Category Archives: News

97% of eligible carers do not claim ‘carer’s credit’

New FOI reply reveals 97% of eligible carers do not claim ‘carer’s credit’ – Royal London

08 January 2018

A scheme designed to help carers of disabled people build better state pension entitlement has failed to reach 97% of its target group, according to a new Freedom of Information reply from DWP obtained by mutual insurer Royal London.   The FOI reply indicates that just 3,524 people claimed the national insurance credit in 2016/17, compared with an earlier DWP estimate when the scheme was introduced that 160,000 carers could benefit.

Royal London and Carers UK are now calling for a more proactive approach from government to make sure that carers take up these valuable rights.   Royal London estimates that each year of credits would add £237 per year to a carer’s state pension, or over £4,700 over the course of a typical twenty year retirement.   Assuming over 155,000 carers a year are missing out, this creates a total loss in excess of £700m.

In 2010 the government introduced a new system of National Insurance credits to help bridge gaps in National Insurance records.  It was targeted on carers who were spending at least 20 hours caring, affecting their ability to earn enough to pay National Insurance, but who were not entitled to the Carers Allowance for those doing 35 hours per week of caring, and which brings automatic credits for National Insurance.

To qualify for the credit, a person aged under state pension age must be providing 20 hours per week or more of care for a disabled person who is receiving:

  • Disability Living Allowance care component at the middle or highest rate
  • Attendance Allowance
  • Constant Attendance Allowance
  • Personal Independence Payment – daily living component, at the standard or enhanced rate
  • Armed Forces Independence Payment

If the person being cared for doesn’t get one of the above benefits, the application has to be signed by a ‘health or social care professional’ such as a GP who can confirm the details on the application.

Steve Webb, Director of Policy, Royal London said:

‘These schemes are introduced with the best of intentions, but they become no more than window-dressing if virtually nobody actually takes them up.  Governments cannot simply hope that people find the information on official websites or rely on the occasional ministerial press release.  It is time for proactive communications with those who are meant to benefit so that far more people get the help to which they are entitled’.

Emily Holzhausen OBE, Director of Policy and Public Affairs, Carers UK said:
‘Caring for more than twenty hours per week has a big impact on someone’s ability to hold down a job and pay National Insurance Contributions.  The carer’s credit is a good scheme but it needs much more effective publicity.  Caring often impacts negatively on health, wellbeing and ability to work and yet carers’ contribution to the economy is worth billions a year.   They should not lose out financially in retirement as well’.

Information on how to claim the carer’s credit can be found at: https://www.gov.uk/carers-credit

Information for carers can be found at: https://www.carersuk.org/help-and-advice/financial-support/help-with-your-pension

FINANCIAL IMPACT OF DEMENTIA

RETIREMENT SAVERS ‘FEAR FINANCIAL IMPACT OF DEMENTIA’

 More than two out of five worried about losing control of finances and nearly half worry about their partner

  • But more than half would appoint partner to look after their finances
  • Applications for Lasting Powers of Attorney increase to 650,000 applications a year

Retirement savers are becoming increasingly concerned about the risk of not being able to control their finances because of the onset of dementia but are failing to act, new research* from Key Retirement shows.

The nationwide study by the financial specialist found 43% of over-55s are extremely concerned about the financial impact of suffering dementia in later life rising to nearly half (47%) who worry about their partner being unable to access their money.

But the research among more than 1,000 over-55s shows just one in eight (12%) have acted by setting up Lasting Power of Attorneys (LPAs) to ensure important decisions can still be taken on their behalf. Another 39% say they are considering setting up LPAs but have yet to do so.

The importance of having LPAs in place is growing now that millions of retirement savers and equity release customers may need to manage their finances into later life.

The risks of not having LPAs in place are potentially huge – families will need to apply to the Court of Protection for a Deputyship Order which can typically take many months during which finances can be frozen, or other important decisions may be delayed. The process can also be expensive starting from £400 for an application plus a further £850 + VAT for the work done up to and including the Deputyship Order, and a further £100 for an assessment of the deputy. If no deputy can be found a professional deputy will be appointed and for this the charge will be £1,500 + VAT for the first year, and £1,185 + VAT for each year thereafter.

Key’s study shows more than half (54%) of over-55s would trust their partner or spouse to look after their finances if they were mentally incapacitated while just 28% would trust their son or daughter.

But the study found widespread confusion about what access people have to their spouses’ or partners’ financial or legal affairs without an LPA as the table below shows, headed by 36% thinking that without an LPA they can decide on their healthcare.

ISSUE PERCENTAGE
Decide healthcare for partner 36%
Access bank accounts 26%
Query utility bills in partners’ name 22%
Speak to pension providers 21%
Speak to credit card providers 19%

 

Dean Mirfin, Chief Product Officer at Key Retirement, commented: “Numbers affected by dementia are set to double over the next 25 years and it’s essential that families avoid a costly and time consuming court process.

“Anyone who is taking advantage of pension freedoms or has a drawdown equity release scheme risks having their money frozen if they do not have LPAs until the Court of Protection appoints attorneys. For equity release this means that access to any drawdown facility will be suspended whilst waiting on the court. LPAs are not just about money, they are also about being able to make those important decisions about someone’s healthcare should the need arise.

“Not only is it more cost effective in the long term to do so, you are also ensuring that those who you trust the most are certain to be the ones making important decisions about your finances and your health and welfare when you need them most.”

Data shows around 650,000 applications for LPAs were made last year and around 2.5 million are currently in place**. However around 14,500*** applications are made each year to the Court of Protection.

A Lasting Power of Attorney (LPA) is a legal document which gives the person or persons of choice the power to deal with an individual’s affairs. These trusted people will then become legally appointed attorneys and will be able to use these documents to act on the person’s behalf whenever necessary. There are two types – the property and financial affairs LPA covering money and property matters, which can be used at any time and even made temporary use of, and the health and welfare LPA covering healthcare decisions which can only be used if people lose mental capacity.

Assessing Care Needs and Putting The Right People In Charge

Assessing Care Needs – When Needs Fluctuate.

Assessing care needs can be tough, especially with the immense pressure on Social Workers and the NHS.  Bearing in mind that the family have NO RIGHTS unless there is a Health and Welfare Lasting Power in place, only the person whose needs are being assessed has any rights. And if the carers decide they do not have the ability to make decisions, only the Court of Protection has the right to overrule them. Mental capacity is not constant with most people.

And the standard by which it is judged will vary depending on the urgency and importance of the decision.  There is a massive difference in the standard required to decide which coat to wear today, and deciding whether or not to have a life-saving operation or to sell your home.  The ability to make decisions can change very rapidly, and people may be lapse in and out of capacity quite quickly.  It is quite a complex test and is essentially a legal test rather than anything else, so you can see why Social Workers may have difficulty making relatively snap decisions with people they may hardly know.   The family, given the authority, are in a far better position to make such decisions.

In 2014, a survey of Social Workers showed that more than half of the decisions made by Social Workers about peoples ability to make decisions were wrong.  So arming the family with at least Health & Welfare Lasting Power of Attorney in place.

The video is fairly wide-ranging, but I think you will find it worth watching.

Fluctuating needs and fluctuating mental capacity are a serious problem.  But the situation is far better if both types of Lasting Power of Attorney are in place, so the right people can make decisions or push for extra resources or help. Much better to have power on your side rather than risk having to appeal to the Court of Protection who will tend to accept Healthcare professionals views, even though they don’t really know what your wishes would have been.