Carers face net income cut following minimum wage increase

Posted: 10/10/2014

A new minimum wage has come into force this month, with the hourly rate going from £6.31 to £6.50. This news is welcomed throughout the country but concerns have also been raised about the implications this may have on carers and the income they receive through the carer’s allowance.

Carers are entitled to claim a carer’s allowance of £61.35. This is restricted to carers over the age of 16, who provide at least 35 hours of care a week and are earning under £102 a week after tax. The increase in the minimum wage could see the income of carers increase, albeit marginally, which may then push them over the net earnings threshold that is currently in place and remove their eligibility for the carer’s allowance. It is estimated that the increase could cost a carer more than £60 per week.

Charlene McAuliffe, case manager in the personal injury team at Penningtons Manches LLP, comments: “There are an estimated 7 million carers in the UK today, with over 3 million of those combining work with caring responsibilities. The reality is many carers undertake their roles completely unpaid, saving the economy billions every year, as often carers take on their responsibilities out of sheer necessity.

"At Penningtons Manches, we represent many families who find themselves in this situation as a result of a loved one being injured in a life-changing accident. The claims process offers compensation for those who have provided care gratuitously but more importantly can also make sufficient funds available to enable the establishment of a professional care package so that carers can return to being husband or wife, parent or child and ensure a better quality of life for all concerned. The financial impact of caring for a loved one is a real concern for these individuals. We recognise that this option isn’t always available to those who care for injured individuals who are unable to benefit from the claims process and so we really need to see more changes in Government policy which will alter their lives for the better.”

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