Martin Lewis’s MSE reveals a child benefit error that could cost you £1,000

MARTIN Lewis’s MoneySavingExpert.com has revealed a little-known child benefit error that could cost you £1,000 later in life.

If you or your partner earn more than €60,000 a year, you will have to pay back the full benefit, meaning some may not claim at all.

However, if you claim child benefit, you are entitled to National Insurance (NI) credits which count towards your state pension.

This is especially important if one in two people earn less than £123 a week, as this is the amount you need to earn to qualify for NICs.

Instead, you can claim child benefit in the lower earner’s name and then waive the payment, giving them a boost to their NICs.

It could be worth an extra £1,000 a year when it comes to claiming your state pension later in life.

You can opt out of child benefit payments via the government website or the HMRC app, which can be downloaded for free.

according to the latest MSE newsletter from Martin Lewis: “Many don’t bother registering if a parent/guardian earns more than £60,000 as they will simply have to pay it all back.

“Yet that’s often a bad idea. Even if you earn too much to benefit from it, it’s worth registering as it activates your right to national insurance contributions.”

The newsletter further revealed that 200,000 parents are missing out on the opportunity to improve their NICs because they are claiming child benefit under the wrong name.

Rather than the higher earner claiming, it should be the lower earner who needs the NICs more.

Who is eligible for child benefit?

You will normally be eligible for child benefit if you live in the UK and are responsible for a child under the age of 16.

The aid can also be applied for for a child under the age of 20, if he or she is in approved education or training.

To be considered responsible for a child, you must live with the child or pay at least the same amount as child support to care for the child, for example food, clothing or pocket money.

It is important to note that eligibility changes if a child goes to hospital or care and if your child starts living with someone else.

If you’re not sure if you qualify, you can do so please contact the child benefit agency.

You will not receive the full amount of child benefit if you earn more than €50,000, and nothing if you earn more than €60,000.

That’s because of something called High Income Child Benefit, but if it applies it’s still worth claiming.

How much is child benefit worth?

There are two child benefit rates: one for the eldest child and one for each subsequent child or children.

The current rate for your eldest or only child is £24 per week. That’s £96 per month or £1,152 per year.

For each additional child you will receive €15.90.

In April this year, child benefit will increase by 6.7%, based on the inflation figures of September 2023.

The new rate for your eldest or only child will be €25.60 per week. That’s £102.40 per month or £1,228.80 per year.

You will receive €16.95 for each additional child.

Child benefit payments are likely to rise again in April 2025, in line with inflation from September this year.

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