Question about Carers Allowance and UC

rbz
rbz Community member Posts: 122 Contributor
edited November 26 in Universal Credit (UC)

My wife receives Carers Allowance and Universal Credit award were reduced by Carers Allowance amount.
Because Carers Allowance is taxable (as well need pay National Insurance contributions from Carers Allowance) my wife use part of Carers Allowance as contribution into Personal Pension and reduces tax bill.
For Tax Credits or Tax there no problems to use Carers Allowance as contribution into Personal Pension (Tax Credit award – increase, Tax bill – decrease).
But for Universal Credit purposes – Carers Allowance reduces UC award by full Carers Allowance amount.
Wonder why UC not take into account contributions into Private Pension from Carers Allowance.
I believe that Carers Allowance must be treated like other taxable income for UC purposes.
Carers Allowance separate taxable benefit, not related with UC as well Carers Allowance – not part of UC.
UC staff offered to contact MP and ask to change legislation. I believe that UC is unlawful doesn’t allow using Carers Allowance as contribution into Personal Pension.
Anyone tried sorting this problem via Tribunal or The Supreme Court?

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Comments

  • poppy123456
    poppy123456 Community member Posts: 61,808 Championing

    Although carers allowance is taxable income, it's not treated as earnings for UC. It's treated as "other Income" and therefore reduces UC £1 for £1.

    It's nothing unlawful, the same rules applied to legacy benefits such as Income Related ESA/JSA and Income Support.

    Your wife needs to make sure that carers element is included in your UC.

  • Emilee
    Emilee Community member Posts: 235 Empowering

    It is an interesting question and not one I had considered before. Other pension contribution payments from income is ignored, carers should be able to contribute to a pension without being worse off financially. The difficulty is, as Poppy said, they do not regard Carer's Allowance as income, despite it being taxable.

  • rbz
    rbz Community member Posts: 122 Contributor
    https://forum.scope.org.uk/discussion/comment/946976#Comment_946976

    Thanks for message.

    Wonder why just some of "unearned"/"other" income is treated like Carers allowance (and you mentioned some other legacy benefits).

    All other "unearned"/"other" income were taken into account after allowable expenses.

    Strange why part of "other" income (Carers allowance) is treated in different way than "other" income like income from investments and other "unearned"/"other" income.

    UC staff offered to contact MP and ask to change legislation.

    But seems current legislation unfair treat part of "other" income.

    From part "other" income take into account expenses, from part not take into account these expenses even they allows these expenses.

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