Carers' Allowance and State Pension
If you are receiving CA when you reach your retirement age, and your state pension is higher than CA, your CA will stop. If your state pension is less than CA, your state pension is topped up with CA to the basic rate of CA £62.10. If your state pension is higher than CA a carer addition of £34.60 is included in the calculation of your pension credit, and a carer premium of £34.60 is included in the calculation of Housing Benefit and Local Council Tax Support.
State Pension entitlement is built up through the National Insurance system. Many parents and carers do not pay National Insurance contributions when they are not working, or when their earnings are low.
It is now possible for parents and carers to build up entitlement to a State Pension through a system of credits. Usually, for each week you get Carer’s Allowance or the underlying entitlement you also get National Insurance Credits and contributions to your Additional State Pension. You may be eligible for a credit in a given week if one of the following applies:
You get Child Benefit for a child or children under the age of 12
You are an approved foster carer
You care for a total of 20 hours a week or more, for one or more people who get Attendance Allowance, Constant Attendance Allowance or Personal Independence Payment (PIP), Disability Living Allowance (the middle or highest rate care component for a disabled child).
Where the need for care is certified by a health or social care professional.
You are still entitled to these credits if you are a married woman and are paying the reduced rate of National Insurance, known as the ‘small stamp’. You are entitled to these credits as long as you meet these qualifying conditions. It is possible to combine credits with National Insurance contributions to make up a qualifying year. This also applies to other types of credits you may be entitled to. Your credits and contributions have to be in the same tax year for you to combine them in this way. Further information is available on the website www.gov.uk.
Pension Credit, Carer’s Allowance and Carer’s Addition
Pension Credit is designed to help pensioners on low incomes who may also have some savings. It is paid to over two and a half million households, but many pensioners in need are failing to claim. The credit currently paid for 2015/16 ensures a minimum income of £151.20 for a single person and £230.85 for couples. If you are a carer you may also be able to get an extra amount on top of that paid as Carer’s Addition.
How does it work?
Pension Credit has two parts: a Guarantee Credit and a Savings Credit.
The Guarantee Credit can be claimed by pensioners who have reached the qualifying age, the qualifying age is gradually increasing from 60 to 65 between April 2010 and 2020. If you are under 60 and have a partner aged 60 or over, your partner should claim the credit for both of you.
Savings Credit has been created to reward pensioners who have a second pension or modest savings. The Savings Credit currently £14.82 a week if you are single, £17.43 a week if you have a partner, is claimed by pensioners who are aged 65 or over.
Even though the ‘overlapping benefit’ rule means that most carers won’t receive CA once they claim their State Pension, they can still apply for it and claim what is an ‘underlying entitlement’. This basically proves that you are a carer. Once you have this underlying entitlement you may be able to get the Carers Addition worth £34.60 added to your maximum guarantee of Pension Credit.
For this reason it is worth carers looking into whether they have entitlement to Pension Credit. Even if you’re only awarded a small amount, Pension Credit is a so-called ‘passport benefit’ and those who claim the guaranteed element of the credit may also be entitled to help with Local Council Tax Support, Housing Benefit, mortgage costs and other health benefits.
For further details about Pension Credit, and to make an application, contact the Pension Service on 0800 99 1234. Lines are open Monday – Friday 8am – 8pm and Saturday 9am – 1pm. A claim form can be completed over the phone and sent to you to sign. You will need the following details when you phone:
Your National Insurance (NI) number. You can find this on payslips, tax papers, or letters from the Department of Work and Pensions (DWP).
Information about any money you have coming in.
Information about any savings and investments you may have.
Alternatively you can write to the Pension Service at:
The Pension Service 8
Post Handling Site B