Carers allowance.

CEON44

Sister in law currently gets carers allowance for looking after a relative. This is her only income at present but in May she intends to draw a works private pension. The amount she will get weekly is slightly more than the £128 weekly limit on earnings. I think she will have to give up the carers allowance but she maintains that private pensions dont count against her as earnings. She was told this by some advice centre. I looked on NIDirect but cant see any mention of private pensions. Any ideas?

BigAl94

Private pension counts as income. As far as I know she will still be able to claim carers allowance but may be taxed as it is also classed as income.
Some info here https://www.carersuk.org/help-and-advice/financial-support/help-with-benefits/other-pension-age-benefits

CEON44

BigAl94 said:

Private pension counts as income. As far as I know she will still be able to claim carers allowance but may be taxed as it is also classed as income.
Some info here https://www.carersuk.org/help-and-advice/financial-support/help-with-benefits/other-pension-age-benefits

Ok thanks. Not sure in what circumstance she will be able to continue getting carers allowance. The limit is £128 per week. Her private pension will be somewhere in the region of £135 pw. She will however continue as a full time carer as there is no one else. 

BigAl94

£128 relates only to earned income. Occupational or personal pensions do not count as earnings and you can be paid Carer’s Allowance in addition to these. 
 
If you do receive taxable income, such as occupational or personal pensions or part-time earnings, you should inform the tax office about your Carer’s Allowance, because it is a taxable benefit. 
 

qwert_yuiop

BigAl94 said:

Occupational or personal pensions do not count as earnings and you can be paid Carer’s Allowance in addition to these. 
 
If you do receive taxable income, such as occupational or personal pensions or part-time earnings, you should inform the tax office about your Carer’s Allowance, because it is a taxable benefit. 
 

Something not quite right here.
Pensions are earnings and taxable except  they’re not?

qwert_yuiop

Of course pensions are a form of earnings, and are taxable, is the correct answer.

BigAl94

qwert_yuiop said:

Of course pensions are a form of earnings, and are taxable, is the correct answer.

That is correct

CEON44

Ok, so it seems that private pensions arent counted as earning but are taxable. 

qwert_yuiop

They are earnings and they are taxable.
i think the confusion arises from the ability to put untaxed income into your pension plan. Sadly, you have to pay tax on the money you take out of the fund. You’re really only deferring tax.

CEON44

qwert_yuiop said:

They are earnings and they are taxable.
i think the confusion arises from the ability to put untaxed income into your pension plan. Sadly, you have to pay tax on the money you take out of the fund. You’re really only deferring tax.

2Thanks Qwert yuiop    Tax isnt the issue here. Yes tax will have to be paid if applicable. The initial question was do you have to report/give up carers allowance when you start to receive a company pension. I also asked the question on the main board and it seems that the pension is not relevant as earnings but is taxable. Heres some quotes:
"60025  The conditions for entitlement are that the claimant

1. is engaged in caring for a severely disabled person for any day and
2. is regularly and substantially engaged in caring for that person and
3. is not gainfully employed and
4. is aged 16 or over and
5. is not in full-time education and
6. satisfies prescribed conditions of residence or presence in Northern Ireland.

60051  A person is in gainful employment on every day in a week where the earnings in the week immediately before are greater than the earnings limit. Earnings in one week affect entitlement to Carer’s Allowance in the following week. It does not matter if the person is still gainfully employed in the following week"

Also this section:

".Pensions - personal benefit

15312 Pensions paid by a former employer are not treated as earnings provided that the payments
1. are for past services and
2. do not import any continuing liability to serve.

[Deleted User]

The confusion arises as to what counts as earnings and what taxable means.
Income from pensions do NOT count as earnings for the purposes of determining whether or not one is entitled to Carers Allowance. It does not affect the £128 amount one can earn from employment.

Taxable means that it counts towards your taxable income. It is not taxed at source. If your total income including Carers Allowance is below the personal allowance of £12500 there is no tax to pay.