Carers UK has welcomed the Government announcement that from April 2015 the earnings threshold for Carer’s Allowance will be raised to £110 a week.
Each year, with the uprating of the minimum wage, Carers UK hears from carers whose earnings rise over the earnings threshold by just a matter of pence and who are forced to choose between giving up work, reducing their hours or losing their benefits.
The earnings limit rose to £102 in May 2014. This meant that carers working for 16 hours a week on minimum wage and providing substantial care to an older, disabled or seriously ill loved one could still receive Carer’s Allowance of £61.35 a week. While Carer’s Allowance is the lowest benefit of its kind, it can help offset the extra costs of caring and the huge loss of earnings that many carers face.
However, the minimum wage is increasing to £6.50 from October 2014 which means that many carers again face the impossible situation of either cutting their working hours or losing thousands of pounds a year in financial support from Carer’s Allowance. The Government’s recent announcement will rectify this problem from April next year.
Heléna Herklots, Chief Executive of Carers UK, said: “Carers UK is pleased by the steps the Government is taking to rectify an absurd situation in which carers are forced ask for a cut in their hours or lose vital support from the benefits system. Carers make a huge contribution to our society and many are forced to reduce their working hours or leave work altogether to care around the clock for older, disabled or seriously ill loved ones.
For carers who are able to combine caring with a few hours of low paid work, the earnings limit has caused serious problems.”
Carers often find it difficult to find jobs with the right number of hours that they are able to fit around their caring responsibilities, often turning down extra hours or promotion because they face losing essential support from Carer’s Allowance. Carers also receiving Working Tax Credit are often hit the hardest. If they cut their working hours in order to stay under the Carer’s Allowance earnings limit, they would instead lose thousands of pounds in tax credits.
Carers UK is also urging the Government to put in place a long-term solution so that this conflict does not arise again in the future and to remove the ‘cliff edge’ earnings limit altogether by introducing an ‘earnings taper’.