Keep in mind that the refusal of child benefit could cost you your state pension | Patrick Collinson

Last year approaching half a million women have opted out of receiving child benefit. An unknown number never applied in the first place. Why? Almost certainly, because their partner earns more than £60,000 in the year that the final cut-off point for payment. But yet they save your partner the hassle of having to fill self-assessment tax forms, those that do not apply may also unwittingly denying themselves a full state pension.

This week Nicky Morgan, the Chairman of the Finance Committee, warned that “the relationship between national insurance credits [NYX], and child benefit is poorly understood” and that “the stay-at-home parents the risk of losing your pension.”

So what’s going on? In 2010, the then Chancellor George Osborne announced that the government would remove benefits for children from families with higher incomes. For couples where one partner earns between £50,000 and £60,000, he is gradually removed, and stops completely if one worker has an income over £60,000.

As “strict but fair” measures of economy, saving about 1 billion pounds a year, she had quite broad support. Why, with public finances in chaos, if well-off privileges, at the time, a little more than £1,750 a year for two children?

But as Morgan notes, it has had unintended consequences. Under the current system, if one of the parents or guardian earns over £50,000 that they will be responsible for the “high income child benefit tax charge”. They can still claim it, but then they have to register for self-assessment and fill in a tax return, and the government claws the child in that direction.

Many couples see it as putting money in one pocket, she on the other, so don’t bother to sign up to receive child benefit.

But here’s the problem; an application to receive child benefit whether it is actually paid or not, provides the grounds that the parent receives the network card, while the child is under 12 years. And mothers (and it is usually mothers) who do not claim may not increase their full state retirement benefits.

To receive a state pension, the parent must have paid NICs, or network cards received, in all 35 years of the tax. Loans are crucial for stay-at-home parents, as they fill a gap in the record, network cards, and take care of the children.

HMRC figures for 2017 show that 433,665 women have opted out of receiving child benefit, but remained in the system and Ni and get loans. We don’t know how many never register.

To be fair, the government warns of danger. Its States the site “you can choose not to receive child benefit, but you must complete a claim for the benefit of the child form. This will help you get network cards that count toward the state pension”.

At this stage, you might be thinking, “poor rich man”. So if they skip a few years the state pension, they are loaded. Many people probably have. But there are many who will lose high-paying jobs and never recover. So if you think don’t apply, think again.

Benefit, and regard it as an interest-free loan you will pay at the end of the year – and make sure that you stay in the system network adapters.

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