I am dealing with a Couple, the husband works reduced hours and claims WTC as a couple, the wife does not work.
They have a daughter (22 years) who has a learning disability. The daughter used to receive low rate care DLA but this has now been increased to the medium rate. The mother meets all criteria for claiming Carers Allowance.
I think I am right in saying that if the wife claims and receives CA then they would lose the premium for a couple within the WTC claim, they also receive some Council Tax Benefit because of their low income and this is where I am not quite sure of the effect, will they lose 20% of the Carers Allowance in total or will they lose 20% of the difference between the Couple Premium in WTC and the Carers Allowance?
Also are there any other stings in the tail I may have missed?

They will still be treated as a couple (and attract the couple allowance) for WTC regardless of whether or not she recieves Carers Allowance. As the Carers Allowance is taxable income, it will need to be declared on any future WTC claim (they needn't declare it at present as it will not increase their taxable income by more than £2,500 over the year). In relation to their Council Tax Benefit claim, they will need to report the change in circumstances but the effect of the income increase will be mitigated in part by an increase in their applicable amount (25.55 pw) as a Careres Premium will be included in the assessment from thereon, In real terms, they'll lose somewhere in the region of £3.76 per week from their Council Tax Benefit but their income will have increased by £44.35 per week.

Hope this helps

Thanks, it's a great help and my client will be delighted to hear the news!

Regards

Make sure mum backdates it three months if Middle care was awarded more than three months ago?

I think in general we should be cautious before advising no need to report certain income changes. Firstly, the TC calculation may already be based on CYI, so the £2,500 buffer is irrelevant. Even if PYI is being used before an income increase happens, the arrival of even a relatively modest income change can raise the income excess above the £2,500 buffer. This could happen, say, if the PYI was £10,000 and the CYI was, £12,000, before the arrival of the Carers Allowance. In this scenario, the arrival of the Carers Allowance would lead to a switch from PYI to CYI, if the change was reported. If unreported, there is a significant risk of an overpayment developing.

Steve

Thanks to you both,
Was aware of backdating rules, but the issues around CYI and PYI are useful, I have advised the client that when they receice CA they may need to report the change to avoid possibility of overpayment.

David