I am advising a client who is considering taking work of 16 hours per week and who has been entitled to CA for many years but has missed out on premiums because husband has been claiming adult dependent addition on IB instead.

At the current min wage of £5.35 she would earn just under the £87 limit but when the NMW increases to £5.52 in October she will earn £88.32 and so will exceed the earnings limit. Unlikely to have allowable expenses as will live in tied accommodation.

Does anyone know of any plans for the limit to increase? Surely a lot of carers will be caught out by this change as 16 hours at the minimum wage is a fairly common contract.

We raised a similar query with the DWP Benefits Simplification Unit recently, only our query was about the Permitted Work earnings limits being out of synch with NMW upratings and NI Lower Earnings Limit. The rather rambling reply went something like this:

There is no legislative requirement that the Permitted Work earnings limit is increased each year or that it should be linked to the minimum wage. Ministers took the decision in April 199(9?) to align the former therapeutic earnings limit with 16 hours paid at NMW rates and these arrangements carried forward into the Permitted Work rules when they were introduced.

The current limit for Permitted Work is £86 p/w (16 hours @ £5.35 rounded upwards). From April 2007, the National Insurance Lower Earnings Limit is £87 p/w. This would mean that if that limit were adopted at least for part of the year (from April until October when the NMW is increased) if customers were earning £87 p/w they would fall foul of the 16 hours work full time work rule and would lose their entitlement to benefits or be faced with a situation where they had to reduce (albeit slightly) their hours of work.

That position might well change in October when the NMW is increased but we would want to avoid, primarily for reasons of over complicating the benefit system, the see-saw effect whereby we make changes every six months to reflect changes both in the Lower Earnings Limit and then every October the NMW.

So in keeping the linkage between the higher Permitted Work Levels and the NMW, we remove the see-saw effect from in making (sic) alternate linkages as a result of increases in the NMW and the the NI LEL - which would be more customer friendly and far less complex; and increases in the NMW would no longer mean people who work 16 hours a week having to choose between reducing their hours and staying within the Permitted Work rules or losing their entitlement to IB.

I still don't really understand what that is getting at tbh but basically, i think the jist of it is that the DWP are aware that their annual upratings of earnings limits are out of synchronisation with changes to NMW and NI LEL but they're willing to live with it? Maybe take this up with Carer's UK?

Anned - when you say she's "missed out on premiums because her Husband has been claiming the adult dependent addition on his IB" do you mean premiums?

It's just if the client has an underlying entitlement to carers allowance she should still get the carer premium on things such as Income Support and Housing and Council Tax Benefit regardless of whether she actually gets carers allowance paid.

Regards

Nicky

They did not know about underlying entitlement and so she had not claimed Carers Allowance. I was hoping to be able to advise her that she could do so now, but with the rise in the NMW the most she could get would be 3 months' backdated premiums if she takes the job.

How did they get the impression that the dep's addition overlapped with CA? Or have I misunderstood your post?

It sounds to me that someone (DWP?) may have told them about the overlapping benefit rule but failed to tell them about underlying entitlement and possible carer premium entitlement. Would be worth exploring this further with the client.

If DWP was the source of the misunderstanding, then it may be worth making a claim for a Special Payment in lieu of the carer premium under the DWP's Financial Redress for Maladministration policy (link to this is elsewhere on Rightsnet).

http://www.opsi.gov.uk/si/si2007/20072618.htm

Earnings limit increasing to £95 from 1st Oct 2007

Billmcc: thanks for that, great news about the earnings limit.

Sorry, I may have misled you with the way I posted my original query. They were not given any advice about overlapping benefits, they simply did not know that CA was an option.