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Carers and minimum wage
I picked up on this a few months ago but ive heard nothing since, despite incessant requests to DWP.
I have many clients who work 16 hours per week minimum wage, and also claim Carers Allowance.
£6.19 X 16 = £99.04 so no problemo as it falls below the £100 earnings limit.
Tomorrow Minimum wage goes up to £6.31. £6.31 X 16 = 100.96. This 96p will disallow current CA claimants from entitlement.
The Government keep banging on about making work pay yet a single person claiming CA who isnt working will get £104 a week in benefits, full HB etc etc. Working CA claimants will have to give up their claim and earn £100.96.
How many CA claimants will be unaware of how this change affects them, how much in Overpaid carers will have to be repaid and why the hell cant i find anything that mentions the raising of the £100 earnings threshold?
Can anyone here give me any pointers as to where we go from here?
Thanks
At the risk of getting this horribly wrong, I offer the following observations: Under Universal Credit there is no earnings limit relating to care. Universal Credit was due to be national as of “tomorrow”. (And it looks like it will always be “tomorrow”)
Could it be the case that someone has simply missed the need to increase the £100 disregard because of the mooted changes?
Like I said.. I could be getting this horribly wrong….....
I have asked the DWP for 6 months now and all i get is “We dont know”
The cynic in me is saying that they are gonna recover a helluva lot of money by not increasing the 100 quid thing on purpose.
Richard, I’m not sure what you’re not sure about but ..;
There’s no requirement in Universal Credit to be getting CA to claim a carers element. You have to have a ‘regular and substantial’ caring responsibility. That translates to being entitled to get CA, or would be if it wasn’t for earnings. So the carers element isn’t excluded by the NMW increase.
But that doesn’t affect entitlement to CA itself.
The minimum wage increase/carers allowance maximum wage threshold thing has cropped up a few times in the past. AFAIK (and I’m digging from memory here) DWP suddenly realise a few weeks into October & raise the CA earnings threshold by about a fiver to take them past the next couple of NMW increases. A quick google says it was 2007 when they increased the weekly limit to £100, which sounds about right to me.
The other side, not mentioned above is that in order to remain entitled to CA when the NMW takes them over £100 for 16 hours, is by dropping to 15 hours, at which point many carers are no longer entitled to Tax Credits. Give with one hand, take with the other.
16 x NMW came to more than the ICA/CA limit for a couple of years when NMW started in April 1999 and happened again from Oct ‘06 to Oct ‘07.
IIRC October ‘07 increase in the threshold to £95 was specifically to address this problem so DWP are capable of doing something about it but not seen anything to suggest that it will be changed this time.
If someone needs the 16 hours then it could be worth seeing if the care and childcare disregards (see CPAG p 912) can get them under £100 limit.
Or they could just raise the threshold….........
Obviously they should raise the threshold, but another option for people caught out by this rule might be to consider if they can pay into a pension.
Obviously they should raise the threshold, but another option for people caught out by this rule might be to consider if they can pay into a pension.
Even better with Universal Credit when they get 100% disregard of contributions.