has anyone else come across this problem? couple in receipt of WTC/CTC, on basis of him working 16 hours, also claiming CA. partner not working and claiming IB. Everything going fine until... Minimum Wage increases to £5.35ph, so 16 hours works out at £85.60pw which takes him over the earnings threshold for CA (£84). If he reduces his hours they lose the WTC, but if he keeps his hours he loses the CA.

anyone had HMRC accept 15.5 hours as 16 hours (rounding it up?!) have looked at the rules in CPAG (pp1288-9) but can't find any mention of half hours. 15.5 hours would bring him to £82.93pw and under CA earnings threshold.

any other ideas?

The Lower Earnings Limit normally goes up with the minimum wage in October. I'm sure it will be in the news section somewhere. Should mean that your client will be ok for CA.

In fact here it is

http://www.rightsnet.org.uk/cgi-bin/sub_client/search.cgi?template2=news/user_details2.htm&output_number=1&news.ID=911124722231

LEL now at £86 per week. 16 hours at £5.35/hr is £85.60.

thanks so much - that makes things a whole lot simpler!

I can only find reference to the permitted work earnings limit not the lower earnings limit?

Ah. You know what I've done don't you? In my rush to help I may have made a bit of an idiot of myself...

Moral of the story is, if you don't have time to look into it properly, don't answer! Sorry Jo, looks like I may have raised your hopes too soon. Looks like LELs are tied to the tax year.

I think that the following covers the lower earnings limit.

The lower earnings limit is calculated according to sections 5(2)(a) and 44(4) of the SSC&B Act 1992. Section 44(4) defines the basic rate of category A retirement pension. The lower earnings limit is thus the retirement pension minus 99 pence, for any given tax year (section 5(2)(a)).

The change in the pension amount is usually changed by the annual benefit upratings order in April each year.

Have just given the Carers Allowance unit a ring and they confirm that the earnings limit remains at £84 pw.

I would not attempt to tell you how to lose £1.60p weekly to gain £46 + all the passports that go with Carers, enough to say it is easily done, Pension, Child Care, pay another Carers while at work.

Began researching this before I came across your entry as I had heard (and since had carer) affected by minimum wage rise albeit w/o getting WTC. I've just put an entry about this on the disability group for discussion/feedback but thought I'd add my tuppence worth to this.

As CA is a taxable benefit and the wages from your client's 16 hr job are taxable too, shouldn't the tax deducted via PAYE (from combined income) bring carer back below £84pw? Is this too simple or am I missing something here? Was CA stopped as happened to the Liverpool carer who rang our CarersLine?
I'd be glad to know the outcome to your client's battle to retain CA w/o reducing hours. Thanks.

If carer works 16 hours and earns minumum wage this is £85.60pw. No National Insurance or Tax is payable on this amount of earnings, so the earnings are over the CA threshold. The only way round it at present is to use the CA provision for disregarding some of the earnings as highlighted by earlier posting.

Have written to local MPs on this issue and waiting for substantive responses - will let you know if get anywhere! I heard a report about this issue on radio 4 'pm' programme on 14 Nov and the dwp response was that they had no plans to change the rules at present, though they were aware of the problem.