This is worth reading if you have a child under the age of 12 for whom you could claim child benefit.
Child benefit is payable at the rate of £20.70 per week for the first child and £13.70 per week for each subsequent child under the age of 16.
Since January 2013, some of this benefit has been clawed back by the government where either parent has annual taxable income exceeding £50,000. The full amount of benefit is clawed back if that income exceeds £60,000. The clawback will be applied to the partner with the higher income.
Some higher earners have therefore decided not to register for child benefit, but this could reduce the eventual amount of state pension entitlement.
If you have a child under the age of 12, and one parent is staying at home to look after the child, they should still register for child benefit and tick the “opt-out” box. This will ensure that they don’t miss out on national insurance credits. The stay-at-home partner should be the one who registers because they will be the one needing the credits.
If you are already receiving child benefits which will be withdrawn because you or your partner are “high earners” then, unless your children are all aged over 12, it may be sensible to continue to claim, even if you have to pay it all back again, just to ensure you get the national insurance credits. If you are in this situation you should be aware that the partner with the higher income will need to register with HMRC for self-assessment and file an annual tax return.
Finally, you need to be aware that this does not just apply to people who are married or in a civil partnership, but also to people who are living together.