Child benefit - over £60k

[Matleavemummy]

Hi all. My partner earns over £60k, so we are therefore not entitled to CB.

I have read that you should still claim it, declare it on a tax return, and then pay it all back. I can’t understand the benefits of this - could someone please explain? Something to do with national insurance credits? I don’t understand! Please help!

I'm on over £60k and still get some as it's not your headline amount it's your adjusted one, so you can knock off work from home allowance, gift aid, higher tax on pension payments etc, so unless it's way above you may make more money keeping it.

As for your question, your state pension is calculated based on years you've worked, which they use NI contributions for. If you are a SAHM for some time the child benefit also gets you the credit for a certain number of years of NI so helps you ensure you get your full pension later. If you are working too and don't expect to stop again then it probably makes little difference.

I’m in the same situation. I used to claim, then DH passed £60k so I stopped claiming it. I checked online last week and I’m still getting the NI credits. I really didn’t want to be in the position of claiming it and paying it back, I was sure we’d end up spending some of it!

If one partner doesn't pay national insurance s they are below the limit (sahp/low earner) you get credit on our future pension until your child is 11 (as you need X number of years of payment)

If you pay your own national insurance with your wages, this isn't important.

@ACynicalDad thanks - very helpful. We are both in work and plan to be forever! I suppose it wouldn’t help to put the claims in just incase one of us is out of work. Could my husband “transfer” his credits, as it would likely be me out of work and not him?!

Yes - do this. It will protect your state pension, for which you require a certain amount of NI contributions to be made. If you cannot do this because you are a stay at home mum, you can get ‘credits’ for the years you aren’t working - but only if you can prove you are a parent. Child benefit receipt proves you are a parent, even if you pay it back. Fiddly and a stupid system when one oartener earns over £60k and the other nothing…..but this is the way to do it. It’s usually mums but might be a dad depending g on who isn’t working. Some people don’t bother because their husband or wife works and has a pension set up but what if you divorce? My mum had huge hassle some years back trying to get her years that she didn’t work, accounted for, to then get her full state pension. This was before the £60k rule but even so it was a pain getting her NI sorted.

Yes I’m with you - it seems an awful lot of hassle and I think I’d definitely have a shock having to suddenly pay it back at the end of the year. As PP has said it’s worth considering if I’d ever be a SAHM in which case we might consider doing it for my NI credits

I treat it as an interest free loan. (I am careful to save it though).

If your income is £60,000+, it's still worth registering for child benefit
www.moneysavingexpert.com/family/child-benefit/

How do you sort it? Dh is now on 60k but with pension it means we’ll get some child benefit and this year his salary changed part way through so I’ve no idea what his party is for this financial year - we’ll await the end of year statement. Then I’m guessing we’ll have to fill in a form… how, where? What do we need to do and do you pay it back in one lump sum?

i realise it’s a nice problem to have and dh earns well but it feels quite overwhelming because we have no idea what we’re doing. I have googled and did the calculator but I’m still not clear how we go about sorting it.

it might be easier not to claim next year as I work full time and have always paid NI anyway.

You can "claim" it while foregoing the payments; you simply get the NI credits. There's a box to tick on the form. I'm working anyway, but I "claim" for both DC while foregoing the payments so that it's set up if I ever were out of work. Although tbh mostly I just did it so the kids will automatically get their National Insurance cards down the line.

@ShiverOfSharks Oh that's helpful to know. I didn't realise you could claim without being sent the money. Job for tomorrow I think, thanks!

@taeglas that linkIs fab! Thank you.

Absolutely what @ShiverOfSharks said - that’s what I do.

I registered the children as eligible, then there’s a box you tick if you don’t want to receive the payments. Much simpler than receiving the money, filling in a tax return and paying it back!

If you are more likely to need the credits put the claim in your name. You can claim it (have a claim open) but ask them not to pay you which is the simplest thing in your situation.

How much over £60k does he earn and does he pay into a pension?

If he's not far over and he pays a decent amount into a pension (and has no other benefits like a company car or private health insurance) then you won't lose all child benefit until his adjusted net income is above £60k (look on HMRC website for definition and how to work this out).

But if you work, you'll get your NI credits anyway, the main benefit is for SAHPs or those who earn very little (under about £7k pa) so they get their NI credit. You could check your record on the HMRC website, to see if you're likely to get enough credits due to working, so the CB credits aren't relevant anyway.

Can I ask where you actually sort all this out?
Do you phone HMRC?

Paying back is done through a self assessment tax return.

As long as you are working there is no benefit to claiming

I claim it and DH has to pay it back through tax. I absolutely refuse to give it up. It gives you additional national insurance payment years so unless you can guarantee you’ll always be working you should claim it.
An important historical principle is that the money should be paid to the mother - Eleanor Rathbone MP battled for years to get it brought in and I am not giving it up. If your income suddenly reduced you would have to fiddle around getting it restarted - better to just always have it.

I get what you are saying but this week we've just had to pay back £730 and next year it'll be more than that, and the year after the same, It's confusing as DH changed jobs in August. I can't afford to lose the £200 a month (I'm studying and only work pt), but I also don't want us to get a bill for £1500.

You can have a claim but opt out of getting the payment. Makes it easier to start up payments again if the job situation changes. Having a claim also means your children's NI numbers are sent out automatically without having to apply for them

I'm afraid it's a letter they get with their NI number on. No more cards these days as they were too expensive!