How Carers' Allowance affects State Pension and Carers' Credit
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 £62.70. If your state pension is higher than CA a carer addition of £34.95 is included in the calculation of your pension credit, and a carer premium of £34.95 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 possible for parents and carers to build up entitlement to a State Pension through a system of credits called Carers’ Credits. Usually, for each week you get Carers’ 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 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.
Further information will become available at https://www.gov.uk/carers-credit
Pension Credit, Carers’ Allowance and Carers’ 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 2017/18 ensures a minimum income of £159.35 for a single person and £243.25 for couples. If you are a carer you may also be able to get an extra amount on top of that paid as Carers’ Addition.
How does it work?
Pension Credit has two parts: Guarantee Credit and Savings Credit.
- The Guarantee Credit can be claimed by pensioners who have reached the qualifying age, the qualifying age is gradually increasing to 66 by 2020 in line with the increase in the State Pension age for women rising to 65, and the further increase to age 66 for both men and women. If you are under 60 and have a partner aged 65 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 £13.20 a week if you are single, £14.90 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 £34.95 added to your maximum guarantee of Pension Credit.
It is worth carers enquiring 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 Credit Claim Line on 0800 99 1234 (Textphone 0800 169 0133). Lines are open Monday – Friday 8am – 6pm. A claim form can be completed over the phone and sent to you to sign, or a paper copy can be sent to you to fill in at home with the help of a friend, relative, or health and social care professional or volunteer. You will need the following details when you phone or are filling in the form:
- Your National Insurance (NI) number. You can find this on pay slips, 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.