Carers allowance and private pension.

Dave131313
Dave131313 Online Community Member Posts: 4 Listener
edited October 2021 in Benefits and income
I would like to draw down the 25% tax free amount on a small pension pot that I have. I am 59 years of age. How will this income be assessed in respect of my carers allowance? I also earn £119pw in a part time job. 

Comments

  • JennysDad
    JennysDad Online Community Member Posts: 2,290 Championing
    Hi again @Dave131313 :smile:
    Well done, by the way, for asking the questions - they are what we need. And we will get back to you very soon, I hope.
    Very best to you,
    Richard
    @JennysDad
  • BenefitsTrainingCo
    BenefitsTrainingCo Online Community Member Posts: 2,621 Trailblazing
    Dave131313,

    As Mike says (thanks as ever Mike) there is nothing to worry about here. The carer's allowance earnings limit looks at earnings only. Your earnings are (just) low enough to get it, and the pension draw down won't make a difference.

    Occupational pension payments are specifically not counted as earnings in carer's allowance. 

    However, if you are getting any means-tested benefits (eg Housing Benefit, Universal Credit, Income Support) and assuming this 25% is a lump sum, that could be an issue, due to the capital limit rules. Hope this helps.

    Will
  • VicDandelion
    VicDandelion Online Community Member Posts: 7 Listener
    Hello ?

    Can anyone tell me if this is information is still relevant?

    My partner has accessed a taxfree lump-sum (after being made refundant) to adapt our house to meet my needs and I'm worried sick we shouldn't be claiming carers allowance and need to know if we should stop the claim. It's only just dawned on us because we've both  been rather challenged mentally recently and we think we did ask at the time.

    1 - Could anyone signpost me to the definitive guidance on this please ? 

    2 - Also if he intends to draw a small pension, should it be below the £120 a week limit on earnings? 

    Thanks so much. 
    Kind regards,

    VicDandelion.




  • poppy123456
    poppy123456 Online Community Member Posts: 64,463 Championing
    VicDandelion said:
    Hello ?

    Can anyone tell me if this is information is still relevant?

    My partner has accessed a taxfree lump-sum (after being made refundant) to adapt our house to meet my needs and I'm worried sick we shouldn't be claiming carers allowance and need to know if we should stop the claim. It's only just dawned on us because we've both  been rather challenged mentally recently and we think we did ask at the time.

    1 - Could anyone signpost me to the definitive guidance on this please ? 

    2 - Also if he intends to draw a small pension, should it be below the £120 a week limit on earnings? 

    Thanks so much. 
    Kind regards,

    VicDandelion.




    Hi,

    The lump sum you've received won't affect the carers allowance claim because it's not earnings. Only earnings of more than £120 per week from working affect it. The pension won't affect it either. The criteria is here. https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/carers-allowance/

    However, what could be affected by the lump sum and the pension is any means tested benefits you claim. Means tested benefits are affect by savings/ including the lump sum, if it's more than £6,000 it will affect your benefits by £1 for every £250 over than amount. Anything over £16,000 and you won't be entitled to any means tested benefits. As the money is for adaptions then you'll need to get further advice because it's possible that the amount could be disregarded for means tested benefits.

    For the pension, again it will depend on what benefits you claim. Pension's affect means tested benefits such as Income related ESA/JSA/Income Support and Universal credit. The pension will be counted as income £1 for £1 for any of these you may claim and will reduce your benefits.

    For Contributions based benefits then any pension over £85 per week affects your ESA 50p for every £1 over that amount.

    This is extremely complicated and therefore i'd advise you to get some face to face advice from a local advice centre near you, for the purpose of any other benefits you claim. https://advicelocal.uk/

  • VicDandelion
    VicDandelion Online Community Member Posts: 7 Listener
    @poppy123456

    Thanks for your swifts response ! 

    We claim no means tested benefits  whatsoever but it's carers allowance I'm worried about. 
    I only get PIP and contributions based ESA. 

    Nothing else at all and his and doesn't currently earning a penny .

    I will see the council benefits advisor soon but wanted to make sure about the draw down  so that if it's important I would make that call to DWP but avoid calling unless necessary because they absolutely terrify me .

    Vic 

  • VicDandelion
    VicDandelion Online Community Member Posts: 7 Listener
    Sorry it should say he isn't earning a penny .
  • poppy123456
    poppy123456 Online Community Member Posts: 64,463 Championing
    The lump sum and the pension won't affect carers allowance. Pensions affect contributions based ESA 50p for every £1 over £85.
  • VicDandelion
    VicDandelion Online Community Member Posts: 7 Listener
    Thanks for the information .
    I can't see anything on the government website about it at all .I wish these things were clearer for us to understand .
    Kind regards 
    Vic 
  • poppy123456
    poppy123456 Online Community Member Posts: 64,463 Championing
    Nothing is clear when it comes to benefits and pensions. You really do need to get face to face advice. The link above will tell you what's in your area for advice.

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