Martin Lewis on carer's allowance and the effect on pensions
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The Department for Work and Pensions (DWP) is urging Britons to check their eligibility for state support as the cost of living crisis continues. Carers Allowance is paid to people who provide care for someone for at least 35 hours a week. If people are eligible it could add an extra £3,624 a year to their household budget.
However, by receiving the support people may face financial knock-on effects on the other benefits they claim.
In its latest guidance, the DWP stated that putting in an application shouldn’t mean that people will end up with less money.
The Government department confirmed that the total benefits a person receives will “usually go up or stay the same” but they shouldn’t decrease.
If people claim income-related Employment and Support Allowance (ESA) and Universal Credit as well as Carers Allowance, their payments will be reduced by the amount of Carers Allowance they receive.
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Under the “overlapping benefits” rules, people are not entitled to receive Carers Allowance if they claim other specific benefits.
These include the contribution-based Employment and Support Allowance, Incapacity Benefit and Maternity Allowance.
People also cannot claim if they receive Bereavement or widow’s benefits, or contribution-based Jobseeker’s Allowance.
If the person who is being cared for claims Severe Disability Premium (SDP) then this payment of £69.40 a week could be stopped when Carer’s Allowance has been claimed.
A person will only receive Severe Disability Premium if they live alone, receive means-tested income, receive the care component of Disability Living Allowance (DLA), or receive the daily living component of PIP.
It is also important to note that applying for Carer’s Allowance could mean the person being cared for stops receiving help towards their council tax bills.
It could also lead to them not receiving an extra amount for Severe Disability paid with their Pension Credit.
This is because the Government classes Carer’s Allowance as income in regards to working out the means-tested benefits.
Pensioners should also be aware they cannot get the full amount of both Carer’s Allowance and state pension at the same time.
This is due to the overlapping benefits rules.
However, if a person’s State Pension is less than £69.70 per week, they can get the difference paid in Carer’s Allowance.
If the carer also claims Working Tax Credit or Child Tax Credit then they must contact HM Revenue and Customs (HMRC) to tell them about the allowance claim.
To be eligible to claim Carer’s Allowance, the person who is being cared for must also be claiming one of the “qualifying benefits”.
These include: Attendance Allowance, Constant Attendance Allowance, Disability Living Allowance, Personal Independence Payment (PIP) or Armed Forces Independence Payment.
Britons must also need to be 16 years of age or over, not in full-time education, and not earning more than £132 a week from employment or self-employment.
This is after deductions for income tax, National Insurance and for pensions.
Britons can make a claim for Carer’s Allowance on the Gov.uk website, or they can call 0800 731 0297 for a form.
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