You may already be aware of the High Income Child Benefit Charge (HICBC) - the clawback of Child Benefit which has not been too popular over the last 5 years since it was introduced.
Where the charge applies, the higher earner declares the child benefit payments in a self-assessment tax return. The tax clawback begins once an individual’s income reaches £50,000 and results in a complete clawback once the income reaches £60,000.
Because of this, a number of people have decided not to apply to claim it at all. If you are receiving child benefit only having to declare it and pay it back this may seem to make sense, although this could create a problem if someone isn’t working. This is because it could mean they are foregoing contributions to their National Insurance record and so are potentially missing out on part of their future state pension.
Individuals who make a claim for child benefit for a child under 12 are entitled to Class 3 National Insurance credits, helping to preserve their NIC record and counting towards the state pension. Don’t make a claim and of course you won’t receive these credits.
To prevent this, the non-earning partner could make a claim for child benefit and then elect not to receive the payments, as they still get the credits. Also then if circumstances change and the income reduces under £50,000 they can restart the Child Benefit if they wish.