HMRC has issued a warning to thousands of parents missing out on free cash to cover the costs of having a child.
It comes after the amounts households can receive increased by over 6% this month.
AlamyThousands of parents are missing out on Child Benefit[/caption]
Child Benefit is paid to parents to help cover the costs of childcare.
But thousands are missing out on the cash boost by not claiming it, according to the latest figures from Policy in Practice.
In a recent X post, HMRC, which is responsible for issuing Child Benefit payments, urged those not claiming to apply.
It said: “Claim Child Benefit on the HMRC app or online.
“You could claim up to £1,331 a year in Child Benefit for your first child and £881 a year for any other children you have.”
Claiming Child Benefit also qualifies you for National Insurance (NI) credits which count towards your State Pension.
So if you’re not claiming when you could be, it might see you left out of pocket in later life.
What is Child Benefit and who is eligible?
Child Benefit is paid to parents of children aged under 16 or below 20 and still in “approved” education or training.
It is paid at two weekly rates – £25.60 for your eldest or only child and £16.95 for any additional children.
Payments are usually made every four weeks, on a Monday or Tuesday, but sometimes are made weekly.
If you are claiming Child Benefit for a child under 12, you also receive National Insurance (NI) credits.
NICs count towards your State Pension so can be useful if you are missing any.
The reason NICs are so important is because you need 35 NIC years to receive a full new State Pension.
What is National Insurance?
NATIONAL Insurance is a tax on your earnings, or profits if you’re self-employed.
These contributions make you eligible for things like the state pension and certain benefits.
You’ll usually pay National Insurance Contributions (NICs) when you’re over the age of 16 and earning a certain amount.
For example, if you earn £1,000 a week, you pay nothing on the first £242.
Earn over that and you pay 10% on the next £725 – so £72.50. Then you pay 2%o on the rest, so £33, which works out as 66p.
For the self-employed rates are slightly different.
You can also get something known as National Insurance in some circumstances when you’re not working, for example when you have kids and claim certain benefits.
NICs are usually taken automatically by your employer and paid to HMRC, so you don’t need to do anything.
You can see how much NICs you pay on your wage slip.
Anyone working for themselves usually has to pay NICs themselves when completing a self-assessment tax return.
You are considered a parent, or responsible for a child, if you live with them and are paying at least the same amount as the Child Benefit rates to look after them – for example for food, clothes or pocket money.
It’s important to note that eligibility changes if a child goes into hospital or care and if your child starts to live with someone else.
If you’re not sure about your eligibility you can contact the Child Benefit office.
Since 2013, if you, or your partner if you have one, earns over a certain amount, you have to start paying some Child Benefit back.
Go over a second threshold and you have to pay it back in its entirety.
This is through what’s known as the High Income Child Benefit Charge (HICBC).
The threshold through which you have to start paying money back is now £60,000 after it rose from £50,000.
The rate at which you have to pay the entire allowance back is £80,000, which recently increased from £60,000.
It’s up to you to pay the charge though, and if you don’t you can be stung with a nasty bill.
How to apply for Child Benefit
You can make a claim for Child Benefit 48 hours after you’ve registered the birth of your child, or once they move in with you.
It can be backdated by up to three months if you don’t claim it straightaway.
Only one person can claim Child Benefit for a child, so you should think carefully about who might need to the most.
For example, if your partner is missing NICs, they should probably claim so they can top them up.
You can apply for Child Benefit on the Government’s website.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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