Carers Allowance effect on HB and TC?

AsknAnswer2

I've been asked the below questions but I don't know the answers. Would be grateful if anyone could answer these.

1. Carers Allowance is counted as income for child tax credit purposes. How much is tax credit reduced by? (I think it's 41p deduction for every £1 of CA but could be wrong)

2. Carers Allowance is counted as income for housing benefit/council tax benefit, and (I think) child tax credit is too. However, if the person receives an income support top up of £11.90 per week,and the income support carers premium, would that lead to all income being disregarded? (I know that if a person only receives IS then they are entitled to the maximum HB for their LHA calculation but not sure if this is the case if they only get a small portion of IS and other benefits on top).

Any additional information would be helpful too, as I am not akin with carers benefits so can't advise her. The person is a lone parent and will be taking 12 months off work unpaid carers leave to care for a dependent child - the child is on higher rate care for DLA and needs constant care. She has another child too who she is responsible for - that child has no disability. She will return to her job at the end of her leave but until then will have no earned income and her capital is well below the lower limit of £6000.

merlin68

I don't get what you mean? If she's still technically employed, she will be treated as such.
If you are on Is you would get your rent paid up to what your council will pay, you would then have to fund the differrence. Is also entitles you to max tax credits.

AsknAnswer2

There are specific rules relating to whether or not someone is treated as being in remunerative work. IS and Carers Allowance legislation allows her to be treated as not being in remunerative work for a period where she is taking unpaid leave to be a carer, so she will not be treated as being employed for the time she is taking unpaid carers leave. There is no question over her entitlement to CA and IS - she will be entitled to both of those. She'd be entitled to CA now if it weren't for her earnings.

The question is what effect CA will have on tax credit and whether she would be eligible for the maximum allowable for her LHA being only on the IS top up and carers premium.

I've asked for additional information that anyone has in regard to benefits for carers if anyone has it because aside from the CA and IS I know very little about this area so am unable to answer her questions.

merlin68

When we were on Is with carers allowance , we got maximum tax credits. The Ca didn't make no difference. you only need to declare it as income if you work.

AsknAnswer2

Thanks Merlin. I think it does need to be declared though I think the TC's may only be reduced if there is other income that takes the total income over the bracket.

SuziQ

My carers allowance didn't reduce anything except my Income support rate, if that helps. I don't get HB as I have a mortgage, but my Council tax credit didn't get altered either-they told me that as long as I am getting any amount of Income support, I would still get full Council tax credit. I made sure they gave me a form stating that I had told them I was getting carers though, just in case!

AsknAnswer2

Thanks Suzi. I'll next see her on Wednesday so I shall pass the information on to her then.

Anubis_2

SuziQ wrote: »

My carers allowance didn't reduce anything except my Income support rate, if that helps. I don't get HB as I have a mortgage, but my Council tax credit didn't get altered either-they told me that as long as I am getting any amount of Income support, I would still get full Council tax credit. I made sure they gave me a form stating that I had told them I was getting carers though, just in case!

Out of interest, was your IS reduced £ for £ ?

I ask because there may be a small job opportunity fir my husban who is also my carer. Nothing set in stone yet, but would be handy to know the reduction.

Morglin

This benefit/tax credit calculator will give you the figures:


http://www.turn2us.org.uk/

Lin

AsknAnswer2

Thanks Morglin - I don't know her income figures though for last year's employment which will be needed for the tax credit calculation. I've invited her to come round to use my PC for the entitled to calculation but she refuses to touch a computer, and won't tell me her 'private financial affairs'. She doesn't seem to understand that in order to advise her about what her finances will be when she takes the break (it's her that's asked me as I know a little about benefits), I need to know her financial situation now and last year for tax credit purposes. All I could get out of her was that her capital is 'well below' the £6000 lower limit and she will have zero income when she takes her break. I think she's going to struggle to get any advice at all which can be solely applied to her. She wouldn't even tell me what DLA she got, only that her child was in receipt of HRC (she doesn't realise that I can work out the amount from knowing what level of care she's been awarded!). With her only giving me general information, I can only give her general advice.

Thanks everyone though for your input. The main questions which needed clearing up have been answered so she'll just have to go with that unless she's prepared to tell me more about her finances. Sorry if that sounds harsh against her, just frustrated trying to advise her on very limited information.

Anubis_2

AsknAnswer, it sounds a frustrating position, and as you say general advice is all you can give without facts and figures.