Question about carers allowance, work, DWP and HMRC

[DisabilityIsALifestyleChoice]

I am a carer to my wife who has MS. She is housebound and on the higher rate of PIP.

Until last June, I was working in a £40k p.a. job from which I was made redundant.

As luck would have it, I was waiting for an operation myself, so rushing to a new job wasn't a priority and we were living off savings.

Come November, I applied for Carers Allowance from the August, which was the month my redundancy pay was stated to cover. This was awarded and backdated in December.

Come February I was approached by a small company, and offered a path back to work. This involves being paid for completing some training, and then 8 weeks as a freelance with the intention of being employed full time PAYE from then (May 19th).

So far I have been paid:

£ 600 for the training and
£ 1040 for the 4 weeks so far, in anticipation of another £ 1040.

These have been paid into a separate bank account I setup for the purposes against invoices I submitted in a personal capacity. I haven't spun up a company to work through.

Now wanting to defraud anyone or anything, what is the best way to move forwards to ensure that we are not clobbered because I did something too late, or missed an essential step ?

I have every intention of paying what is owed. I also haven't rushed to do anything as being as old and wise as I am being paid for, I know it's better to have the money first before I give it away.

Would it be as simple as registering for self assessment for the period in question and informing the DWP of the dates and amounts involved ?

Many thanks to all and any who reply. If I have missed something vitally important ... well that is why I am asking here !

Carers allowance stops if you earn more than £196 per week, so you will have to pay back carers allowance for any week in which your earnings are over £196.

Benefits are rather less forgiving than tax - you're expected to report what you're earning as you're earning it.

I'm not very knowledgeable about self assessment so I'll let others answer your tax questions

You have to report the change in circumstances to the DWP ASAP, there is a Carers Allowance Unit with a contact number for this. With carer’s allowance you are supposed to inform them of any change in circumstances, that includes you starting paid employment. It’s important you do that to ensure you are still actually eligible, and that if you are you get the correct amount.

For example if the £1040 was for 1 months work then for that month you were not eligible because you have earned over the £196 per week you are allowed to earn while claiming, and you also won’t be eligible tor the next 4 weeks if you are going to earn the same then.

You need to get on & report it as if you receive an overpayment due to your own failure to report then the DWP place a fine on top of the overpayment which you have to repay.

The pp are correct, the earnings limit is a cliff edge of £196 pw and there are penalties if you don't report changes immediately.

However £1040 per month would work out at £240pw (1040×12/52), and you are allowed to take off certain deductions. These include half of any pension payments and any payment for a carer to allow you to work (either to care for your wife or for childcare if you have a child, up to the value of half your earnings). So you could consider paying extra into your pension to allow you to keep Carer's Allowance - you'd have to pay in the equivalent of £88 pw, although Carer's Allowance is only £83.30, so you'd end up with less money coming in now but that pension payment would still be yours in future. Or if you use a carer, that amount could be deducted and you wouldn't have to pay so much into a pension. The carer can be a friend and doesn't need to be a registered carer, but can't be a relative.

You can also take away expenses that are incurred ‘wholly and exclusively for the purposes of the business’. However the rules for Carer's Allowance may differ from HMRC's treatment of expenses.

If you work through a limited company and pay yourself through PAYE, the Carer's Allowance unit will view you as an employee, not self-empoyed, and you can choose to pay yourself at the earnings limit. The Carer's Allowance unit will accept that as your salary.

Many thanks to all for such quick and helpful responses.

I have walked through the Carers Allowance website and reported changes. (If only applying for PIP was as easy). It took less than 10 minutes and there is a 2,000 character box for explanations, which I provided. And checking my emails they have received. They can't say they weren't told now.

The plan - as is - is that after the 8 weeks at £13 hour maximum 20 hours a week, that I will be offered a permanent salaried position around £40k. Obviously at this point the CA claim is stopped and it's back to life before as if it never existed. (Just for the avoidance of doubt, it's the money that stops. The 24/7 care continues unseen).

I'm replying in case there are others in my position. This thread may be off use to them.

As an aside. the TL;DR here is to not mistake DWP and HRMC, and make sure the DWP are in the loop ahead of HMRC. I will deal with the tax implications if I get the permanent role.

All other things aside, asking you to be freelance before then employing you under PAYE sounds very dodgy.

Ordinarily I would agree. But it's not a fly by night outfit and having engaged with the whole company (because it is that small), then it would be a very good sting operation (including the £600 they have spent on training courses for me). They are exceedingly niche (for now) and wanted to retain me in advance of pulling in a lot more work (which is happening as I type). Since I had fuck all else going on (I mean who wants to hire someone with any caring responsibility) then it was worth a punt.

My wife and I have been invited to an awards ceremony next month as part of this role.

When I was made redundant in 2017 and my previous employer paid for a Penna package, the counsellor suggested a "portfolio career". Which under some pressure they were forced to summarize as "at your age, get what you can" 😀

Thanks again for the highlight - when strangers care you know the world must be a good place underneath it all.

Good for you OP- we have two disabled children and are both trying to keep working alongside caring responsibilities. It’s really tough.

What a great post!