HMRC says DWP scheme can help towards state pension
A customer contacted the authority confused about a letter they had received
HMRC has pointed to how claiming a DWP benefit could help build up your state pension entitlement. The tax authority explained the scheme after a question from a taxpayer over social media.
The person said they had received a letter about the High Income Child Benefit Charge, which is where you have to pay back part or all of the benefit depending on your level of income. The taxpayer explained: "We stopped the Child Benefit due to my wage increase but then we received a letter stating that we are entitled to claim, even though I had to pay back over £1,000. We're totally lost with it all."
In response, HMRC explained how the charge works: "For the current year, if you earn more than £60,000 you start to have to pay some of the Child Benefit back, and at £80,000 you pay all of it back." These thresholds apply to each person's individual income within a household. HMRC also mentioned how a couple could take advantage of the rules to get a state pension boost.
The group said: "If one of you is not in employment at all, claiming the Child Benefit in their name would give them National Insurance credits (NI) towards the state pension.
"You are able to claim, but not actually receive any money, just the NI credits. If you did that, you wouldn't have to file a tax return." A claimant will automatically get NI credits if they have a child who is under 12 and if you do not pay National Insurance.
A person typically needs 35 years of full NI contributions to get the full new state pension, which currently pays £221.20 a week. Child Benefit is currently worth £26.05 a week for your eldest or only child, and £17.25 a week for each additional child you have.
The benefit is paid every four weeks either on a Monday or on a Tuesday. In other benefits news, the Government has announced that the eligibility for the Winter Fuel Payment will be expanded from next year, with all state pensioners to qualify.
However, those with an income over £35,000 will have to pay it back. Currently, you have to be of state pension age and on a certain means-tested benefit to qualify, such as Pension Credit.
The payment was worth £200 or £300 this past winter. More details about next winter's payment will be published at the end of June 2025.
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