I am a carer for my husband who has had three strokes. I wasn’t aware that I could claim my state pension, but when I did many thousands of pounds were deducted from the backpayment.
I am still a carer looking after my husband, but am no longer entitled to a carer’s allowance because I am now receiving my state pension.
What difference does my age make to it? We all still have to care for people.
I think it’s most unfair this should be deducted from our pensions that we have worked hard for.
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Retirement finances: Why does carer’s allowance stop at state pension age – I’m still caring for my husband who had three strokes (Stock image)
Steve Webb replies: There is no doubt that carers such as yourself make huge sacrifices and I imagine that lockdown has been especially challenging for you.
Unfortunately we have a benefits system which in many ways still reflects the world of the 1940s and, as a result, carers are not properly recognised.
The root of the problem you have encountered lies in the assumptions which underlay the design of the National Insurance system during the Second World War.
At the time, it was assumed that having a wage was enough to keep you and your household out of poverty.
To help tide people over who didn’t have a wage, a system of ‘National Insurance’ was set up. You paid your contributions in while you were working and then if you were unable to work you got a payout from the National Insurance Fund.
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The designers of the system started with the assumption that the main reasons you might not be in paid work were because you were too old, too sick or because there simply weren’t enough jobs.
As a result, a new system of benefits for retirement, sickness and unemployment was introduced.
The people who designed the system assumed that one wage was enough for a household and that women would be financially dependent on their husbands. Therefore, if the husband died under pension age, benefits were also payable to widows.
One important feature of the system was that you could only qualify for benefit in one of these categories. For example, if you were both unemployed and sick, you only got one benefit.
More than 75 years later, this rule about ‘overlapping benefits’ is still part of the system and is what is causing you the problem.
When the system was designed, they didn’t really think much about the role of carers.
Life expectancy was shorter in the 1940s and the minority who lived a long time and in declining health often saw out their days in a long-stay NHS hospital rather than being cared for by family and friends.
However, as we have started to live longer and as more women have been in paid work, the need to support people who cannot work because of caring responsibilities started to grow.
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As a result, a benefit originally called ‘invalid care allowance’, and now simply ‘carer’s allowance’ was introduced. The rate of the allowance was never as generous as the benefits for the unemployed, sick or retired but at least it was something.
However, although carer’s allowance doesn’t depend on you having a record of National Insurance contributions it is still treated as if it was a National Insurance benefit when it comes to the ‘overlapping benefits’ rules.
As you have found, if you claim your state pension (which is generally higher than carer’s allowance) your carer’s allowance ceases.
The Government could, of course, change these rules, but successive governments over many decades have left them in place.
Most people can see that cutting carer’s allowance as soon as you reach pension age seems unfair, but I assume the Government is afraid of the cost of paying benefit to potentially millions of older carers, especially with an ageing population.
There are however a few small positives to be aware of.
Even if you are not receiving carer’s allowance, provided that you satisfy the rules for it (and have what is known in the jargon as an ‘underlying entitlement’) you can get a higher rate of pension credit if you are on a low income.
You may also qualify for extra help with your council tax bill (though schemes vary from area to area).
You can find more information on the position of carers over pension age on the Carers UK website here.
Finally, if you have not already done so, you could consider applying to your local authority for an assessment of your needs as a carer.
Many local authorities will be under great stress at present and you may have to wait some time, but you have a legal right to have your needs assessed and it may be that the council could do more to help you and your husband in practical ways which will make life easier for you.
You may also find that there are carer support groups in your local area where you could connect with others in a similar position and share experiences.
Ask Steve Webb a pension question
Former Pensions Minister Steve Webb is This Is Money’s Agony Uncle.
He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement.
Steve left the Department of Work and Pensions after the May 2015 election. He is now a partner at actuary and consulting firm Lane Clark & Peacock.
If you would like to ask Steve a question about pensions, please email him at email@example.com.
Steve will do his best to reply to your message in a forthcoming column, but he won’t be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.
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If Steve is unable to answer your question, you can also contact The Pensions Advisory Service, a Government-backed organisation which gives free help to the public. TPAS can be found here and its number is 0800 011 3797.
Steve receives many questions about state pension forecasts and COPE – the Contracted Out Pension Equivalent. If you are writing to Steve on this topic, he responds to a typical reader question here. It includes links to Steve’s several earlier columns about state pension forecasts and contracting out, which might be helpful.