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My elderly mum’s got dementia and I’m increasingly caring for her. Is there tax or payments help that we can get?

My elderly mum’s got dementia and I think I’m increasingly going to have to care for her. How do I make this work financially?

Are there any allowances or tax benefits available? Would giving up work make more sense financially than finding a carer?

Help available: Looking after a relative can take a financial toll – but there is help available

Lynne Rowland, a tax partner with Kingston Smith, replies: ‘The fact that your mother has dementia will probably mean that some state financial help is available.

Although that support may be aimed at your mother rather than you as her carer, it is likely that there are allowances that could be available to each of you depending on personal circumstances.

For example, anyone with an illness or disability should be able to claim attendance allowance to pay for extra help at home. If your mother qualifies, the good news is that this money is tax free and does not impact on any other income she may be receiving. Beware though – any claim must be supported with evidence such as a care plan or letters from your doctor. If the claim is accepted, your mother could receive up to £83.10 a week.

‘Carer’s Allowance’ is the main benefit for carers. The bad news is that even if you and your mother meet the qualifying criteria it is paid at the modest level of £62.70 a week – and you would have to be providing at least 35-hours of care per week.

Claiming this allowance should give you credits towards your state pension to help fill gaps in your National Insurance record. You can continue to work and claim carer’s allowance, provided your earnings do not exceed £116 per week after tax.

Now the technical stuff: the allowance is taxable, depending on any other sources of income you may have, and will count as income if you are getting a means-tested benefit.

If it is your only source of income it will be below the level at which tax will be paid, but receiving a state pension would be taken into consideration.

Another complexity is that if your mother is receiving means-tested benefits any claim for carer’s allowance that you make could affect how much your mother receives. You need to ensure that you are not disadvantaging each other by making any claims.

As you are thinking of giving up work to care for your mother, anyone who is unable to work because of caring responsibilities may be entitled to Income Support (or Universal Credit in some areas).

This will be dependent on having capital of less than £16,000, and other conditions. The benefits cap should not be affected by a claim for Attendance Allowance or Carer’s Allowance, but you need to watch any other benefits claimed.

If your mother has the financial resources, she could pay for care and you could be part of the support solution. This would generate taxable income in your hands but, if you mother can afford it, perhaps a combination of third party plus family support would be the best solution.

She may be entitled to non-means tested support that could be used to offset the cost, but the family need to address the fact that providing full time care is expensive and can put a strain on relationships.

If financial resources are limited then there are fewer options, and family support is likely to be much more cost efficient than finding a carer – but only if you can afford to give up income of more than the allowances potentially available.