APPENDIX 4
Memorandum submitted by the Carers National
Association (TAB 67)
Carers National Association welcomes the opportunity
to provide evidence to the Committee on this important subject.
Our main points will be restricted to the Working Family Tax Credit
and Child Care Tax Credit and how they will affect parents of
disabled or ill children.
SUMMARY
the need to remove barriers for parents
of disabled children and the working family tax credit;
possible problems associated with
the interaction of the WFTC and Invalid Care Allowance (ICA);
tax credits and the future.
BARRIERS FOR
PARENTS OF
DISABLED CHILDREN
AND THE
WFTC
1. Parent carers frequently report that affordable,
suitable and accessible childcare is very hard to find. As a consequence,
their ability to work is restricted. This was confirmed by recent
research, published jointly by the Joseph Rowntree Foundation
and Family Policy Studies Centre, which found that childcare provision
was generally inadequate and inaccessible for disabled children.[7]
2. This study also indicated that the costs
of finding suitable childcare can often outweigh the income from
work and again prevents the parent from taking up work opportunities.
3. The current structure of the childcare tax
credit also excludes families with a disabled child with complex
needs once the child is older than 11 years. The age limit of
the childcare tax credit assumes that a child of 11 years old
or more will no longer require any such childcare. This would
not be the case for some disabled or ill children who may
continue to need such care up to the age of 18 and possibly beyond.
To remedy this situation, an exemption could be made for disabled
children with complex care needs so that the childcare tax credit
continues until 18.
4. For families with disabled children, finding
an appropriate registered childminder can be a problem. We would
propose that for children in receipt of Disability Living Allowance
(DLA) the same childcare rules as for Invalid Care Allowance (ICA)
are used to allow other forms of care.
5. Finally, there has to be an appreciation
that the working family tax credit would work better if it is
combined with a more sympathetic attitude from employers. This
is particularly important for parents of disabled children. The
study quoted above found that in return for understanding from
employers, parents of disabled children were very committed and
loyal. In encouraging family friendly employment practices, a
greater emphasis needs to be placed on recognising the family
responsibilities of those caring for ill and disabled relatives
of all ages.
THE INTERACTION
OF THE
WFTC WITH INVALID
CARE ALLOWANCE
A further issue is how the working family tax
credit will interact with Invalid Care Allowance, the main carers
benefit. Carers can earn up to £50 per week after certain
disregards and still receive ICA, currently £38.70 per week.
Half of tax paid is disregarded for the purposes of calculating
earnings for ICA. If the carer pays less tax under the WFTC the
amount of tax disregarded will also fall. This would raise the
level of earnings for some carers, taking them over the earnings
limit and they would no longer be entitled to ICA.
Unfortunately, the ICA rules stipulate that
earning even £0.01p over the earnings limit means the loss
of all £38.70 of the benefit. We feel that the intention
could not have been that carers would lose their benefits as a
result of the WFTC. Although only worth a small amount per week,
ICA is valued immensely by carers.
To remedy the above situation, Carers National
Association has been proposing a taper on ICA once the earnings
limit has been exceeded. We have recommended this taper be set
at 50 per cent. For every £1.00 earned over the earnings
limit after disregards, the carer would lose 50p of their ICA.
For example, a carer who earns £10 above the earnings limit,
rather than losing £38.70 of their benefit, they would retain
£33.70. We see this as being in line with strategies which
seek to enable people to take work opportunities, and to continue
and develop their careers whilst still providing a substantial
amount of care for a disabled or ill relative.
THE TAX
CREDITS AND
THE FUTURE
While the Committee is considering implementation
issues, perhaps further consideration could be given to other
forms of tax credits if the Working Family Tax Credit and Disabled
Persons Tax Credits are models which work well.
There are many parallels between the problems
faced by parents of non disabled children and carers of other
dependents such as a elderly parent or disabled spouse in taking
up and remaining in employment. Carers often have to restrict
their type and hours of employment in order to fit in with their
caring responsibilities. Those carers with heavy caring responsibilities
find it particularly hard to cope. As with childcare, funding
replacement care for a disabled relative whilst at work can be
costly and suitable care hard to find.
In its response to the pre-Budget report, Carers
National Association raised the possibility of developing the
tax credit system over time to support carers of adult relatives
who are ill or disabled. This would be in addition to the current
support for carers and based on the principle that ICA would be
maintained as a vital and basic benefit for carers. Such a tax
credit would allow individuals with restricted earning capacity
because of their caring role to continue to pursue a career and
still care for their relative.
Carers National Association
June 1998
7 Caring to Work: Accounts of parents with disabled
children, Carolyn Kagan, Suzan Lewis and Patricia Heaton,
Family Policy Studies Centre, London, May 1998. Back
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