Ex-pensions minister Sir Steve Webb has hit out at the government’s refusal to backdate child benefit claims.
Sir Steve Webb had called on HMRC to allow parents to backdate child benefit claims fully in an online petition, in order to to protect their state pension entitlement.
But in its response to his petition yesterday (February 4) the government stuck with its previous stance of allowing backdating to a maximum of three months.
It wrote: "The government believes no-one should miss out on their state pension. HMRC encourages families to claim child benefit and believes that three months is a reasonable period to backdate claims."
The government stated it would be doing more to make new parents aware of the link between child benefits and state pension entitlements however.
It stated: "From April 2019 the child benefit claim form and accompanying notes will further emphasise the non-monetary benefits a child benefit award provides: in particular, the associated National Insurance credits which protect their state pension."
In response Sir Steve, who is now director of policy at Royal London, said: "Whilst much of the government’s response is restating their usual position, there are small signs that they realise there is a problem and may be making changes.
"The fact that the paperwork is being changed for April 2019 is an admission that the current process is not good enough. And it is encouraging that they are looking at ways to ensure people do not miss out on state pension.
"All of this would improve things for the future but for those who have already missed out, relaxing the three-month backdating limit is essential."
Sir Webb’s petition entitled ‘Make sure mother’s get National Insurance credits towards their state pension’ was launched last year and has already attracted 13,000 signatures.
On reaching 100,000 signatures it will be considered for debate.
Mr Webb believes the government must start actively contacting parents affected to tackle the growing injustice of parents facing a reduced state pension in later age.
Child benefit recipients with a child under the age of 12 get national insurance credit towards their state pension.
This means even if they are not in paid work, they are still treated as having contributed when it comes to claiming their retirement benefits.
However, stay-at-home parents, whose partner’s earn more than £50,000 to £60,000 can only receive these credits if they apply for child benefit but then waive the payment of all or most of it.
As of August 2017, more than 500,000 families had chosen to make a child benefit claim and opted out of receiving payment, meaning their entitlement to their state pension has been protected.
HMRC stated any parents that have not claimed should do so to ensure their future entitlement for the state pension is protected.
But it added most parents would qualify for the new state pension, even if there are gaps of up to 15 years in their national insurance records.