Emma raises concerns about impact of Living Wage on Carers

May 12, 2016

On Monday in Department for Work and Pensions Questions, Emma asked why the government had left many worse off as a result of the increase in the national living wage.

Emma raised the question on behalf of a constituent who as a result of the national living wage has found that the slight increase in wage has taken her over the threshold to receive Carers Allowance, leaving her financially worse off than before.

From 1 April 2016, the government introduced a new mandatory national living wage for workers aged 25 and above, initially set at £7.20 – a rise of 50p relative to the current rate on the national minimum wage (NMW).

The Citizens Advice Bureau identified that any individual working 16 hours and who is caring for a disabled person will have their income increased to £115.20 which is £5.20 above the earnings limit to be eligible for Carers Allowance.

This might force people to stop caring or, depending on their employer, reduce their working hours.

Yet, a reduction in working hours to less than 16 could then remove any entitlement to Working Tax Credits.

To avoid the scenario set out above, the earnings threshold to claim carers allowance would have to be raised to £116 a week.

Emma said,

“It is indicative of what a shambles this Government’s welfare reforms are in when the impact of a living wage rise has left thousands of the most vulnerable in society financially worse off. The minister’s response was pathetic and gave no commitment to ensure that they will rectify the situation. It is disgraceful that this government has allowed people who are already living under difficult circumstances, juggling work and caring now find themselves in financial hardship and deprived from benefits they should be entitled to.

The government must immediately rectify this and make sure that people like my constituent who are being paid the living wage do not have to endure further stress and hardship by having their Carers Allowance withdrawn”

You can read Emma’s Question here

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