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CA and Living Wage
Just checking, is this correct for next April:
The CA earnings limit remains at £110. So anyone doing 16 hours and qualifying for the new Living Wage will not remain eligible for CA from April, unless they can bring their net earnings down, e.g. by making pension contributions?
It looks that way again , this situation arises periodically. Ironically it was only 14 months ago that the then coalition Social Care Minister Norman Lamb trumpeted the rise from £102 - £110 p/w with this press release:
“As the economy begins to recover and we raise the National Minimum Wage to help families on low incomes, it is right that the support we give carers keeps pace. So we have moved to make sure that the support we give to people who carry out valuable work caring for relatives and friends does so. This significant rise in the earnings threshold provides that reassurance.”
Moving the minimum/living wage increase from October - April (if that continues in future years) does at least allow the DWP to align future changes in wages to changes in earnings thresholds.
Thanks Billy. This could cost £50pw or so, to those who either have to give up CA, or drop to 15 hours work say and fall out of WTC.
Looking on the web, I see that the Living Wage version of this issue has been flagged up, eg by Carers UK, who say:
This issue has arisen before and Carers UK has repeatedly urged the Government to put in place reforms to ensure that this conflict does not arise again by, as a minimum, automatically increasing earnings limit each year in line with the National Minimum Wage or Living Wage. However the right long-term solution is to remove this ‘cliff edge’ earnings limit altogether and introduce an ‘earnings taper’ so that the benefit is gradually reduced with earnings.
I suppose at least UC will eventually overtake this problem, in the sense that the carer element of UC (via regular and substantial care) does not have the earnings limit.
Although my understanding is that if someone is getting the Carers Element of UC (or UC generally) they are only going to be credited with Class 3 NI contributions whereas those receiving Carers Allowance get Class 1 contributions (and Class 3 for 12 weeks before and after CA claim).