Benefits, National Insurance and Tax

Benefits, National Insurance and Tax

1. General Information
Marriage Allowance

Did you know that you could pay less tax by applying for Marriage Allowance? If eligible, the non-serving partner can transfer a proportion of their allowance to their other half. To apply, you must be married or in civil partnership, one of you must earn less than £12,750 and the other must be a basic rate taxpayer. You can register at any point in tax year.


Universal Credit (UC) is a benefit being rolled out to replace the old legacy benefit system, including Housing Benefit; and UC now includes a housing costs element. This is to help with living costs for lower income families. You can use this free benefit calculator to find out what you may be entitled to claim. 

Tax in Scotland
  • NFF news (13th March, 2018)

The NFF is delighted that Defence Secretary Gavin Williamson has announced his intention to counter the Scottish Government’s income tax rise that affects thousands of Royal Navy and Royal Marines (RN/RM) personnel in Scotland. 


This issue was raised with us by many RN/RM families located in Scotland and we advocated on their behalf to the MOD and Government. We are pleased that they have listened. 


On 21 February 2018, the Scottish Parliament ratified their income tax rates and thresholds applying to Scottish taxpayers. As a result those Service personnel earning more than £26,000 would pay more tax in comparison to their counterparts in the rest of the UK. Scotland plays a key role in the defence of the UK and its contribution is set to increase. Some 1,400 submariners will move to HM Naval Base Clyde by 2020, creating the new single home of the entire UK Submarine Service. 


  • Update (19th July, 2018) 

Since this article was published in March 2018, a new compensation scheme has been announced in Mid-July 2018 for those who are affected by the increase in Scottish tax rates. For further information on the scheme and our comment, visit here. 

2. Childcare

Specified Adult Childcare Credits – these National Insurance (NI) credits were introduced from April 2011. You may be entitled to receive these NI credits if you are a grandparent, or other family member, who cares for a child under 12, usually whilst their parent (or main carer) is working. These credits are only available from April 2011 and you must make an application to receive the NI credits. 


Do you know you can save up to £2000 per child, increasing to £4000 a year if a child is disabled a towards help with your childcare costs? If you are eligible to get Tax-Free Childcare, you’ll need to set up an online account. For every £8 you pay into this account, the government will pay in £2 to use to pay your childcare provider.  


Top Tips 

  • You can get Tax-Free Childcare at the same time as 30 hours free childcare (England only) if you’re eligible for both. 
  • You will need to have a TFC account to be able to claim for Wraparound Childcare (WAC). Our childcare section holds a wealth of information. 
3. Overseas assignments
National Insurance Credits

You may be able to get National Insurance credits if you’re married to or the civil partner of a member of the Armed Forces and you go with them on an overseas assignment. 


Credits can help to fill gaps in your National Insurance record, for example if you were not in work when you were with your partner on an overseas assignment. Credits can make sure you qualify for certain benefits including the State Pension. 

Class 1 Credits

Class 1 credits are available for periods spent overseas accompanying your serving person since 6 April 2010. They can help to protect your entitlement to the State Pension and other benefits such as the new-style jobseekers’ allowance. These can be applied for four months before returning from overseas, and you should apply before the end of the tax year following the tax year when the posting ended. A tax year runs from 6 April to 5 April. 

Class 3 Credits

Class 3 credits are available for any period you spent overseas accompanying your serving person from assignments on or after 6 April 1975. There is no time limit for claiming. These protect your entitlement to the State Pension only. 

More information 

Visit the government’s website for further information about NI credits for Service spouses and civil partners.