Can anyone please advise re: my client? - working 16 hours and receiving WTC as lone parent - also getting CA as earnings were, prior to October last year, exactly £84. Minimum wage went up in October, meaning earnings now £88 - cannot reduce hours due to WTC entitlement rules set at 16 hours for lone parents. Cannot elect to reduce wages as minumum wage rules apply. Shouldn't there be a link between minimum wage and CA earnings limit to allow 16 hours work to supplement meagre benefit? Does anyone know what the CA earnings limit will be come April? Client is currently faced with either giving up CA or giving up work - can't be right surely? Any suggestions greatly appreciated.

£84 is the limit for net earnings, after any tax, NI contribs, and half of any occupational or personal pension contribs. She could take out a little private pension scheme to squeeze her net earnings below £84.......

CA earnings limit is 87.00 from April. This earnings limit is linked to the lower earnings limit for NI, increasing every April, (Reg.8, ICA Regs) not to minimum wage - unlike eg. the permitted work earnings limit which goes up in line with minimum wage every October. Hence this problem which will get worse as time goes on if minimum wage continues to increase beyond inflation. Might be a policy argument but DWP could say that there is no policy intention that CA claimants should qualify for WTC.

Only practical solution for client is to go through the earnings disregards for CA, listed in Schedules 1,2 and 3, Computation of Earnings Regs, perhaps especially seeing whether client incurs or could incur, any 'relevant care charges' under Sch.3. See DRH, p.142., CPAG p.889.

Richard Atkinson

Thanks for your feedback. Interesting to note the DWP's statement that there is no intention that recipients of CA should be able to access WTC. Seems like a reasonable proposal to me. Will research disregards as suggested and try to find a way through the tangled web. Thanks again.

Two or three years ago I was aware that a HMRC working group was looking at issues around Working Tax Credit and Carers generally - but I haven't heard of any developments. Social Policy issue, anyone?

I'd be interested to know more about this working group - excuse my ignorance - what does HMRC stand for?

The utterly pompous "Her Majesty's Revenue and Customs."

call me cynical but i would not expect to hear anything from this group before 2010,HMRC is ew name for Inland Revenue following their merger with Customs it is now Her Majesties Revenue and Customs

Maria I don't remember much more. It was when I worked at DIAL UK. The group was looking at the difficulties of combining caring with paid work and the fact that both benefits and tax credits systems are not very user friendly in that context.

I think one idea floated was that access to WTC for carers (poss defined by receipt of or underlying entitlement to CA) should be conditional on say ten or twelve hours work rather than sixteen or thirty. This would obviously make it slightly easier to qualify, enable people faced with a new need to care to reduce hours to fit that committment, and of course twelve hours at minimum wage wouldn't breach the CA earnings limit.

But I don't know what if any progress was ever made, or whether the group is still meeting.

Hello and thanks to all who posted replies. I e-mailed Carerslline and got this reply which may be a possible solution for some, though I'll have to check details and process.

One way that some carers are able to continue working and claiming is that if, in the case of your client, she had previously informed HMRC about her Carer's Allowance claim, her earnings from work may have been taxed (Carer's Allowance is taxable benefit and when added to her earnings, are likely to bring her income into a taxable band). If this is the case, her net earnings from work were and are after the minimum wage increase likely to be below the earnings limit, so she would be able to continue receiving Carer's Allowance.

I'm sure you are aware that the earnings limit for Carer's Allowance is being increased to £87 a week in April - little consolation for those who have lost their benefit now, I know.

Regards

Roz Hampson
Advice & Information Manager
CarersLine 0808 808 7777