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Alongside deep concerns about the impact of further spending cuts, the Budget included a small campaign victory for us!
It is a bit technical but here is a quick summary:
Carer’s Allowance has an earnings limit which means that carers who receive it can only earn up to £100 a week – if they earn over this they lose Carer’s Allowance entirely. However the earnings limit hasn’t been increased at all since 2010 which has meant that carers who were earning just under £100 a week (and many carers find jobs/work hours to do this) were being pushed over the earnings limit when their wages increased each year.
This was a particular problem for people on minimum wage – so, for example, when the minimum wage went up from £6.19 to £6.31 an hour in the autumn, carers working 16 hours a week found that their previous earnings of £99.04 a week were bumped up to £100.96. They were put in an absurd situation of having to ask for a cut in their hours to reduce their earnings below £100 a week, or losing their Carer’s Allowance which is worth over £3,100 a year.
There was a further problem that many carers had to work 16 hours a week to also get Working Tax Credit – so if they cut their hours to keep Carer’s Allowance, they would then lose thousands in tax credits. It was a complete catch-22 of losing thousands of pounds in Carer’s Allowance, or thousands in tax credits or giving up work. The Adviceline received a lot of calls and emails from carers in this situation.
We met with the Minister responsible to call for an increase in the limit, and repeatedly raised it with officials. We wrote to the Secretary of State for Work and Pensions and organised a letter signed by other charities to the Chancellor. It was also a key recommendation of our Caring & Family Finances Inquiry last month.
We are glad that the Government has now listened and, in the Budget today, they announced a rise in the limit to £102 a week. This means that carers on minimum wage could now be able to work for 16 hours without losing their benefits.
It is a very modest increase and, alongside calling for wider, urgent reform of Carer’s Allowance, we have called on the Government to, as a minimum, guarantee increases in the earnings limit in future years in line with minimum wage rises – so this doesn’t happen again when the minimum wage rises.
However we had been told that there simply wasn’t the money to do this, so it is good to see that we can still get some wins in a difficult spending environment.
