My state pension record has a big hole in the time I was looking after my child – Steve Webb replies

I worked from the age of 17 and stopped working at 38, when my child was born.

At the time my husband and I were not claiming child benefit as my husband’s salary was over £65,000. However, we did complete a form stating that I would like my contributions to continue.

When my husband became redundant in 2022, he checked his national insurance contributions and they were completed in full for each tax year. No problem.

He told me to check mine and I was shocked that my contributions from mid-2014 to 2021 were low. I have to tell you that I got a small part-time job in 2021.

Of course I called the DWP directly who were less than helpful and told me I would have to pay for the missing years.

I was under the impression that because I had a child, my contributions would not have been affected.

I am now receiving child support, which only goes back three months from February 2022 to the current date.

My husband now has a new job, but due to childcare problems, I quit my job in March of this year. I still receive child benefit, which we have to repay in full and submit a tax return.

I made complaints to the DWP and no one ever got back to me. It just doesn’t seem fair that we felt like we were doing the right thing by not claiming any money, but now I’m being punished. Can you point me in the right direction on what to do next?

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Steve Webb replies: You have been hit with something officially known as ‘High Income Child Benefit’.

Simply put, if someone receiving child benefit earns more than £50,000 a year, or if their partner earns more than £50,000, compensation must be paid.

The rate is 1 percent of the value of your child benefit for every £100 of annual income above the £50,000 threshold.

This means that, for example, someone with an income of £55,000 per year will have to pay 50 percent of child benefit, while someone with an income of £60,000 per year (or more) will have to pay 100 percent of child benefit. .

Note that the way the system works is that child benefit is paid in full to the person who is entitled to it, but the benefit must be paid by the person in the family who is the highest earner.

Higher earners must complete a tax return so that HMRC knows they are part of a family receiving child benefit and that the levy can be collected.

To prevent people from receiving money with one hand (in the form of child benefit) and having it taken away with the other (in the form of a high income tax), families will be given the opportunity to opt out of child benefit payments.

However, there is a catch. One of the benefits of receiving child benefit for a child under 12 is that you automatically receive valuable National Insurance contributions towards your state pension.

If you simply do not receive child benefit, you risk damaging your national insurance information.

To avoid this, HMRC is giving families an additional option: only receiving National Insurance credits, but not child benefit. This protects your state pension record without the hassle of receiving benefits and then paying a tax bill.

From what you’ve said, it sounds like you did indeed ‘tick the box’ to say you only wanted NI credits. If so, they simply made an administrative error that can hopefully be corrected.

I have raised your case with HMRC and it is said that no evidence of your initial child benefit claim can be found, but I am continuing to investigate this to see if we can resolve the issue.

But keep in mind that even though we’re talking about benefits (child benefit) and your state pension, it’s actually HMRC who handles all of this. It is possible that your complaints to DWP have therefore gone nowhere.

A bigger problem affects those who were not aware of the “credit only” option and simply did not apply for child support at all.

In this case, there is a risk that they will miss out on NI credits for years and receive a lower state pension after retirement. As you have discovered, anyone who reapplies for child support can only file their claim retroactively for three months, and the rest of the period remains blank on their file.

The good news is that Chancellors of the Exchequer and DWP have finally accepted that this is an issue that needs to be addressed.

In April 2023, they announced that they wanted to set up a system to repair the car damage to the national insurance data of people in this situation.

One way this could be done is to create a new category of NI credits for those who could have claimed child benefit but did not.

While this announcement is very welcome, we have not yet heard any further details. I hope that ministers will soon set out how they intend to tackle this issue.

If this is not addressed, many tens of thousands of parents – especially mothers – could face a significant income shortfall in retirement.

If your claim cannot be found and the hole in your claim is not resolved after my investigation, hopefully it will eventually be resolved this way.

What does the government say?

A spokesperson for HMRC told us it continues to encourage all parents to claim child benefit, regardless of their income, to ensure they receive the associated National Insurance credit.

The government announced in April that eligible parents who have not claimed child benefit can apply for National Insurance credits retroactively.

The company has not released an update since then, but further information on this change, including eligibility, will be available in due course.

Parents claiming child benefit, including those who choose not to receive payments, will automatically receive NI credits until their child turns 12.

If you claim child benefit, the payments and associated NI credit can currently be paid backdated for up to three months.