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Carer Allowance, 'earned' and 'investment' income - what counts?

(11 Posts)
Bumbelbee Tue 11-Apr-17 16:48:43

Does anyone understand Carer Allowance and the definition of 'earnings' and 'investment income'? I don't work, I get CA for someone who gets PIP, and have done for several years. Last year I let my house and have income from the rent (I employ an agent to manage the property and an accountant to manage my tax, and a sizable mortgage). I downsized and moved to a flat, and now have the opportunity to move in with my partner and let the flat as well as the house. Both properties I have a part-ownership in, so not making a huge amount of money, but enough to live on. Losing CA would make a big difference and would mean it's probably not viable to hang on to the flat. CA isn't means tested, but nowhere can I find out if getting 2 lots of rent would be 'investment income' or if it's seen as 'earnings' which might stop the CA. I'm not currently paying NI as I don't work at all as I'm a ft carer, it's all declared for tax as well, totally legit. Anyone know what counts as 'investment income' as opposed to 'earnings'? I prefer to be well informed before I contact the CA Unit to discuss it. Should say that since becoming a carer I claim no other benefits, and can't come close to matching half my previous salary.

delilahbucket Wed 12-Apr-17 08:27:55

Rental income is earnings. You also need to speak to hmrc as it must be declared to them even if no tax is due. If you are renting out more than one property they will also seem it to be a business.

delilahbucket Wed 12-Apr-17 08:28:07

*deem not seem

Bumbelbee Wed 12-Apr-17 13:48:27

Thanks Delilahbucket smile It's all fully declared as income, I already pay some lower rate tax. What I need to understand is if it's regarded by DWP as earnings from an investment or if it's considered as work. Investments don't count as CA isn't means tested, and I could get CA with £20 mil in the bank if only I was so lucky. Work, understandably, has an upper limit as obviously you can't work many hours and still be available as a Carer, and you can only earn up to about £110 a week from working (after certain deductions) before CA is stopped. I don't work, the person I care for takes up too much of my time, so it's about whether letting property is 'unearned' income from an investment (which is it, just a way of investing my lump sum from retirement in the case of my flat) or if the DWP treat it as if it was earning from work. I don't manage the property, totally hands off, no time to do anything. The DWP say they only count income from 'work' on their website but I don't trust them. DWP are just not clear about how they define it, and I wondered if anyone else had been through this and knew.

delilahbucket Wed 12-Apr-17 18:38:45

It is earned income but I wouldn't have thought you are considered to be working for it. With two properties that may differ however. As previously stated, two or more properties rented out and hmrc consider it a business.

Chasingsquirrels Thu 13-Apr-17 18:32:51

It's not earned income - that related to work (employment or self employment).
Rental is investment income.

But if you want to make sure, call the DWP and speak to them to confirm it before you do anything.

Kanga59 Thu 13-Apr-17 22:58:27

Following as this applies to me too. Well, dividends rather than rental income. what did DWP say OP?

greenwold Fri 14-Apr-17 15:08:21

I get CA and the rent from my rental property is considered as investment income so it doesn't count at all. I have notified the DWP of my rental and it went to a decision maker who stated that it wasn't earned income. Agree with a pp that it might be different for two properties as that might be viewed more like a business. You might have to argue it on a case by case basis.

Even if they do consider it to be earned income, if it's only a bit above the £116pw threshold, you could play around with pension payments and any childcare costs to reduce it. I do some p/t work and my wage is higher than £116, but I pay into my pension (they deduct 50% of pension contributions) and have to pay out for childcare, which brings me below £116. It doesn't have to be childcare either, it can be paid care for the person you care for even if they're an adult.

specialsubject Fri 14-Apr-17 17:38:44

Rental income isn't classed as earnings when you want to pay into a pension. I would like to think that would work in your favour but I don't know if that helps.

Bumbelbee Thu 20-Apr-17 00:06:47

Thanks all! I've not had time to call DWP yet but I'll let you know what happens when I do so. I just wish they would make the rules clear, and it's only by chance I found out about this at all as it's not on the website!

Antiopa12 Fri 21-Apr-17 09:18:36

When I took in a lodger 2 years ago in my own home I telephoned Carers Allowance and informed them . They
said they would treat it as earnings , the rent was less than £100 a week so I was able to keep Carers Allowance. I did think it was very unfair as a lodger was not classed like this for people who had a normal job, if I had a few paid hours working I would have lost the Carers Allowance as would have been over the earnings limit yet if someone was working in paid employment a lodger would have had no detrimental impact on their financial situation. I still think this is wrong but at the time I did not have any energy to fight it and it did not impact the Carers Allowance in my circumstances. Maybe with many more people struggling financially this area has now been clarified. The lodger was lovely but did not stay long and I could not bear the hassle of finding someone new and dealing with Carers Allowance again.

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