credits must be claimed after the end of the tax year following the year in which you are entitled to the credits.”

The rules for grandparents are much less rigid than for mothers and fathers who apply for state pension to take care of children under the age of 12 themselves.

This is Money campaigns for parents who miss out on their AOW credits, if they don’t apply for child benefit because they don’t qualify for the benefit, or make innocent blunders, such as the ‘wrong’ partner working on their form. see the box above if this happened to you or someone you know.