However, those who are not contributing can still receive a year of credits as a substitute as long as they are engaged in “valuable activity”, which includes caring for others or actively looking for a new job.
Many of these credits are awarded automatically but some require the person to be aware of them and make the claim themselves.
Here is a look at the most common groups who miss out on claiming the credits.
In the case of parents where one is working while the other is not, the credits are of value to the partner who has taken time off from work. However, Sir Steve said in practice there are a surprising number of cases where the “wrong” partner receives the child benefit.
He said: “These are cases where the person in whose name the benefit has been claimed does not need the NI credit and where they have a spouse or partner who does need the credit.”
HMRC estimated in 2019 that there could be 200,000 couples in this situation.
It is possible to put things right after it has been claimed, as long as couples fill in a CF411a form, which allows people to apply to have the credit transferred.
Higher earning parents may also be missing out on valuable credits. In January 2013, the Government introduced the “High Income Child Benefit Charge”, which means that for every £100 of annual income above £50,000, parents claiming child benefit had to pay a charge of 1pc of what they received.
The charge for those on £60,000 a year or more equalled 100pc of the child benefit. This means that one partner could receive the child benefit while the other received an annual tax bill for the same amount.
Many couples have avoided this situation by not applying for child benefit. However, this means that will not be receiving the NI credits, which could cost them in retirement.
You will automatically receive NI credits if you receive pay during periods of maternity, paternity or parental leave. However, those whose rate of pay is so low that they do not come under the NI system may need to apply.
— to www.telegraph.co.uk