A carer’s allowance not only benefits the individual who is receiving it in the form of an additional income, but it also qualifies the person who they are taking care of for certain state benefits. Through this blog post, we aim to focus on the impact that carer’s allowance has on the universal credit payments that claimants receive. However, we will also discuss other elements that may have a significant impact on universal credit, as well as the eligibility criteria for this state benefit.

Does Carer’s Allowance Affect Universal Credit?

Yes, the carer’s allowance affects universal credit. The reason for this is that counts as an income in consideration of your universal credit claim. While a rise in income such as a carer’s allowance may reduce your universal credit claim, it may qualify you for additional credits since you are a carer.

During 2021-2022, the weekly amount for the carer’s allowance is set at £67.60. You may be able to claim this amount if you are able to fulfil the below conditions:

  • You spend a minimum of 35 hours per week caring for someone
  • You are above 16 years of age 
  • You are not in full-time education 
  • You earn less than or equal to £128 per week (after tax, national insurance and expenses)

Additionally, the person that you are caring for must be on either of the following benefits:

  • Attendance Allowance
  • Armed Forces Independence Payment
  • Disability Living Allowance 
  • Personal Independence Payment 

While the carer’s allowance is below the threshold for income tax deduction; however, when combined with other sources of income of an individual and crossing the personal allowance limit of £12,750, the amount you receive as carer’s allowance is taxable.

It must be noted that if someone’s weekly take-home income is more than £128, they will no longer be eligible for a carer’s allowance. If you are already claiming a state pension, you may not be able to qualify for a carer’s allowance.

On the other hand, being eligible for a carer’s allowance will increase the amount you receive via pension credit.

You can get a carer’s premium (an additional amount of payment)if you get a carer’s allowance and are claiming any of the below-listed benefits:

  • Council Tax Support
  • Housing Benefit
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Pension Credit

However, if you spend 20 hours or less taking care of someone, you will no longer be eligible for a carer’s allowance. Instead, you will be able to claim the carer’s credits. This is a national insurance credit that helps in filling gaps in your national insurance payments.

Which Changes In Circumstances Affect Universal Credit?

Certain changes in your circumstances can bear an impact on the benefits you receive including Universal Credit. If you hide such facts from the authorities with the intention to avoid a reduction in your benefits, you may be penalised or taken to court. Therefore, it is advisable if you face any of the following situations, you must inform the relevant authorities by signing in to your Universal Credit account

  • a new mobile number, postal or email address
  • a change in your bank details
  • change of residence due to moving in with a partner
  • having a child
  • changes to your health condition
  • being unable to work due to an illness
  • starting to care for a child or disabled person
  • finding or finishing a job
  • changes to your earnings, savings, investments
  • changes to rental payments
  • changes to your immigration status (in case you’re not a British citizen)

What Counts As Income For Universal Credit?

During your benefits calculation by the DWP, not only is your job-related income(s) taken into account, but the authorities will also consider unearned incomes. These are incomes that individuals receive without having to work.  

Unearned incomes that affect your Universal Credit payments include the following:

  • Jobseeker’s Allowance (new style)
  • Employment and Support Allowance (new style)
  • Pension Income
  • Carer’s Allowance
  • State benefits that aren’t replaced by Universal Credit

For every £1 earned through any of the above means, £1 will be reduced from your Universal Credit payments.

However, the following unearned incomes do not count towards Universal Credit calculations:

  • Child Benefit
  • Child Maintenance Payments
  • Disability Living Allowance
  • Personal Independence Payment
  • Income From Boarders And Lodgers.

When Do I Tell Universal Credit I Have A Job?

You should inform the Department for Work and Pensions immediately when you have a job or an increase in pay. 

In case of finding a job, you are required to provide the below information to the DWP:

  • who your employer is 
  • the date when the job will start 
  • the date by when your pay will increase

It is understandable that with a rise in income, you will face a reduction in your benefits. In the case of Universal Credit, for every £1 that you (or your partner earn), 55p will be counted as income during your Universal Credit calculation. While communicating a change to the DWP, you should state your disposable income in such cases, which is the take-home amount after your deduction of taxes, NIC and pension fund from your gross income.

It must be kept in view that your Universal Credit payment does not automatically stop when you get a job. You will continue to receive the benefit, however, the amount will be reduced depending on your wages.

