Child benefit and NI contributions

[absolutelycluelessagain]

We recently cancelled our child benefit due to husband's new job which takes us over the max threshold. However I am self employed earning less than the £12,570 a year to qualify for NI contributions.

I heard I should still sign up for child benefit but without the payments in order to receive NI contributions. Is this correct?

Thanks

Yes that’s correct, the recipient of the Child Benefit gets those

Sorry to highjack the thread but is there any benefit to signing up to Child Benefit if the lower earning parent is on £40k?

I’m not sure what you mean by “is there any benefit”? 40k is below the cut off for child benefit, if that is what you are asking?

If the parents are together it is how much the highing earning parent earns which is important.

Do you mean a situation where the higher earner earns over the threshold, and the lower earner earns £40k?

In that case, no. There would be a benefit if the lower earner earned below the threshold for paying NI.

I think you can register as eligible for child benefit but just elect not to take the money, and this will preserve your NI record.

BUT you also don't need to be earning over £12,570 - as long as you earn over £6,725 (in 2024/25) you'll still get the credit for the year.

If you might earn less than that then it's worth making sure you're registered for child benefit as a back up.

Oh, I must be mistaken. I earn over £10K which means we can get tax free childcare as husband earns shy of £100K. I got the £12K number for NI contributions online from the .GOV website. Have I misinterpreted that?

You'll only be liable to pay NI contributions if your profits are over £12,570, but if you earn over £6,725, you'll be treated as if you paid them and get the credit.

https://www.gov.uk/self-employed-national-insurance-rates

I see thank you. So I don't have to do anything?

In this case is there any benefit to setting up child benefit again and not taking the actual payments?

Not really, except that it'll be in place if you ever spend a period out of work or your income dips below the threshold.

DH and I are both over the threshold for CB - I "claim" it while foregoing the payments to preserve my NI record even though I'm working, just in case I'm ever not working for a while.

@DreadPirateRobots

Thank you, I think I need to do this as my income varies year to year. Although I don't think it would dip, it might.

You can check on the gov site to see if you are getting complete years from an NI perspective. I think it is under state pension predictions.
If you aren't it is the worth claiming but not getting paid the child benefit

Thanks, I've done this previously and fine so far. Except for 4 years at university which I had no idea about. Can't get my head around why that's a thing while you're a full time student- doesn't seem fair.

I'm just concerned as PP said about potential future years if I take a dip in earnings so might be worth reinstating it for that reason.

I signed up for CB but didn’t sign up to receive any payment.

I took an extra 6 months off maternity and
left my role so it means no missed NI records - at the time I wasn’t sure how long I was going to be a SHAP so it covered that side.

When my eldest left sixth form at 18 I got a letter confirming my zero payment was stopped :)

I took extended mat leave too but at the time we were eligible for it so only recently a change in husband's earnings have changed that. I should have done that when I phoned them up but had no idea it was an option. Will phone again to set up as you've described.

I feel you! I was at uni for 9 years! As I did a 4year undergrad and 5y phd. You can buy part or missing years but you can only go back so far. This has just reminded me to check my years.
I've accepted that I will have to work until state retirement age or if I retire before this I will have to accept less than full state pension or pay for the years I'm not working.

It might be worth looking at how easy it is to set up. If it's not too bad it might be worth doing as a safety net in case your income drops. We had to pay some back through self assessment tax form which wasn't too bad but would have been a faff if there was no financial gain. We paid back 2 months worth of child benefit

@absolutelycluelessagain if it's any reassurance I've just checked my forecast for my state pension. I have 9 incomplete years and if I work to 60 I will currently get the full state pension.