Select Committee on Social Security First Report


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


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1998
Prepared 2 December 1998