Question about Child Benefit payments

Graeme7777

Hi,

When registering for Child Benefit, is there any advantage to having the money paid to one parent rather than the other? For example, where one parent is in full-time, formal employment while the other stays at home to look after the child.

Thanks!

mitchaa

None what so ever, as it's not a tax deductable income.

seven-day-weekend

Yes actually there IS a large advantage. If you have it paid to the non-working parent, it will give them credits towards their State Pension as they will not be paying any NI. MOST important!

Chazpots

It is essential that the parent at home receives the child benefit. It does not give you credits towards the state pension but something called Home Responsibilities Protection is put in place. Complete years of HRP are taken off the actual number of qualifying years needed for your pension. HRP is automatically put on records as a result of the child benefit claim.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Caringforsomeone/DG_10018691

Hope this helps,
Chaz

seven-day-weekend

Chazpots wrote: »

It is essential that the parent at home receives the child benefit. It does not give you credits towards the state pension but something called Home Responsibilities Protection is put in place. Complete years of HRP are taken off the actual number of qualifying years needed for your pension. HRP is automatically put on records as a result of the child benefit claim.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Caringforsomeone/DG_10018691

Hope this helps,
Chaz

This is, IIRC, under the old rules for people reaching retirement age before April 6th 2010.

I'm pretty sure that people retiring after this date will have credits.

I assume that seeing as the OP is receiving Child Benefit, he/she is not about to reach retirement age just yet.

But under either set of rules, it is very important to have the Child Benefit paid to the non-working parent.

Hope this helps.

Graeme7777

Thank you all very much!

Alleycat

We were going to switch the Child Benefit to OH when he was looking after dd for a while and it was talking about Home Responsibility Protection.

Chazpots

Thanks SDW I've learnt something new. You're right, from 6/4/10 NI credits will be given to the main payee of child benefit. Not only that but previous years of HRP will be converted into credits! This is great news for those of us sat home parents.
.
Parents and carers Working and caring will be recognised equally in the reformed State Pension scheme, with more women and carers being eligible for a full basic State Pension and for State Second Pension.
From 6 April 2010, more people who are not paying National Insurance contributions will be able to build up entitlement to basic State Pension and State Second Pension through a new weekly National Insurance credit. The people who will be eligible for these new credits are:

• people who are getting Child Benefit for children up to the age of 12
• approved foster carers
• caring for at least 20 hours a week for people who are getting Attendence Allowance, Disability Living Allowance (the middle or highest rate care component) or Constant Attendence Allowance
• having caring responsibilities for at least 20 hours a week for other people who need care. The details are still being developed.

People who pay National Insurance contributions for part of a tax year and qualify for the new credits for the rest of the tax year will be able to combine them to gain a qualifying year for basic State Pension and State Second Pension.
Home Responsibilities Protection (HRP), which is only given for full tax years, will be abolished. Past years of HRP (up to a maximum of 22) will be converted into qualifying years of credits which will count towards basic State
Pension.
Chazpots

Chazpots

erm...didn't mean "sat" home parents but "at" home parents....bit of a slip there!!!!

seven-day-weekend

Yes Chazpots it is good news. As is only having to have 30 years worth of contributions to get full state Pension after 2010.

No longer will us females treated like second-class citizens!

( I am one of the last women who can get their full State Pension at 60. Under the old rules (as I reach retirement age in January 2010) I have to have 39 years paid or credited. I'm glad to say that with the HRP deduction I only have to have 26 years and that to get that I have 24 years paid through employment and two year's voluntary contributions).