Carer's Allowance and the Retirement Pension

Carer's Allowance and the overlapping benefits rule

Carer’s Allowance is an “income replacement” benefit for people who are unable to work because they are caring full-time for a disabled person. Since 2002, Carer’s Allowance has been payable to people aged 65 or over, but it cannot be paid in addition to the Retirement Pension. This is because of the “overlapping benefits” rule. Although an entitlement to both benefits can mean that Carer's Allowance is not payable, for lower income pensioners an “underlying entitlement” to Carer's Allowance can give access to carer additions to means tested benefits such as Pension Credit. For other pensioners however, a claim for Carer’s Allowance may result in them receiving no additional financial support.

Position of successive governments

Neither the Coalition Government, nor the 2015 Government, said that they had any plans to review the overlapping benefits rule as it affects people entitled to both Carer’s Allowance and the Retirement Pension. The previous Labour Government hinted however that it accepted in principle that there should be some recognition in the benefits system of the extra costs faced by carers because of their caring responsibilities. This might have benefited carers over pension age affected by the overlapping benefits rule, by allowing them to keep a portion of their Carer’s Allowance in addition to their Retirement Pension. However, the Labour Government set out no clear timetable for reforming carers’ benefits, saying instead that it intended to look at support for carers as part of its longer-term plans for welfare reform. By the time of the 2010 General election, no further proposals for reform of carers’ benefits had been put forward.

This briefing explains the overlapping benefits rule as it affects carers over pension age, and the rationale behind it. It then looks at the Labour Government’s position on carers’ benefits and at how reforms might have affected those caught by the overlapping benefits rule. The Coalition Government’s position, and statements from Ministers in the 2015 Government, are covered at the end.

Further information

Further information on benefits for carers is given in Library briefing SN00846, Carer’s Allowance. Library briefing CBP-7756, Carers, provides information about the number of carers in the UK and the issues they face. It also covers the rights, benefits and support available to carers and Government policy on caring.