National Insurance replacement credits: HMRC confirm one-year delay

Who might be entitled to replacement National Insurance credits?

The issue mainly affects parents and carers who:

• were eligible for Child Benefit for a child under 12 from 7 January 2013; but
• did not claim Child Benefit (for example, because of the high income child benefit charge impacting a higher-earning partner); and
• as a result, may have gaps in their National Insurance record, for example if they were not working or not entitled to National Insurance credits for any other reason.

These gaps could reduce entitlement to the state pension.

Impact of the delay

For those who do have gaps in their National Insurance record, most will not be affected by the delay to the new service, as they will still be able to apply for the replacement National Insurance credits once the service becomes available in April 2027.

However, some individuals may see a short-term impact on their state pension. This is most likely to affect people who are already receiving their state pension or who will reach state pension age before April 2027.

This is because any missing National Insurance credits may not be added to their record in time to increase their pension payments during that period.

Reporting a financial loss

HMRC have set out their complaints process through which people adversely affected by the delay can report a financial loss. HMRC say they will review each case individually and may ask for more information.

To be considered certain conditions will need to be met. These include that:

• the person was eligible for child benefit for a child under the age of 12 at any time from 7 January 2013;
• no one else has already claimed child benefit, or reported a financial loss, for the same child for the same dates;
• the person reached, or will reach, state pension age between 6 April 2016 and 6 April 2027; and
• the delay in introducing the replacement credits service will directly affect the person’s state pension payments.

If HMRC agree that a person has suffered a financial loss as a result of the delay to the service, they will calculate a payment to reflect the impact on their state pension up to April 2027. Any payments are expected to be made after the replacement credits service is introduced.

Antonia Stokes [email protected]