All about the Act

Background to the Act

Carers UK has campaigned for many years for more flexibility and higher pensions for those who are unable to work because they are looking after elderly, sick or disabled friends or relatives. Research shows that one in five carers is forced to give up employment to care, resulting in gaps in their pension record. The attention of Government has focused on those caring for 20 hours a week or more as it is this group that find it most difficult to combine work and care. By 2010, Government estimates that 160,000 of these carers will not building up entitlement to the Basic State Pension (BSP). A further 80,000 will not be building entitlements to the State Second Pension (S2P).

What will the Act achieve?

Carers UK welcomes the Act and congratulates the Government in taking a bold step towards recognising carers’ contribution to society and ensuring that they do not suffer poverty in retirement. A number of measures will help carers build pension entitlement and reduce reliance on means-testing in the future, including:

• the introduction of a new Carer’s Credit for those caring for 20 hours or more a week for someone who is severely disabled should mean that thousands more carers are eligible for a full Basic State Pension and State Second Pension
• the reduction in the number of qualifying years for the full Basic State Pension to 30, meaning that carers with disrupted contribution records can still build up entitlement to a full Basic State Pension
• the removal of the first contribution condition, meaning that someone who has never worked can still qualify for a full Basic State Pension
• the introduction of personal accounts with employer contributions, which should help working carers build up entitlements.

The Carer’s Credit – how many will be covered?

Of the 160,000 carers who will be caring for 20 hours or more a week and not building entitlements to the Basic State Pension, 120,000 will get the Carer’s Credit. Of the 240,000 not accruing entitlements to State Second Pension, 180,000 will gain a new credit. However, Government originally proposed that only those caring for someone receiving Attendance Allowance (AA), Constant Attendance Allowance, or the middle or highest rate of the care component of Disability Living Allowance (DLA) will qualify. This would have meant that 40,000 people caring for 20 hours or more per week would not have got the Carer’s Credit for the BSP. 60,000 would not have accrued entitlement to State Second Pension.

Carers UK was extremely concerned that carers would lose out on credits towards their pension which may mean they are forced to rely on means-tested benefits in old age, even though they have been contributing to society through their caring role.

Which carers would have missed out on the Carer’s Credit under the original proposal?

1. Those who care for someone who does not wish to claim DLA
2. Those caring for more than one person, neither of whom are receiving the right benefits
3. Those caring for someone claiming Incapacity Benefit or lower rate DLA who should be receiving higher benefits.
4. Those caring for someone on incapacity benefit who needs significant care but does not receive DLA
5. Those who have fluctuating conditions and might be on and off benefit
6. Those caring for someone who goes into hospital long enough to lose their benefits

What is the solution?

Carers UK argued that entitlement to the Carer’s Credit should be based on the carer’s own circumstances, rather than the person they care for. For this reason, entitlement should not be exclusively linked to disability benefits. We proposed that a health or social care professional (GP, social worker, health visitor) should be able to certify that someone is a carer for 20 hours a week. This would ensure that the carers described above would not lose out on this measure.

Government agreed that this proposal was sensible and has committed to exploring how to put it in place as part of the review of the National Carers Strategy. Carers UK welcomed this development and will work with both the Department for Work and Pensions and the Department of Health to ensure that a system is put in place which helps as many carers as possible access the new Credit.

The overlapping benefit rule

Carers are extremely frustrated by the fact that they cannot receive both Carer’s Allowance and a state pension. Carers UK is calling for this rule to be removed so that older carers get the recognition they deserve.

What you can do

• Write to your MP asking them to speak up on carers’ pensions if they get an opportunity to speak on a debate about pensions.
• If you have missed out on contributions to the state pension because of caring, tell us your story. Tell us your story using the online form here.
• Get involved with Carers UK’s campaigning network, Equal Partners.