What is Carer's Allowance?

CARER'S ALLOWANCE

KEY HIGHLIGHTS

• Carer's Allowance rate for FY2017-18 is £62.70 a week
• An individual might be able to claim for Carer's Allowance if the following conditions are met:
• • - If a person spends a minimum of 35 hours a week caring for someone in need of assistance or support
  • - If a person is aged 16 or above
  • - If a person isn't in full-time education or learning for 21 hours a week or more
  • - If a person earns £116 a week or less, after taxes

OVERVIEW

Carer's Allowance (CA) is a financial benefit provided by the UK Government to an individual if he / she is taking care of someone close or in-need of assistance. If an individual spends in excess of 35 hours per week taking care of a family member or companion who is ill or disabled, he / she might be eligible to claim carer's allowance. Also, the person who an individual is taking care off must get relevant benefits for their disability. These benefits may include:

• Attendance Allowance – The allowance or money an individual aged 65 or above gets for their care needs. Care needs, under attendance allowance, is defined as help required for activities such as getting dressed, going to the washroom or assistance to keep the person protected so that they do not hurt themselves. It is applicable for people based in the UK, Wales, Scotland and Northern Ireland
• Armed Forces Independence Payment
• The middle or high rate care element of Disability Living Allowance (DLA) – This allowance or money is provided to people who require extra care needs or mobility needs as a result of their disability. It include two parts called components – the mobility component or the care component; an individual may qualify for either one or both of these
• Either level of the daily living component of Personal Independence Payment (PIP) – PIP is replacing Disability Living Allowance (DLA) for people aged 16-64
• Constant Attendance Allowance (£67.20 or higher) paid with an Industrial Injuries Disablement Benefit (IIDB is for people who are disabled due to an accident at work and is paid by Department of Work and Pensions), or basic rate with a War Disablement Pension (this pension scheme provides financial help if an individual has an illness or injury during his / her service in the Armed Forces before 6 April 2005)

Carer's Allowance is paid at £62.70 a week and this amount is usually increased each April. Also, an individual does not have to be related to, or stay with the person he /she is taking care in order to get Carer's Allowance. An important point to note that, an individual can qualify for Carer's Allowance whether or not he / she is working; however, the person taking care must not be earning in excess of £116 a week. CA is not dependent on National Insurance (NI) contributions and is not based on the personal income or savings of an individual but earnings may have an effect on the entitlement.

CA is taxable and might affect additional benefits an individual might be already getting. Moreover, it can also impact the benefits of the person an individual is caring for. An individual cannot typically get Carer's Allowance if he / she is already claiming State Pension or other income-replacing reimbursement such as contribution-based employment and support allowance. Yet, it's still importance to make a claim because if an individual qualifies in all other respects then they might be eligible to top up income on other benefits they might receive.

Carer's Credit

Carer's Credit (CC) is a NI credit towards State Pension while a person is not making any contributions. An individual may qualify for Carer's Credit if:

• If an individual is aged 16 or over
• If an individual is not getting State Pension
• If an individual does not qualify for Carer's Allowance
• If an individual spends a minimum of 20 hours a week caring for someone
• If an individual is looking after a person who receives a benefit as a result of their illness or disability, such as Attendance Allowance, Disability Living Allowance or Personal Independence Payment

CARER'S ALLOWANCE AMOUNT

The amount received as Carer's Allowance by an individual can be spent anywhere. Even if an individual does not receive a payment for Carer's Allowance due to benefit rules; entitlement to CA permits an individual to get an extra amount, referred to as Carer's Premium. Carer's premiums/additions can be added to or taken into account for:

• Council tax support
• Housing Benefit in England, Wales, Scotland as well as Northern Ireland
• Income Support
• Income-based Jobseeker's Allowance
• Pension Credit
• Universal Credit

The amount corresponding to Carer's Allowance will be paid directly into an individual's bank account, building society account or post office account. In case an individual does not have either of the above mentioned accounts, the Carer's Allowance amount can also be received via a simple payment. An individual can opt to get paid either weekly in advance, or every 4 or 13 weeks in arrears.

ELIGILITY FOR CARER'S ALLOWANCE

The person being taken care off must already be getting one of the below mentioned benefits, which include:

• Armed Forces Independence Payment
• Attendance Allowance
• Constant Attendance Allowance with an Industrial Injuries Disablement Benefit
• Constant Attendance Allowance with a War Disablement Pension
• Disability Living Allowance
• Personal Independence Payment

Also, the person taking care must get Carer's Allowance if all of the following apply:

• Age 16 or above
• Minimum of 35 hours a week are spend taking caring for someone
• Usually living in England, Scotland or Wales, or live abroad as a member of the armed forces
• Not in full-time education
• Not studying for 21 hours a week or more
• Not earning more than £116 a week after tax
• Not subjected to immigration control
• Staying England, Scotland or Wales for a minimum of 2-out- of- the-last-3-years

RESTRICTION OR IMPACT ON OTHER BENEFITS

Carer's Allowance can have an effect on other benefits that both the care-taker and the person-in-need get. When an individual claims for Carer's Allowance, the person being taken care for will stop getting:

• An additional amount for severe disability paid with Pension Credit
• Reduced Council Tax
• Severe disability premium paid with their benefits

HOW TO MAKE A CLAIM

Before an individual looks to claim for Carer's Allowance, it is imperative to make sure they have the following:

• NI number (if a person has a partner they will need theirs too)
• Bank account or building society details
• Employment details
• Details in the latest payslip, applicable if a person is working
• P45 form in case a person has recently finished work
• Details of the course in case a person is studying Additionally, the following details of the person being taken care for are required:
• Address, name, and date of birth
• National Insurance number if the person is 16 or above
• Disability Living Allowance reference if the person is under 16

In order to claim, either click here or get in touch with DNS Accountants for a smooth claim process. Also, if an individual cannot apply online, they can apply by post (address is at the end of the form).

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.