See also To Claim Or Not To Claim for information and answers to the vexed question of if and when to claim this benefit.
What is Carers Allowance?
Taxable Benefit for Carers
Caring for a severely disabled person
Person cared for could be a relative or friend and you don't have to live with them.
Carers allowance can be paid to more than one person in a household (however cannot be carer to the same person)
Non contributory – National Insurance contributions irrelevant.
No savings limit
Aged 16 or over (since 2002, being over 65 is ok for a carer)
Care is regular and substantial at least 35 hours per week. That includes time spent preparing for and cleaning up after the person cared for, even when they are not there.
Not gainfully employed
Not in full time education (so less than 21 hours education per week)
Person cared for recieves a qualifying benefit. Which is: Disability Living Allowance middle rate or higher rate care component, or Attendance Allowance at any rate.
Earnings Limit - £95 per week net after income tax, national insurance, and HALF of occupational pensions – so advisers can suggest reducing working hours down to under £95 threshold.
Care costs paid for disabled person or child under 16 when carer working.
Entitlement to Carers Allowance
Entitled with payment of Carers Allowance
Entitled with payment of Carers Premium
Entitled without payment – 'overlapping benefit' underlying entitlement.
Overlapping Benefit Rule
If any of these paid at more than £55.55 (2011/12 rate) then cannot be PAID Carers Allowance
State Retirement Pension
Incapacity Benefit / Contribution Based Employment and Support Allowance
Contribution Based Jobseekers Allowance
State training Allowance
Severe Disablement Allowance
If overlapping benefit is paid at less than the basic rate of Carers Allowance (£55.55 in 2011/12) then it is topped up with Carers Allowance
Any amount of top up from Carers Allowance means that Carers Allowance is being paid.
Overlapping Benefits Example
Rosie is incapable of work and receives Incapacity Benefit. She cares for her father who recieves low rate Attendance Allowance. Rosie makes a claim for Carers Allowance.
Rosie cannot be paid Carers Allowance as she is receiving Incapacity Benefit at £94.25 (overlapping benefit) and it is paid at a higher rate than Carers Allowance of £55.55.
As she satisfies all the qualifying conditions for Carers Allowance but it cannot be paid due to the overlapping benefit rule, she has what is called an underlying entitlement to Carers Allowance.
Entitlement to Carers Allowance does not stop because payment cannot be made
Underlying Entitlement could entitle a person to additional amounts (premiums) on other benefits or enable them to qualify for other benefits.
Positive Effects of Underlying Entitlement
Could qualify for
Other means tested benefits
Carers premium if already in receipt of Income Support, income based Jobseekers Allowance, Housing Benefit, Council Tax Benefit, income based Employment and Support Allowance.
Extra amount in Pension Credit
Other advantages, for carers under pension age:
National Insurance contribution credits
Help towards satisfying contribution conditions for Incapacity Benefit, contribution based Employment Support Allowance, and contribution based Jobseekers Allowance.
£10 Christmas bonus
Positive Effect of CA on PC/IS/ESA/JSA/HB/CTB
Entitled and paid Carers Allowance
Underlying entitlement to Carers Allowance (not actually paid)
Carers Premium addition.
Award £31 (2011/12) for each claimant or partner who qualifies.
Example 1 - Mary
Mary is 64 and looks after her mother who gets Attendance Allowance. Mary has no savings and her total income is £130 per week. Made up of State Retirement Pension of £95.25 and Pension Credit of £34.75.
Mary applies for Carers Allowance but although she satisfies the qualifying conditions it cannot be paid because her retirement pension of £95.25 is higher than the level of Carers Allowance £53.10. Mary is counted as not being in a state of being paid Carers Allowance.
But because she has an underlying entitlement to Carers Allowance she will now qualify for a Carers Addition of £29.50 in her Pension Credit.
This will increase her amount of Pension Credit she receives from £34.75 to £64.25. Her total income from all sources will increase from £130 to £159.50.
Because Mary is not counted as being in a state of being paid Carers Allowance, her mother would receive Severe Disability Premium were she entitled to it, regardless of Mary's caring.
Example 2 – Bob
Bob is single and receives Income Support of £64.30. He is caring for his brother Ben who receives Disability Living Allowance middle rate care component. Ben can no longer live on his own and has moved in with Bob.
Bob makes a claim for Carers Allowance and is entitled. He is not receiving an overlapping benefit and will be counted as in a state of being paid Carers Allowance. Despite that status he does not actually receive the £53.10 of Carers Allowance, but he does now qualifies for a Carers Premium of £29.50 in his Income Support amount.
His Income Support has now increased from £64.30 to £94.80.
By entering into a state of being paid Carers Allowance, Bob has now prevented his brother Ben from being able to receive Severe Disability Premium.
Warning – always, always, always check disabled persons benefits before making a claim for Carers Allowance / Premium. Because of Severe Disability Premium losses.
Severe Disability Premium / Addition
Severe Disability Premium is part of Income Support, Jobseekers Allowance, Housing Benefit, Couincil Tax Benefit, income based Employment and Support Allowance. Severe Disabilty Addition (same thing, other than slightly different name) is part of Pension Credit.
