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Carer's Allowance - effect on other benefits and entitlements

Claiming Carer's Allowance can affect the level of some other benefits and entitlements that you, or the person you care for, receive.

Your benefits

If you receive certain other benefits, including the State Pension, which are paid at a rate that is the same or more than Carer's Allowance, you may not receive payment of Carer's Allowance but may have what is called an 'underlying entitlement'.

Payment of Carer's Allowance is taken into account in full in the calculation of income-related benefits and Pension Credit. However, if you receive Carer's Allowance or have underlying entitlement to it, you will qualify for the carer premium in any Income Support, Employment and Support Allowance (Income Related) and income-based Jobseeker's Allowance that you are entitled to.

If you get Housing Benefit, the Northern Ireland Housing Executive (for tenants) or Land and Property Services (for owner-occupiers) will include an amount for the carer premium when they work out how much Housing Benefit you can get.

Claiming Carer's Allowance can also affect the amount of Pension Credit you receive. If you get Pension Credit, the amount used to work out how much you are entitled to is increased by £32.60.

Carer's Allowance and National Insurance contributions

For each week you receive Carer's Allowance you will normally get a National Insurance (NI) contribution added to your NI record up to the tax year in which you reach State Pension age (unless you are a woman who has chosen to pay reduced rate NI contributions).

You will also normally be credited with an NI contribution for any week you are entitled to Carer's Allowance, but it is not paid because you are also getting Widow's Benefit or Bereavement Benefits at the same or higher weekly rate.

These NI contributions may help you to qualify for the basic rate of certain other benefits or entitlements in the future.

State Second Pension

Since April 2002, for each complete tax year that you receive Carer's Allowance, you will automatically build up State Second Pension, sometimes called additional pension (unless you are a woman who has chosen to pay reduced rate NI contributions).

If you have an 'underlying entitlement' to Carer's Allowance, you will still build up State Second Pension. The extra pension will be paid with your basic State Pension when you reach State Pension age.

Carer’s Credit

Carer’s Credit is a new weekly Class 3 National Insurance and Earnings Factor credit for carers, which can help you to build a better basic or additional State Pension. Carer’s Credit can also help if your spouse or civil partner ever needs to claim bereavement benefits.

The benefits of the person you care for

If you claim Carer's Allowance, it could affect the amount of benefit the person you care for receives.

The person you care for could lose the severe disability premium in their income-related benefit or the addition for severe disability in their Pension Credit. If you only have an underlying entitlement to Carer's Allowance and are not actually paid it, this will not affect the benefits of the person you care for.

Informing the person you care for that you are making a claim

Because your claim for Carer's Allowance may affect the benefits of the person you are caring for, they will be asked to confirm in writing that they know you are claiming Carer's Allowance and that you are caring for them for at least 35 hours a week. This is on the claim form.

Tax Credits

If you receive Child Tax Credit, any Carer's Allowance received will be taken into account as income.

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