Carer's Allowance - effect on other benefits and entitlements

Claiming Carer's Allowance can affect some of the benefits and entitlements you or the person you care for receive. This includes State Pension, Income Support, Employment and Support Allowance and Jobseeker's Allowance.

Your benefits

If you receive State Pension or certain other benefits 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 when calculating 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 Housing Executive (for tenants) or Land & 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 £34.60.

Carer's Allowance and National Insurance contributions

For each week you receive Carer's Allowance you will normally get a Class 1 National Insurance (NI) Credit added to your NI record up to the tax year in which you reach State Pension age (unless you are a married woman who chose to pay reduced NI contributions).

You will also normally be credited with a NI credit 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 credits may help you to qualify for 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 automatically build up some additional pension, sometimes called State Second Pension, until 5 April 2016.

If you have an 'underlying entitlement' to Carer's Allowance, you will still build up State Second Pension until 5 April 2016. Any additional pension you are entitled to will be part of your State Pension when you claim it.

If you are a married woman who chose to pay reduced rate NI contributions, you will not be given NI contributions to build up State Second Pension.

Carer’s Credit

Carer’s Credit is a weekly Class 3 National Insurance credit for carers which protects your future entitlement to State Pension and bereavement benefits automatically. The credit may also help you to build up some additional pension, sometimes called State Second Pension, but only until 5 April 2016.

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.

They 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 claiming

Because your claim for Carer's Allowance may affect the benefits of the person you are caring for, they need to know that you are claiming Carer’s Allowance.

If you complete a clerical claim form, the person you are caring for will need to confirm in writing that they know you are claiming Carer's Allowance and that you care for them at least 35 hours a week. There is a  section on  the claim form for them to complete.

If you complete an online application and are entitled to Carer’s Allowance, the person you care for will receive a letter informing them you have been awarded Carer’s Allowance because you care for them at least 35 hours a week.

Tax Credits

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

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