Carer’s Allowance is a benefit distributed by the DWP and is worth up to £3,991 a year, providing significant support during a time of high costs.
To be eligible, claimants must be 16 or over and spend at least 35 hours a week caring for someone who receives a certain disability benefit.
However, claiming Carer’s Allowance may impact eligibility for other benefits for both the claimant and the person being cared for, making it key to check before applying.
How can Carer’s Allowance impact other benefits for the claimant?
A statement on the Department for Work and Pensions (DWP) website reads: “Carer’s Allowance can affect the other benefits that both you and the person you care for get.”
For the claimant, their total benefit payments will usually either go up or stay the same.
Claiming also won’t count towards the benefit cap, which is the limit on the total amount of benefits a person can receive.
However, claimants who are also in receipt of Universal Credit (UC) may see their UC rates reduced by an equal amount to the person’s Carer’s Allowance payment.
But, people who care for someone receiving a disability-related benefit may be eligible for an additional amount of Universal Credit, regardless of whether they receive Carer’s Allowance. This makes it essential to report any changes through their Universal Credit account.
Claiming Carer’s Allowance could also result in additional National Insurance credits, such as Class 1, which can qualify them for other benefits as well as the state pension.
The DWP does emphasise that individuals receiving Working Tax Credit or Child Tax Credit must inform HMRC about their receipt of Carer’s Allowance, as it constitutes a taxable benefit.
While the Carer’s Allowance benefit is not taxed at the point it’s received, it will contribute to other sources of taxable income the person receives, meaning if total income exceeds the current personal allowance of £12,570 a year, tax will have to be paid.
Carer’s Allowance claimants who have reached state pension age (currently 66) and receive Pension Credit will see an increase in their payments if eligible.
How will Carer’s Allowance impact the person being cared for?
If a person starts claiming Carer’s Allowance, the person being cared for will typically stop receiving the severe disability premium paid with their benefits, as well as the extra amount for severe disability paid with Pension Credit.
The person being cared for may also stop getting reduced Council Tax.
People can check if the severe disability payment will stop by contacting whoever pays this benefit, which is usually Jobcentre Plus, their local council, the Pension Service Helpline or Universal Credit.
Who is eligible for Carer’s Allowance?
Claimants must be 16 or over and spend at least 35 hours a week caring for someone who receives the following means-tested benefits:
- Personal Independence Payment (PIP) – daily living component
- Disability Living Allowance (DLA) – the middle or highest care rate
- Attendance Allowance
- Constant Attendance Allowance at or above the normal maximum rate with an Industrial Injuries Disablement Benefit
- Constant Attendance Allowance at the basic (full day) rate with a War Disablement Pension
- Armed Forces Independence Payment
- Child Disability Payment – the middle or highest care rate
- Adult Disability Payment – daily living component.
The claimant must have been in England, Scotland or Wales for at least two of the last three years, must not be in full-time education, and cannot be studying for 21 hours a week or more.
They have to live in England, Scotland or Wales and earn £139 or less a week after tax, National Insurance, and expenses.
People who live in Dundee City, Perth, Kinross or the Western Isles need to apply for Carer Support Payment instead of Carer’s Allowance.
People cannot get Carer’s Allowance if they share the care of someone and the other carer is already claiming the following:
- Carer’s Allowance for that person
- The extra amount of Universal Credit for caring for someone who gets a disability-related benefit for that person.
People can find out how their benefits will be impacted as a whole using a benefits calculator, which is free and anonymous, and several independent organisations offer one, including charity Turn2us and entitledto.
