Consultation Launched on National Insurance Credit Changes

The Government today announced a consultation about changes to national insurance credits for those people who give up work to care for a family member under the age of 12.

Under the new plans, grandparents who stop work will continue to build up national insurance credits if they give up work to provide kinship care for a child under 12, ensuring that grandparents will have their pension rights protected.  The national insurance changes will be from the 2011/12 tax year.

As well as grandparents, ministers are consulting about which other family members should be eligible to receive national insurance credits if they care for a minor under 12 (for example, a former spouse or partner).

Evidence from the UK suggests that grandparents are the largest group awarded kinship care of children.

Half of the country’s estimated 11- 14 million grandparents are under the age of 65 (the average age for becoming a grandmother is 49).  Around a third of grandparents spend the equivalent of three or more days caring for their grandchildren - saving an estimated £3.9 billion a year.

Also, longer life expectancy may well find younger grandparents as members of a four generation family, caring for both grandchildren and elder parent/s.

Announcing the consultation, Steve Webb, the Pensions Minister, will say: “I have supported the idea of a Grandparents’ Credit for many years.

“For too long the vital child care that grandparents provide so that parents can work has been overlooked by the system.

“It is about time that we protect the pension rights of grandparents, many who are in their early 50s and giving up work early to provide vital child care.

“Parents of children under 12 and carers receive a credit towards their basic state pension so it makes sense to extend this to grandparents of working age too.”

The consultation will run until the end of November, with the new rules designed to come into force in time for the 2011/12 tax year.

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