27 April 2023
If you are covering the news that the government intends to fix the problem of parents accidentally not claiming Child Benefit and then suffering a lower State Pension, please see the following comment from Shaun Moore, tax and financial planning expert at Quilter:
"The government have finally pledged to address the issues surrounding parents who have not claimed Child Benefit subsequently missing out on the full state pension amount due to missed NI contributions.
"It is laughable that the rules dictate that you must claim Child Benefit as soon after your child’s birth as possible and can only backdate it by three months. Most parents can attest that the first few months after a baby is born is a blur without having to worry about filing in paperwork on top. This is a problem that has plagued the system for years, and it is astounding that it has taken this long to address it. The government now intends to legislate to allow eligible individuals to retrospectively claim National Insurance credit with more detail set to be published.
"Child Benefit is not an automatic entitlement; instead, parents must actively apply for it, a process which many find confusing and cumbersome particularly during what can be an incredibly stressful time. This means that thousands of parents have missed out on claiming their rightful benefits over the years, either due to a lack of awareness or the daunting prospect of navigating the bureaucratic maze with a screaming baby in your arms.
"Parents who do not claim Child Benefit may not receive the NI credits they are entitled to, thereby reducing their state pension when they reach retirement age. This is especially problematic for stay-at-home parents or those with low incomes, who rely on these NI credits to maintain their pension entitlement.
"For decades, the potential repercussions of not claiming Child Benefit have not been made clear to the public. Many parents have been left in the dark, unaware that their decision to forgo claiming child benefits could impact their future financial stability. It is only now that the government has decided to take action."
