Keeping up entitlement to your State Pension - National Insurance Credits for Parents

As a new mum, the last thing you are probably thinking about is your State Pension – that time seems such a very long way off!   But here’s something you probably weren’t aware of that may just be of interest.

The National Insurance (NI) you pay via your employer or as self employed, (among many other things) contributes to your entitlement to a State Pension when you retire. 

During your maternity leave, if you decide to stay at home and not go back to work, or if you earn below the threshold for paying NI when you go back to work, you will not be making any NI contributions.  Potentially you could have years of no contributions which would have a negative effect on the money you would be entitled to in your old age. 

Fear not!  There is a little known system in place to fill in the gaps where you may not be paying National Insurance. 

Known as “Credits for Parents” (formally “Home Responsibilities Protection”), the government ensures that NI contributions are credited to you account so that you hold your entitlement to a State Pension.

Better still, you don’t have to do a thing!  You are automatically enrolled onto the system when you start receiving Child Benefit.

For more information visit:

www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/DG_183802

Or phone:

Pension Service Helpline on 0845 606 0265

This week’s post was suggested by Emma Rosser AKA

www.facebook.com/home.php#!/DottyMayscrafts

Thank you, Emma!

        

If you have a money related subect you'd like me to cover, please leave a comment.

Child Benefit

You normally qualify for Child Benefit if you have children under 16 (or under 20 if in certain types of education or training), but you do have to apply for it.

You should receive an application in the useful Bounty Pack you are given in hospital when your baby is born (or your midwife will pass you one). 

You can also print off a form here:

www.hmrc.gov.uk/forms/ch2-online-stubb.htm

Applying is pretty straight forward.  You will need to send the original birth certificate with the application form so make sure you register your baby first.

Make sure the form is one of the first things you complete in those first few weeks of parenthood.  If you leave it, you may be missing out on valuable pennies as they will only back date payments for 3 months.

Once it’s completed, send your form and baby’s birth certificate to:

Child Benefit Office (Washington)
Freepost
NEA 10463
PO Box 133
Washington
NE38 7BR

HELPLINE NUMBER:  08453 021 444

The current weekly rates for Child Benefit are:

£20.30 for your first/oldest child

and

£13.40 for other children

It is paid  until the child is either 16 or 20 if he/she is in full time education (up to A Level or equivalent or certain training courses).

The money is usually paid directly into the mother’s bank account on a monthly basis.

                        



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Paternity Pay and Leave

New Dads (or the partners of new mothers) are entitled to 2 weeks Ordinary

Paternity Leave when the baby is born and may be entitled to Ordinary

Paternity Pay while they are away from work.

To qualify for Ordinary Paternity Leave, he must have been with his employer

for at least 26 weeks by the end of the 15th week before the baby is due.

He must also be either the:

• Biological Father

or

• Mother's husband or partner (including same-sex relationships)

He needs to let his employer know he wants to take paternity leave by the

fifteenth week before the baby is due.

A Self Certificate (form SC3) to pass to his employer can be printed off from

the HMRC website:  

www.hmrc.gov.uk/forms/sc3.pdf



Ordinary Paternity Leave should either be taken as 1 week or 2 consecutive

weeks. It can not be split.

Paternity leave can not start until the baby is born and must be taken within

56 days of the baby being born.

 

Ordinary Statutory Paternity Pay (OSPP)

If the father/partner qualifies for Ordinary Paternity Leave, and earns more

than £102 a week, he qualifies for Ordinary Statutory Paternity Pay (OSPP)

too.

This is paid at £128.73 per week or 90% of his average weekly earnings if

they are less than this.

Additional Paternity Leave & Pay

From April 2011, fathers/partners could also have the right to up to 26 weeks'

Additional Paternity Leave if the child's mother has returned to work before

the end of her Statutory Maternity Pay period. This is in addition to the 2

weeks Ordinary Paternity Leave they are entitled to.

He may also receive Additional Statutory Paternity Pay if the child's mother

has returned to work before the end of her maternity pay period.

Additional Paternity Leave can be taken from 20 weeks after the child is born.

It must finish before the child's first birthday.

Additional Statutory Paternity Pay is paid at the same weekly rate as the

OSPP and can be paid for a maximum of 19 weeks (to complete the Statutory

Maternity Pay period of 39 weeks for the mother).

 

Self Employed New Dads

Unfortunately, there is no paternity pay equivalent for self employed dads (which is rather unfair I think!!).

For more information visit:

http://www.direct.gov.uk/en/Parents/Moneyandworkentitlements/WorkAndFamilies/Paternityrightsintheworkplace/index.htm

 

A great website for dads-to-be and new dads is:

http://www.dad.info/

                        



www.zestpayroll.co.uk