Does Council Tax Reduction Affect Universal Credit?

If there are changes in the amount of Universal Credit that you are eligible for and these changes bring you into a different income band, there may be a change to the amount of council tax reduction that you qualify for. similarly, if you are no longer eligible for Universal Credit, you may lose your discount on council tax bills as well.

Local council authorities take into account the income bands of residents to apply a discounted rate of council tax on individuals who are either unemployed or on a low income. Therefore, individuals’ incomes (including benefits such as Universal Credit) are taken into account by local authorities when designing a council tax reduction plan for claimants. 

Generally speaking, if someone is on Universal Credit, they may be eligible for a maximum discount of 82.5 per cent on their council tax bills and will be required to pay 17.5 per cent of the total amount. This is still a major financial relief for those struggling to find or maintain a medium to high-income job.

What Is Universal Credit?

Universal Credit is a state benefit for UK citizens above the age of 18 and below state pension age. It aims to provide financial assistance to individuals who are either out of work or on a low income. It is a monthly payment that claimants receive to help them to cover living costs.

Universal Credit has replaced six benefits, referred to as the “legacy benefits” by serving a single payment for households and helping them meet housing and childcare costs. These include:

  • Income Support
  • Income-related Employment and Support Allowance (ESA)
  • Income-based Jobseeker’s Allowance (JSA)
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit

Additionally, it provides support for health conditions, disabilities or the role of a carer that prevents claimants from working full time or working at all.

Who Is Eligible For Universal Credit?

To qualify for Universal Credit, claimants must be able to fulfil the below eligibility criteria:

  • aged between 18 (in some cases it may be 16 or 17) and state pension age
  • unemployed or on low income
  • between the claimant and their partner, total savings are less than £6,000
  • experiencing high costs for childcare
  • suffering from a disability or health condition
  • caring for someone else

The amount of Universal Credit that an individual receives depends on their personal circumstances and income (if any). For instance, someone who is single and younger than 25 years of age will be eligible for Universal Credit amounting to around £257 per month. Meanwhile, this amount will rise to around £509 for someone who is living with a partner and either one of them or both of them are above the age of 25.

Learn more about benefits that you may qualify for by using the Benefits calculators

Conclusion:

While a carer’s allowance may reduce one’s claim on universal credit as it is considered as income, this may be compensated with the additional credits as a carer. However, universal credit is not the only state benefit to be affected by the carer’s allowance, as other benefits tend to be affected as well. Interestingly, being eligible for a carer’s allowance not only benefits the recipient but also the person that they are taking care of as they may also be able to claim certain additional benefits.

FAQs: Does Carers Allowance Affect Universal Credit?

Can you claim both universal credit and the carer’s allowance?

Yes, you can claim both universal credit and a carer’s allowance. However, for every pound claimed through this allowance, you will lose the same amount in your universal credit claim. 

How does a carer’s allowance affect universal credit?

Carer’s allowance is considered as income and may reduce the amount you claim via universal credit. However, it may add credits to your universal credit claim as well since you are a carer. Therefore, for every £1 that you claim on the carer’s allowance, your universal credit will reduce by the same amount. 

How much do carers get on Universal Credit?

The carer element on universal credit is £163.73. However, you must inform the universal credit office when you become a carer as they may not know this even if you are getting a carer’s allowance.

How do I claim a carer’s element on universal credit?

To claim the carer’s element on universal credit, you need to be taking care of someone with a medical condition or disability for at least 35 hours per week. You can apply for the carer’s element online or by making a call to the universal credit office. 

Does backdated carer’s allowance affect universal credit?

Yes, backdated carer’s allowance affects universal credit. You may be able to claim up to three months of the carer’s allowance in backdating as long as you fulfil the desired criteria during this period of time. However, this also means that you were overpaid in universal credit and these payments will be recovered from you by reducing the future amount(s) that you receive until the overpaid amount is completely recovered.

References:

Carer’s Allowance – Citizens Advice.

Carer’s Allowance: Effect on other benefits – GOV.UK

Benefits you can claim as a carer

Does Carer’s Allowance affect Universal Credit? | Personal Finance

Universal Credit: Report a change of circumstances – GOV.UK

Council Tax Support if you get Universal Credit | Council Tax Support if you get Universal 

Getting a job and Universal Credit

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