POT LUCK
Millions of carers could lose £4,258 a year thanks to virtually unknown rule – what you can do instead
Low income pensioners should check now what help they can get
MILLIONS of unpaid carers risk losing out on thousands of pounds a year due to a virtually unknown rule.
Those looking after family or friends can get £81.90 a week through a benefit known as carer's allowance.
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The payments are to help anyone giving regular care to someone else who is disabled or in ill health.
You can qualify for the support if you spend at least 35 hours a week on caring duties.
Around 1.4million people get the benefit. But many don't know that the rules change when you hit the state pension age, currently 66.
This could leave many at risk of missing out on £4,258 a year, experts have warned.
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Suzanne Bourne from Mobilise, a community for unpaid carers, said: “Understanding the rules and regulations around what you’re entitled to as an unpaid carer can be incredibly complicated.
"Unpaid carers, who already have a huge amount to contend with, must wade through admin sludge to claim support such as carer’s allowance.
"On top of that, they then have to be aware that those payments will stop as soon as you start to receive the state pension.
"It’s not a well understood element of the carer’s allowance rules and can catch people by surprise.
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"It’s vital to know that this cliff edge exists and to plan your finances around it.”
Carer's allowance is stopped if State Pension payments are more than £81.90 a week.
Understanding carer's allowance
There is a similar cliff edge for those under State Pension age, though the amount is higher.
Payments stop if claimants earn more than £151 a week.
With other benefits, like Universal Credit, there is a tapered approach where they reduce gradually the more you earn.
Thousands of working-age carer's allowance claimants have been unknowingly hit by the hard stop figure and been chased to pay back money they didn't know they owed.
Anyone with caring commitments reaching State Pension age can still apply for the benefit, if their pension is worth under the weekly amount.
Anyone who gets over that amount may still qualify for other benefits instead.
The maximum new State Pension weekly amount is £221.20 and the full basic State Pension is £169.50.
Suzanne said: “If your State Pension is less than £81.90 per week, you can claim Carer’s Allowance to top it up to this figure.
"If it’s more than £81.90 per week, you should still go through the process of applying for Carer’s Allowance, as you may be assessed as having ‘underlying entitlement’ - this means the state recognises you’re in need of additional financial assistance and it could lead to a boost in other benefits you’re receiving.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people's National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
"Pensioners on lower incomes should also explore applying for pension credit, which can unlock extra payments to support you with the cost of living.”
If someone's State Pension is £50 a week, for example, they could still qualify for carer's allowance that tops up the amount by £31.90 a week to the full entitlement of £81.90 a week.
It's worth noting that the amount you can get via carer's allowance usually rises each year in April by the rate of inflation, and this is the current amount for 2024/25.
But those over State Pension age and on a low income could qualify for pension credit.
This can top up income for those getting less than £218.15 a week, or £332.95 for couples.
Others who have income over these amounts can also still be eligible if they have extra costs like housing and even if they have savings.
How to check what you can get
A benefits checker can help you understand what help you may be entitled to.
Mobilise has a carer's allowance checker at //forms.mobiliseonline.co.uk/carers-allowance-checker.
You'll need to share some personal details like name, age and locations, plus what hours you spend caring and any income you earn from working.
Charity works out what means-tested benefits you might be entitled to, as well as whether you qualify for carers allowance.
It points out that it doesn't calculate non-means tested benefits and contributory benefits, but it will include these in your results if you’re already getting them.
Entitledto's free works out whether you qualify for various benefits, tax credits and Universal Credit.
If you run out of time to complete the form in one go you can save your results and come back later but you will need to sign in or register.
If you don't want to register, MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data that let you save your results without logging in.
Pension Credit explained
Pension Credit is a benefit which gives you extra money to help with your living costs if you’re on a low income in retirement.
It can also help with housing costs such as ground rent or service charges.
You may be able to get extra help of you're a carer, have a disability, or are responsible for a child.
It also opens up access to lots of other benefits such as the warm home discount scheme, support for mortgage interest, council tax discounts, free TV licences once you’re over 75, and help with NHS costs.
To qualify, you need to be over state pension age and live in England, Scotland or Wales.
If you have a partner, you need to include them on your claim.
Pension Credit tops up:
- your weekly income to £218.15 if you’re single
- your joint weekly income to £332.95 if you have a partner
However, even if your income is higher, you might still qualify if you have a disability or caring responsibilities.
There is also another element to Pension Credit called savings credit. To get this, you need to have saved some money towards your retirement.
You can get an extra £17.01 a week for a single person or £19.04 a week for a married couple.
If you have more than £10,000 in savings, the government uses a calculation to work out how much it adds to your income.
Every £500 over £10,000 counts as £1 income a week. For example, if you have £11,000 in savings, this counts as £2 income a week.
Instead, you're provided with a unique code to note down and use when you want to revisit the questionnaire.
Use to not only find out which benefits you could receive but also to find out how much cash you'll have leftover each month after paying for housing costs.
Usefully, it also includes links to claim for benefits.
If you want to save and compare calculations, you will need to set up a free account with Policy in Practice.
What is Carer's Allowance and who is eligible?
To be eligible for carers allowance you must be aged 16 or over and not be in full time education.
You also must not be earning over £151 a week from employment or self-employment after tax deductions.
Carers will also not be paid more if they look after more than one person.
If you qualify for the benefit you can choose to be paid weekly in advance or every 4 weeks.
You can apply for the carer's allowance online by visiting www.gov.uk/carers-allowance/how-to-claim.
You can also request a form by calling the Carer's Allowance Unit on 0800 731 0297.
Processing time usually takes up to 12 weeks to get a decision on your claim.
Carer's Allowance can be backdated for up to 3 months if you were eligible during that time.
If your state pension is less than the Carer's Allowance amount of £81.90, you can claim Carer's Allowance to top it up to that level.
But if your state pension is more than £81.90, you won't receive any of the benefit.
This is because the State Pension and Carers Allowance are classed as 'overlapping' benefits, which can't be paid at the same time.
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If the government recognises that you are struggling financially as a carer on a pension you can get extra money on other benefits you claim such as Housing Benefit.
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