To qualify, a claimant must be on
Middle rate care component of Disability Living Allowance, or
Higher rate care component of Disability Living Allowance, or
Lower rate Attendance Allowance, or
Higher rate Attendance Allowance
live alone, or
technically live alone – that is, no non dependants aged 18 or over live with them. People living with them who are themselves disabled are not counted.
no one is PAID Carers Allowance for them, which rules out Carers with:
income based Jobseekers Allowance
income based Employment and Support Allowance
Pension Credit – unless also have State Retirement Pension greater than £53.10.
Carers Allowance can have a negative or a neutral effect on severe disability premium.
Example 3 – John
John aged 59 is disabled and receives Income Support and Disability Living Allowance middle rate care component.
He lives alone in rented accommodation, no one receives Carers Allowance for looking after him.
John's daughter is a lone parent and she receives Income Support. She cares for John and has been advised to claim Carers Allowance.
John's Income Support (at 2009/10 rates) is made up of:
Personal allowance £64.30
Disability premium £27.50
Severe disability premium £52.85
=Total Income Support £144.65
If his daughter claims Carers Allowance then he will loose the severe disability premium of £52.85 per week. He would not fulfil the criteria for this premium as someone would now be paid Carers Allowance for looking after him. His daughter would gain the £29.50 carers premium in her own Income Support, but that is less than the loss of money to her father. So overall, they will be better off without claiming Carers Allowance.
Example 3 – John with new circumstances
Later on, John becomes unable to remain living on his own and moves in with his daughter. Since he no longer lives alone, he does not qualify for Severe Disability Premium in his Income Support. He looses £52.85.
This means his daughter should now claim Carers Allowance as it will have no impact on his benefit, but will gain her the Carers Premium in her Income Support – an extra £29.50.
Severe Disability Premium for Couples
Both members of a couple are in receipt of a qualifying benefit (middle or higher rate care component DLA or any Attendance Allowance)
and they live alone (technically), meaning:
no non dependants over the age of 18 live with them, and
anyone else living with them is also disabled
Then they will both qualify for Severe Disability Premium.
In cases like this, it can be possible for both members of the couple to get both the Severe Disability Premium and Carers Premium. For that:
Both in receipt of a qualifying benefit
Both in receipt of an overlapping benefit paid at a higher rate than Carers Allowance.
Both care for each other.
Carers Allowance cannot be paid, but both have an underlying entitlement.
Example – Lucy and James
Lucy (67) and James (70) are both disabled and both are receiving Attendance Allowance. They each apply for Carers Allowance for caring for each other. They have more income from their state retirement pensions than they would get from Carers Allowance.
As they both receive Attendance Allowance, live alone, and nobody is paid Carers Allowance for looking after either of them, Lucy and James both get an additional amount of £52.85 for Severe Disability in their Pension Credit.
Both get a Carer Additional Amount of £29.50 because they have an underlying entitlement to Carers Allowance and are not actually paid it as both are receiving an overlapping benefit.
SDP Lucy £52.85
SDP James £52.85
Both have an underlying entitlement to Carers Allowance because both are in receipt of an overlapping benefit (state retirement pension), so both qualify for a carer addition in Pension Credit
Lucy Carers Addition £29.50
James Carers Addition £29.50
Total increase in PC £59.00
Total Pension Credit now £363.15
Example – Anne and Mark
Anne and Mark are in exactly the same situation as Mark and Lucy above – except that their State Retirement Pensions are less.
Mark's state retirement pension = £45
Anne's state retirement pension = £80
SDP Anne £52.85
SDP Mark £52.85
If Anne claims Carers Allowance, it is 'not paid' because her state retirement pension is more than the £53.10 rate of Carers Allowance.
Carers Addition Anne £29.50
If Mark claims Carers Allowance, he is said to be paid Carers Allowance, because his state retirement pension is less than £53.10. That is bad news, because it causes Anne to loose her severe disability premium/addition.
Carers Addition Mark £29.50
LOSS of SDP Anne -£52.85
Net loss -£23.35
So in the case of this couple, Anne (only) should claim Carers Allowance. Mark should not.
Breaks From Caring
Up to 12 weeks break allowed in any 26 week period.
If carer in hospital, paid for 12 weeks
If disabled child under 16 in hospital, Carers Allowance can be paid up to 12 weeks
If disabled person 16 or over in hospital, Carers Allowance stops after 28 days or before.
Up to 4 weeks carers holiday, or short term stay in care home, allowed.
A carer must have received carers allowance for at least 22 weeks before breaks are allowed.
Claiming Carers Allowance
Complete claim form DS700. Get form from 01253 856123 or at direct.gov.uk/carers
Date of claim is when form is received, unlike DLA. So no advantage in phoning as opposed to just posting off form.
Backdates of up to 3 months can be argued for, are often achievable.
If you claim within 3 months of date of DLA/AA being awarded, the Carers Allowance claim is treated as having been made on the first date of payment of DLA/AA.
DLA/AA/CA awards may allow clients to qualify for Income Support. Submitting Income Support claim at the same time as Carers Allowance claim will allow that also to be backdated to date of DLA/AA award.
As a matter of procedure, it may be best to submit initial claims for Carers Allowance and for Income Support at the same time as you claim DLA/AA. Those claims will fail initially, but you are guaranteed a full backdate all the way on reclaiming when DLA/AA is finally awarded.
Extended Payments of Carers Allowance
If person being cared for dies, then Carers Allowance continues in payment for a further 8 weeks.