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DWP "must do more" to inform parents on low-or-no income that they could be missing out on pensions

28 September 2018

Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, has written to Rt Hon. Esther McVey MP, Secretary of State for Work and Pensions, about a risk that parents on low-or-no income could be missing out on National Insurance credits, and therefore State Pension entitlement.

Registering for Child Benefit builds up State Pension entitlement for parents of children under 12 who do not pay National Insurance contributions (e.g. because they decide to stay at home to look after their children). If the parent doesn't register for Child Benefit, they may forgo their entitlement to National Insurance credits, and therefore part of their future state pension.

The letter identifies a risk for households where one parent does not work, due to childcare commitments, but the other parent, who does work, is also the Child Benefit claimant. The parent who does not claim Child Benefit, therefore, will not receive the National Insurance credits for State Pension purposes.

Mrs Morgan has urged the Department for Work and Pensions ‘to do more to inform parents with low-or-no income that they can protect their entitlement to State Pension by transferring National Insurance credits from a spouse, partner or civil partner who claims Child Benefit.'

Chair's comments

Commenting on the correspondence, Mrs Morgan said:

"If the earning-parent in a household receives Child Benefit, rather than the parent with low-or-no income, the latter parent may be missing out on National Insurance credits, and therefore State Pension entitlement.

Households can either change the Child Benefit claimant from the earning-parent to the parent with low-or-no income, or the earning-parent is able to stay as the claimant and just the National Insurance credits can be transferred to the parent with low-or-no income.

DWP must do more to inform parents that either option will ensure that parents with low-or-no incomes don't miss out on their pension entitlement."

Further information

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