Pensions - Articles - Scheme failing carers to build state pension entitlement


A scheme designed to help carers of disabled people build better state pension entitlement has failed to reach 97% of its target group, according to a new Freedom of Information reply from DWP obtained by mutual insurer Royal London. The FOI reply indicates that just 3,524 people claimed the national insurance credit in 2016/17, compared with an earlier DWP estimate when the scheme was introduced that 160,000 carers could benefit.

 Royal London and Carers UK are now calling for a more proactive approach from government to make sure that carers take up these valuable rights. Royal London estimates that each year of credits would add £237 per year to a carer’s state pension, or over £4,700 over the course of a typical twenty year retirement. Assuming over 155,000 carers a year are missing out, this creates a total loss in excess of £700m.

 In 2010 the government introduced a new system of National Insurance credits to help bridge gaps in National Insurance records. It was targeted on carers who were spending at least 20 hours caring, affecting their ability to earn enough to pay National Insurance, but who were not entitled to the Carers Allowance for those doing 35 hours per week of caring, and which brings automatic credits for National Insurance.

 To qualify for the credit, a person aged under state pension age must be providing 20 hours per week or more of care for a disabled person who is receiving:

 Disability Living Allowance care component at the middle or highest rate
 Attendance Allowance
 Constant Attendance Allowance
 Personal Independence Payment - daily living component, at the standard or enhanced rate
 Armed Forces Independence Payment
 If the person being cared for doesn’t get one of the above benefits, the application has to be signed by a ‘health or social care professional’ such as a GP who can confirm the details on the application.

 Steve Webb, Director of Policy, Royal London said:‘These schemes are introduced with the best of intentions, but they become no more than window-dressing if virtually nobody actually takes them up. Governments cannot simply hope that people find the information on official websites or rely on the occasional ministerial press release. It is time for proactive communications with those who are meant to benefit so that far more people get the help to which they are entitled’.

 Emily Holzhausen OBE, Director of Policy and Public Affairs, Carers UK said:‘Caring for more than twenty hours per week has a big impact on someone’s ability to hold down a job and pay National Insurance Contributions. The carer’s credit is a good scheme but it needs much more effective publicity. Caring often impacts negatively on health, wellbeing and ability to work and yet carers’ contribution to the economy is worth billions a year. They should not lose out financially in retirement as well’.

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