Steve Webb and This is Money’s Emma Maslin – who led the campaign

The Government appears to have listened to Steve Webb who has been fighting a one man campaign on behalf of mothers who – due to the complexity of child benefit rules, were in danger of losing credits for state pensions – irretrievably.

This is great news. We did a Parliamentary petition on the issue back in 2018, so it shows you should never give up campaigning! https://t.co/TrESRbOt6b

— Steve Webb (@stevewebb1) April 27, 2023

The problem

The problem is set out on LCP’s website

Since the High Income Child Benefit Charge was introduced in 2013, the number of families claiming Child Benefit has dropped every year.  In August 2012 the number of families on Child Benefit stood at 7.9 million but this has now dropped to 7.0 million.  Those who have decided not to claim are typically higher income couples who have decided that claiming child benefit and incurring a tax charge for the same amount was a waste of time.

But there is a risk that if they simply make no claim at all they will miss out on the valuable National Insurance credits which go to those who get Child Benefit for a child under 12.  Parents do have the option to claim just the NI credits (and not the cash) but many simply do not claim at all.   Crucially, where people realise they have missed out they can put in a Child Benefit claim but under current rules it will only be backdated for three months.

But the bit in bold is about to change

There is  a statement on National Insurance credit changes in HMRC’s policy paper on tax administration and maintenance published 27th April

The government recognises concerns that some parents who have not claimed Child Benefit could miss out on their future entitlement to a full State Pension. The government will address this issue to enable affected parents to receive a National Insurance credit retrospectively. Further detail on next steps will be available in due course”.

As Steve Webb recognizes, this is unreservedly a good thing. Brandon Russel’s  headline proclaims

Hundreds of thousands of mothers set to get state pension boost

We don’t know when the change will take effect and how the new rules will work, but Steve Webb should be made an official hero of Mumsnet!

Laura Trott is proving a highly effective behind the scenes operator and I hope that Mums will recognize that getting these concessions out of HMRC is far from easy for any department. Webb tips his hat with generosity.

I’m absolutely delighted about this – full credit to new(ish) pensions minister Laura Trott @DWPgovuk for her part in this – a very practical way of preventing a potential state pension gender gap from opening up. https://t.co/E3caZKNVWd

— Steve Webb (@stevewebb1) April 27, 2023