Boost for carers and pensioners as new tax year starts

Carers can now work for longer without losing a key payment – as the state pension and benefits rise for millions of people.

While pensioners are receiving a bigger increase than the current rate of price rises, benefits are going up at a slower rate.

Carers are among those receiving a 1.7% increase in their benefits, and they will also be able to earn more from their job while still claiming carer’s allowance.

The changes come days after a string of household bills increased, including water charges, energy prices and council tax.

The amount paid in benefits is rising at the same rate as prices, measured by last September’s inflation rate. That was 1.7% – slower than the current rate of 2.8%.

The standard allowance of universal credit, the most common benefit, for a single person aged under 25 has gone up by £5.30 a month to about £317.

For a couple aged over 25, the rise is £10.50 to £628 a month.

Other benefits rising by 1.7% include all the main disability benefits, such as personal independence payment, attendance allowance and disability living allowance, as well as carer’s allowance.

One of those receiving carer’s allowance is Stephanie Swann, who lives in Stockport and cares for her six-year-old disabled son, Joseph, who has cerebral palsy.

She, like others, will now be able to work more hours without the benefit being taken away.

She said the change was “a step in the right direction”.

“Going to work is really important, it’s a sense of identity and purpose but I can only do 11 hours a week or I’ll lose the allowance,” she said.

“The increase means I can probably only do two or three more hours a week, I wouldn’t be able to do any more than that because the admin around Joe can be a full-time job.”

The changes mean:

• Working carers can earn up to £196 per week after certain deductions, up from £151, while keeping the allowance
• The allowance itself will rise to £83.30 per week
• An extra 60,000 carers will receive the money by 2029

There remain concerns over how some people have been forced to repay the allowance, after going only slightly over the earnings threshold.

A DWP spokesman said: “We recognise and value the vital contribution made by carers in supporting some of the most vulnerable in society.”

A new right for additional time off work has also come into force for thousands of families whose babies need to be cared for in neonatal units.

The measures will allow eligible parents to take up to 12 weeks of leave, with statutory pay, on top of any other leave they may be entitled to including maternity and paternity leave.

The state pension has now gone up by 4.1%, to match rising wages, under the so-called triple-lock.

The increase mean it is worth:

• £230.25 a week for the full, new flat-rate state pension (for those who reached state pension age after April 2016) – a rise of £472 a year
• £176.45 a week for the full, old basic state pension (for those who reached state pension age before April 2016) – a rise of £363 a year

In general, you need 35 years of qualifying contributions to get a full state pension.

Work and Pensions Secretary Liz Kendall said: “Our ironclad commitment to the triple-lock gives pensioners across the country the certainty and security they need to live a full life in retirement.

“We are putting more money in people’s pockets and driving up household income.”

The new tax year does see another freeze in income tax thresholds.

This is what is known as fiscal drag. It means that while income tax rates have not risen, the income levels at which they are paid have been frozen, and will continue to be so until 2028.

That will draw more people – as they receive a pay rise – into paying higher rates of tax, or being taxed on a larger proportion of their income.

Additional reporting by Abi Smitton