Home Responsibility Protection (HRP)
Home Responsibility Protection (HRP) was made available to foster carers from 2004. HRP protects the basic retirement pension position of people whose opportunity to work is limited because they are caring for children, or a sick or disabled person. It also helps with bereavement benefits. It is designed to have the simplest of qualifying criteria - namely as a 'passport' entitlement based on the receipt of appropriate benefits. For carers of children, Child Benefit is the trigger.
Foster carers are not employees of the local authority and the allowance they receive for caring for a child is not normally subject to National Insurance or tax. ‘Reward payments’ are made in certain circumstances, which are classed as earnings from self-employment and are liable for NI payments, but few foster carers receive these and some of them are granted exception from NI liability on the ground of low earnings.
As the children cared for by foster carers are technically in the care of the local authority, foster carers are not entitled to Child Benefit for them. Consequently, they are not covered by the HRP provisions for periods of foster caring unless they have children under 16 of their own.
HRP has been extended to foster carers for each full tax year for which they are registered as an approved foster carer. This means that they will be covered for periods when they are awaiting a placement and will benefit emergency foster carers who are ready to take in a child at any time.
How HRP works
The amount of basic (Category A) retirement pension, a person is entitled to will depend on the number of qualifying years (i.e. years covered by national insurance contributions or credits) they have built up during their working life. The working life runs from age 16 until state pension age. In order to receive a full basic pension, 9/10ths of the working life normally needs to be covered by qualifying years. The working life is currently 49 years for men and 44 years for women. Therefore, for a full basic pension, a man needs 44 qualifying years and a woman 39.
HRP reduces the number of qualifying years needed for a full basic pension. However, it cannot reduce that number below 20. The provisions apply equally to men and women.
The current maximum number of HRP years is 24 for men and 19 for women. When state pension age was equalized at 65 in 2020, both men and women need 44 qualifying years for a full pension and HRP will cover a maximum of 22 years.
The broad intention of HRP is to protect a person's pension over substantial periods of home responsibilities, not short periods of a few weeks or months; the legislation therefore applies to complete tax years during which a person satisfies the conditions.
What has to be done?
Foster carers need to complete claim form CF411, which they can get from social security or Inland Revenue offices and send it to the Inland Revenue. They will need to enclose a letter of confirmation that they have been approved as a foster carer throughout the previous tax year. This letter will need to be provided by the Local Authority which has approved them. Provided everything is in order, they will have their entitlement to HRP for that tax year noted on their National Insurance account.