PARLIAMENTARY WRITTEN QUESTION
Carer's Allowance (10 December 2018)

To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the merits of introducing a taper for claimants of carers allowance once the claimant has reached the earnings threshold.

Asked by:
Marsha De Cordova (Labour)

This is an issue that we have looked at closely, particularly in the light of recommendations from the Work and Pensions Select Committee in their report on employment support for carers and support for a taper from other stakeholders.

Carer’s Allowance (CA) is not a means-tested benefit and its primary purpose is to provide a measure of financial support and recognition for people who give up the opportunity of full-time employment in order to provide regular and substantial care for a severely disabled person.

The purpose that the weekly earnings limit serves in CA is very different to that of a taper – it is essentially there to provide a test of whether the carer is in “gainful employment” and, therefore, eligible for CA. Tapers are designed to make sure that work pays in means tested benefits, and already work well for those carers also claiming Universal Credit.

A cost neutral taper would need to begin at a level lower than the current earnings limit. We are concerned that introducing a cost neutral taper, effectively reducing the amount of CA for some, would introduce a disincentive to work for some of those carers with the lowest incomes, as well as significantly complicating the current CA scheme (for example, we would need to put arrangements in place to manually collect details of weekly earnings and adjust CA awards accordingly).

In view of the recent focus on overpayments of CA, it is worth noting that a cost neutral taper would mean more carers would have to report changes of earnings more frequently, thus presenting fresh challenges in terms of making correct payments. For these reasons, we are not in favour of introducing a taper in CA. We will, of course, continue to keep the earnings rules in CA under review to ensure they are meeting their objectives.

Answered by:
Sarah Newton (Conservative)
18 December 2018