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Forum Home  →  Discussion  →  Universal credit administration  →  Thread

Direct payments as a carer and treatment as income for UC

CA Adviser
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Citizens Advice Calderdale, West Yorkshire

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Hello all
Cl is the carer for her disabled brother and tells us she is in receipt of direct payments. She has received a lump sum in the last month because Social Services notified her that she had been underpaid. The lump sum of direct payments has been treated as income for UC and has knocked out entitlement. I can’t find direct payments as a source of income for UC so am guessing that as it is not specified income it should be ignored for UC?
Is this correct?

Paul_Treloar_AgeUK
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Information and advice resources - Age UK

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Could they be treating it as earned income? Direct payments to carers can mean that the disabled person becomes an employer for the person looking after them.

CA Adviser
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That was my first thought but she states that she is paid directly by the LA.

Gareth Morgan
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I’m with Paul. Either way looks like earnings. Is it taxable?

CA Adviser
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It would seem that the client’s mother was getting the direct payments but the council realised that they had under-paid the mother for the period Nov 2019 to March 21 at the rate of £9.07 a week. However they did not give the back-payment to the mother but paid straight to the client. It would seem to be earnings.

Peter Donohue
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not sure what you are describing here sorry…..Direct payments would normally be paid to the “service user” who may then choose to employ a carer using the DP…some councils will do this thru a managed account or a Trust set up…Either way the basic principle is that if the lump sum has been paid to the “employed carer” (ie the person who is actually employed in delivering the care)  (in this case apparently in lieu of previous underpayments), then it WILL BE income/earnings for UC purposes calculated against the UC of the “employed carer”....... if it has been paid to the service user then it SHOULD NOT be counted in the UC of the carer..unless the SU then passes on the monies to the “employed” carer in lieu of wage reimbursement

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Thank you, that’s very helpful.