Untangling carer’s allowance

Untangling carer’s allowance

News that overpayments may be clawed back and fears of prosecution highlight the complexity of carer’s allowance. Charlie Callanan explains some complicated rules

Alarm has been raised in the carer community following reports that the Department for Work and Pensions (DWP) is looking to recover payments of carer’s allowance to which some claimants were not entitled.

A report in The Guardian suggests that, following investigations by DWP, more than 1,000 claimants could be prosecuted for benefit fraud while 10,000 carers could receive fines. In either situation, the claimant is likely to be ordered to pay back any overpaid benefit.

One of the main reasons the overpayments of carer’s allowance occur is that when a carer takes a paid job or their hours and earnings increase, they fall foul of the rule on earnings in this benefit. The rule is that a claimant cannot get carer’s allowance at all if their take-home earnings are more than £120 per week. If their earnings are £120 or less, they can get the full allowance. Starting full-time study may also end entitlement to carer’s allowance.

Carer’s allowance is not a means-tested benefit so, unlike benefits such as income-related employment and support allowance (ESA) or universal credit, an assessment is not made of all the claimant’s income and savings. Income other than earnings over £120 and any capital are disregarded. Because the rate of the benefit is so low – just £64.60 a week Ð it may be that some carers mistakenly believe they don’t have to declare their earnings.

Missing out

Of course, there may be many more eligible carers who are missing out on claiming carer’s allowance than those who have allegedly been overpaid benefit.

Some people who qualify may also get the carer premium that is available with some means-tested benefits or the ‘carer’s credit’ towards national insurance contributions.

The main qualifying rules and conditions stipulate that, to get carer’s allowance, a carer must:

  • Be aged 16 or over
  • Look after someone who gets a qualifying disability benefit. These include the daily living component of personal independence payment, the middle or higher rate of the care component of disability living allowance, or attendance allowance
  • Care for a person for at least 35 hours a week
  • Not be in full-time education
  • Not earn over £120 a week, after deductions for income tax, national insurance and half of the contributions towards an occupational or personal pension
  • Satisfy UK presence and residence conditions.

The time spent caring may involve the carer physically helping the person, keeping an eye on them to avoid them getting into danger or giving them practical help such as cooking.

If a carer is studying, their course is likely to be considered full time if their university or college describe it as full time or if they are required to study for 21 hours or more a week. However, this can be a grey area, so any carer in this position should seek advice.

A person who has a disability can act as a carer and claim carer’s allowance. So, for example, both members of a couple may be able to claim it for looking after each other.

Caveats around claiming

Anyone thinking of claiming carer’s allowance should always get advice beforehand. This is because, if it is paid to a carer, the benefits of the person being cared for can be reduced.

Then there are rules called the ‘overlapping benefit’ rules, which mean where the claimant is a carer but already gets a benefit based on their national insurance contributions (eg contributory ESA), they cannot get carer’s allowance at the same time. However, they may still get a carer premium in any means-tested benefits to which they are entitled.

Carer premium is extra benefit that is part of the assessment for income-related ESA, income support, income-based jobseeker’s allowance and housing benefit. The universal credit equivalent is the ‘carer element’.

To get the premium, claimants must get or have an ‘underlying entitlement’ to carer’s allowance. Underlying entitlement means that a claimant qualifies for carer’s allowance but cannot receive it because they get an overlapping benefit. It should be noted that the claimant must still apply for carer’s allowance to get a letter confirming underlying entitlement.

 “Payment of carer’s allowance to a carer can mean the

benefits of the person being cared for can be reduced”

Carer’s credits are national insurance credits that can help people to meet the contribution conditions for certain benefits, including the state pension. Carers can get a class 1 credit for each week in which they get carer’s allowance. A carer who does not qualify for carer’s allowance may still be able to get carer’s credit if they are looking after a person for 20 hours or more per week.

This summary attempts to make the rules on claims clearer. However, trying to explain the conditions for claiming carer’s allowance demonstrates just how complex the rules are. To avoid overpayment of any benefit, we need to reinforce the message to seek expert advice before making claims, and when circumstances change.

Carers UK. What is Carer’s Allowance? www.carersuk.org/help-and-advice/financial-support/help-with-benefits/carers-allowance

Charlie Callanan is an adviser and writer on welfare rights