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Planning Retirement Online

Grandparents do make a difference - 9

March 2010



Each month we bring you this special column on grandparenting written by our expert contributor Jeanne Davis.

If you have a subject you would like covered by Jeanne, please email us at:


Should grandparents who provide child care should receive financial assistance

Three quarters of grandparents who help to look after children have either given up some paid work or are retired and surviving on a pension and/or savings, according to a survey commissioned by Yours magazine. The majority say they wouldn’t take payment from their children for childminding and more than half say that their children couldn’t afford to pay anything anyway.

What about state benefits? The value of the childcare work that grandparents provide is estimated at £3.9 billion a year. 61% of people polled for a report Rethinking the Family, commissioned by the charity Grandparents Plus, agree that grandparents should receive some kind of reward or payment from the state for providing childcare.

Benefits available and proposed

Following extensive campaigning, one benefit will soon be available to the grandparents who juggle work and care for grandchildren. From April 2011 it will allow grandparents of working age who care for grandchildren 20 hours a week or more to build up National Insurance top-ups that will count towards the basic state pension in just the same way as work,

Campaigners are also calling on ministers to allow grandparents to receive the childcare tax credits, currently worth up to £300 a week, if they are helping parents return to work. Only parents using nurseries and registered child minders can claim the benefit under existing rules. Conservatives and Labour are currently looking into Grandparents Rights, including financial assistance such as childcare credits.

Rashmi is typical of mothers who rely on grandparents to provide childcare. She is married and works full time as a telesales advisor. She has an 18 month old son. Rashmi’s mum and dad care for their grandson 9am-6pm every day so that she can go to work which she has to do to keep up her mortgage payments. Her parents are in their 50s and both feel they should be entitled to some financial recognition for the contribution they make. Rashmi says, “We cannot afford childcare. My parents help because they see me struggling.”

Ulla juggles her part-time job doing the accounts in a GP’s surgery with looking after her grandsons to help out her daughter-in-law who works as a market researcher. Caring for the boys, aged 18 months and 3, is hard work for the 65-year-old. Although she is more than happy to help her family, she does not understand why her efforts are not acknowledged by the tax system.

“I am very happy to slot in and help when I can. I have the sort of job where it is easy to change arrangements if necessary. But it is very unfair that this work is not recognised outside the family, “she says.

“Some of my colleagues at the surgery claim the childcare tax allowance (from tax credits) to pay for nursery places or childminders. Grannies are providing the same service, and often a far more flexible service especially when the children are older and at school,” she told The Times.

“I suppose the danger is that if the Government agrees to pay they’ll want to start vetting grandparents and start coming round to their houses and seeing what’s going on. It could be a dangerous path to start going down if that is where it leads.”

Financial assistance for grandparents who take on full time child care

It is estimated that more than 200,000 grandparents have taken on the full time care of their grandchildren. There are a number of different circumstances in which grandparents and other relatives step in. The parents may be unable to cope because of alcohol or drug abuse, because of death or illness, domestic violence or imprisonment.

There are benefits that these carers may be entitled to. These benefits are provided as a right if you satisfy the conditions for payment and are provided by the State to help you give a child the best possible start in life.

It is a very complex area. Eligibility and payments vary considerably depending on your local authority. Among the benefits is the Child Benefit, a non-means tested benefit paid to a person bringing up a child under the age of 16. You may also be able to claim Child Support Maintenance and Working Families Tax Credits. There are other state benefits or allowances relating to children including income support, housing benefit and council tax benefit, and children with special needs. All of them are subject to strict eligibility rules. You will need advice from your local Benefits Agency office or you can get advice from the Citizen’s Advice Bureau.

Grandparents play an ever-increasing role

One way or another, we are all living extended family lives. Economic and social drivers mean that grandparents are playing an ever-increasing role in supporting family life and caring for children. Families are extending both horizontally as a result of the increase in the number of step-family relationships and vertically because of our ageing population, with four and even five generation families not uncommon. Through this changing family picture the role that grandparents and the wider family play is significant; but it can be hidden, is often taken for granted and is little understood.

If the role of grandparents in the wider family is not clearly understood, the Grandparents Plus report demonstrates that “most importantly, children will lose out.”


For information about pension top-up credits contact the Benefits Inquiry Line -0800 882 2000 or go to

For general information about benefits call the Grandparents Association advice and information line: 0845 4349585


Previous articles in the series:

1. Grandparents do make a difference
2. When Grandparents are on duty
3. To Discipline or not
4. The long Distance Grandparent
5. When the parents separate
6. Second time around
7. Who baby-sits?
8. Favouring one grandchild more than the others
9. Should Grandparents who provide child care receive financial assistance


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