Child benefit can increase your state pension by thousands – but beware of simple mistakes | Personal Finance | Finance

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This benefit of Child benefit applies to those whose children are under 12 years of age. If the applicant does not work or if they do not earn enough to pay social security contributions, child allowance can provide social security credits, which are included in state pension.

Even if a person does not claim child allowance, those who are entitled can still receive the social insurance credits.

But it may be that some people accidentally miss something, for example if they are affected by the tax on high-income earners for child allowance (HICBC).

This fee affects those with an individual income over £ 50,000, where the benefit is lost entirely through tax if a person earns £ 60,000 or more.

Due to the tax, some people may decide to opt out of child support altogether to avoid having to submit a self-declaration.

READ MORE: Do not reduce your pension – how do you make your savings last as long as you do

But in order to receive the social insurance credits, eligible persons must fill in and send out the application form.

There is an option on the form to waive the payment but still get the lift to the state pension.

By August 2020, 624,000 families had opted out of receiving child allowance.

“The £ 50,000 threshold has not changed since 2013, which means that more and more families are catching up as incomes increase,” said Sean McCann, Chartered Financial Planner at NFU Mutual earlier this year.

DO NOT MISS

“While some choose to repay the benefit, many more with incomes over £ 60,000 who lose all their child support through the tax choose to receive the payments in full.

“Because the tax contribution is based on income after pension contributions, many families can take themselves out of the contribution and continue to receive child support by increasing the amount they pay into their pensions.”

McCann also issued a warning about the importance of signing up for child support before opting out of receiving payments.

“It is crucial for families who do not want the hassle of repaying child support still registering a claim before opting out of receiving payment,” he said.

“This ensures that a non-working parent receives a national insurance credit, which helps protect their state pension rights.”

In addition, he stressed the importance of the non-worker, or low-income earner, making the claim.

“It’s important that the claim is made by the non-performing payment, rather than the high-earning partner,” McCann said.

“Families with non-working parents who do not register for child support can count on the cost for many years to come.”

How much is child support?

There are two different child allowance rates, with the amount depending on who the allowance is for.

For the oldest or only child, the weekly price is currently £ 21.15.

It is £ 14 per child and week for any additional children that may be available.

If a person receives too much or too little payment, it is important to hire the child allowance office.

The benefit ceiling can affect the total amount of benefits a person receives, and this includes child support.