Most people will be aware that where you have a child under the age of 16 (or under the age of 20 if in approved education or training) you will be entitled to claim child benefit.
The majority of people will also be aware that if a person’s income is above £50,000 some or all of the child benefit will have to be repaid.
But are you aware that it could be beneficial for you to claim child benefit even if you have to repay it to HMRC because of the income cap?
By claiming child benefit you are making sure that you are preserving your entitlement to state pension by virtue of receiving Class 3 National Insurance credits automatically.
This could be of benefit for example where a parent decides to stay at home to raise a family and is therefore not making any National Insurance Contributions, meaning they are not building up their entitlement to a state pension. It is possible to register to receive child benefit but elect not to receive it and this will also enable you to preserve your entitlement to state pension.
However this is not necessarily recommended as there is no guarantee that your record will be noted as there is no physical payment to be made to you. The safer option is to receive the child benefit, even if you have to repay it.
What is it they say….never look a gift horse in the mouth!!