A simple guide to Specified Adult Childcare Credits

A ‘Specified Adult Childcare Credit’ is a type of Class 3 National Insurance (NI) credit that can be awarded to eligible family members – typically grandparents or relatives – who provide care for a child under 12, while that child’s main carer works.

They can only be transferred if the main carer (usually the child’s parent) doesn’t need the NI credit themselves and they agree to the transfer.

NI credits are very useful. The government counts how many of them you have collected up in your life and they use that number to decide if you’re eligible for certain state benefits – most importantly, the State Pension.

If you’ve already banked all the NI credits you need, and someone who helps to look after a child doesn’t yet have enough (maybe because they had gaps in their employment or lost credits by taking time off work due to caring responsibilities), gifting your extra NI credits can help them top up their own account without either of you needing to pay a penny.

You can apply for these transferred NI credits if everything in this list applies to you:

• You are a family member (e.g., grandparent, aunt/uncle, non-resident parent, sibling, or related partner), aged 16 or over, but under State Pension age
• You live in the UK
• You have provided, or are providing, care for a child under the age of 12
• The child’s parent or main carer claims Child Benefit, they agree to transfer it to you, and they don’t need the NI credit themself.

It is not in the best interest of a parent (or other main carer) to transfer their NI credits to another person if they need them themselves to build their own State Pension entitlement.

That’s why it’s really important to understand what each person needs to be entitled to the State Pension:

• You will need at least 10 years of NI contributions or credits to qualify for any State Pension.
• You will need 35 years’ of contributions to receive the new, full State Pension.

Here are a few examples of when it isn’t a good idea to use the Specified Adult Childcare Credits scheme:

Mum/Dad/Main Carer doesn’t have a full NI year: If the parent hasn’t worked enough or been credited enough in that tax year to get a qualifying year, they will need the NI credit they can get by claiming Child Benefit. Transferring it to someone else would leave them short.

Mum/Dad/Main Carer is working towards 10 years’ credits: without 10 years, they can’t claim the minimum State Pension later in life.

Mum/Dad/Main Carer is working towards 35 years’ credits: Only once they’re already at 35+ years does it make sense to consider transferring. That’s because anything after 35 years doesn’t make a difference.

Mum/Dad/Main Carer thinks they may take time off work in years to come: If the parent thinks they may not work full-time in future (for example, they plan to have another child, or take a career break), it may be sensible for them to hold on to NI credits while they can.

You’ll need to log-in to your Personal Tax Account at: https://www.gov.uk/personal-tax-account

You should be able to see your National Insurance record there. That will show you:

• How many qualifying years you have
• If you have any gaps

No, you do not have to apply for Specified Adult Childcare Credits in the same tax year you provided the care. For more details on this, request access to our free guide (above). There are more details in there.

No. Once the credit is transferred and accepted, it can’t be reversed. That’s why it’s important to check carefully before signing up.