National Insurance credit scheme to tackle child benefit gaps

National Insurance credit scheme to tackle child benefit gaps

The government will legislate to allow parents who have not claimed child benefit, including those affected by High Income Child Benefit Charge (HICBC), to apply for top-up National Insurance credits.

The credits will be available for parents and carers, including those that fall within HICBC.

The measure is designed to ensure that people do not miss out on their state pension entitlement. The credit will add qualifying years of National Insurance where eligible which will support future state pension eligibility.

Individuals will be able to claim this credit from April 2026 and it will be backdated to cover anyone affected by the HICBC.

HMRC said that ‘eligibility for the credit will be closely based on child benefit eligibility criteria. Transitional arrangements will ensure those affected since 2013 are still able to claim.’

Going forward, individuals will be able to apply for six years following the relevant tax year.

This means that higher earners caught by the HICBC will be able to top up their national insurance where they may have gaps. Many earners above the £50,000 threshold opt out of child benefit rather than paying the tax charge.

From April 2026, those who are eligible can claim a credit to fill the gaps with arrangements being to set up to make sure those with gaps going back to 2013 won’t miss out. It’s a welcome step forward in resolving a saga that has added unnecessary complexity to people’s retirement planning.

The £50,000 threshold for HICBC has not changed since the charge was first introduced in January 2013, dragging more taxpayers into the charge.

Effectively this means that child benefit is means tested for high earners and it is incumbent on the taxpayer to advise HMRC of the liability.

The fact that the HICBC threshold has remained unchanged for a decade has brought more and more taxpayers within scope of the charge, to the extent that it is now likely to affect many middle earners.

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