A GRANDMOTHER has lost £ 800 in government pension payments due to a loophole other grandparents may miss.
Judy Lynch, 66, looked after her grandchildren for three years after retiring from teaching.
When she started applying for her state pension that year, she found that the 35 years it took to get the maximum amount was no longer enough for her.
But she realized that years of childcare could count towards her pension by applying for “certain adult childcare credits.”
These credits are used for your social security and can be requested by grandparents of statutory retirement age who look after children under the age of 12.
It is believed that millions of caregivers are already missing out on the little-known benefit that can top up the state pension.
Ms. Lynch says the three years of childcare credit would add an additional £ 800.49 to her state pension payments each year.
But after applying, she found that due to a confusing loophole in the rules, she was unable to get the credits and the extra money.
Your daughter was not enrolled for child benefit because she earned too much to get it, so Ms. Lynch will not have access to the credits.
The former headmaster told the Times, “At such a busy time in someone’s life soon after they had a baby, why should you waste time filling out a form to claim something you knew you did couldn’t get? Few would bother looking at the form, ”Lynch said.
Anyone making more than £ 50,000 cannot receive child benefit, but parents are still encouraged to register so they don’t miss out on these national insurance credits.
The credits act as a plug for any gaps in your social security contributions when you take time off from work to look after children.
The problem is, the rules introduced in January 2013 say parents will not get these vital NICs if they don’t claim child benefit.
These credits can generally be passed on to another family member who takes care of the child, such as Ms. Lynch.
To do this, the parent must first be registered, even if they are not entitled to child benefit.
Experts have previously warned that the confusing system does not make the effects of not applying for child benefit clear enough.
Ms. Lynch’s daughter has now signed up for child benefits, but HMRC will only date the credits back three months.
This gives her a zero pension boost since you need a full year of credit.
Steve Webb, former Secretary of State for Pensions and now a partner at LCP, told the newspaper, “For parents and grandparents, government insurance credits can be critical to protecting their statutory childcare pension rights.
“If a parent turns out to have failed, they should be able to backdate their claim. There is no reason for the draconian three-month deadline to backdate credits. ”
HMRC said it will give people the option to opt out of child support while continuing to receive national insurance credits.