GRANDPARENTS could be missing out on hundreds of pounds a year for caring for their grandchildren.

Families looking to cut expensive childcare costs during the cost of living crisis are turning to relatives for help.

But many grandparents don't realise they can be financially compensated for their time.

Figures from HMRC show that fewer than 16,000 eligible grandparents have signed up to the scheme.

Grandparents could be eligible for extra credits worth £275 a year by the government.

These credits are known as "specified adult childcare credits" and they count as a national insurance (NI) credit for those who don't otherwise work.

This is important because you need at least 10 years' worth of NI credits to qualify for the state pension, and at least 35 years' worth to get it in full.


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Pensions expert Steve Webb, partner at consultants LCP said: "It is only right and proper that this family care is recognised and that grandparents claim the credits which may be available towards their state pension.

"Even one year of looking after a grandchild can add thousands to your state pension over the course of your retirement, so it is well worth making a claim”.

How to check if you're eligible

To be eligible, the carer must be under state pension age, which is 66 years old.

The child must also be under 12 years old, or 17 if they have disabilities.

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To claim, you must live in England, Scotland, Wales and Northern Ireland, but not the Channel Islands or the Isle of Man.

Plus, you're only eligible if the child's parent is entitled to child benefit and has a qualifying year for national insurance without needing the parent’s class 3 national insurance credits which they receive automatically from child benefit.

There is no minimum requirement for the number of hours of care to qualify.

And if you looked after your grandkids remotely during lockdown, you can also still claim.

You can check your national insurance record on the GOV.UK website to see if you have any gaps in contributions.

How much can you claim?

How much you'll get in extra credits depends on how long you've been looking after your grandchildren.

Each yearly credit is worth 1/35 of the value of the state pension, which is currently around £275 per year.

This works out at around £5,000 over a a 20-year retirement.

You can also backdate claims from as far back as 2011.

So if you've been taking care of your grandkids since 2011, you could get around £3,000 towards your state pension.

To calculate how much you'll get, simply multiply the number of years with £275 to get a rough idea.

How to claim the credits

These credits are complicated as getting them involves parents signing over their child benefit national insurance credit to someone else.

Of course, parents should only do this if they're already in work or earning credits another way themselves.

You should also be aware that only one grandparent or family member can receive the credit and the credit isn't per child, but per child benefit claimant.

So if, for example, two grandparents care for their daughter and her partner’s two children, there is only one credit available and the daughter will have to decide which grandparent should have the credit.

But if the grandparents care for their daughter’s child and their son’s child, there are likely to be two child benefit recipients – one for each set of parents.

So then there would be two national insurance credits available for transfer.

You can apply for the credits using this form on the government's website.

Applications for Specified Adult Childcare Credits can be made from the October after the tax year the credits are being applied for.

Once you've filled in your details, the child’s parent (or main carer) must also agree to your application by countersigning the form.

If you need any help you can call the national insurance helpline on 0300 200 3500.

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