State Benefits Pertaining to Long-Term Care

There are a number of State benefits potentially claimable by those in need of long-term care (whatever their age) or by their carers. In this article, we review the main ones. In addition to being relevant to CF8, these State benefits may be tested in CF1, R01, R05, R06 or AF5.

THIS ARTICLE IS RELEVANT TO EXAMINABLE TAX YEAR 2021/22.

Personal Independence Payment

Those who have difficulty with the activities of daily living, for example, feeding themselves, keeping themselves clean, getting themselves ready for the day, or with mobility may be entitled to the personal independence payment – PIP for short.

This can be claimed by those over the age of 16 and under State pension age. It is neither NIC dependent, means-tested nor taxable. Instead, the health condition leading to these difficulties must have already lasted three months and will usually be expected to continue for a further nine months. The exception to this is when the claimant is terminally ill with a life expectancy of fewer than six months.

The payment comprises both a daily living and a mobility component so that the more restricted the claimant is in the activities that they can do, the greater the benefit payable. Claimants must undergo a face-to-face consultation to assess their eligibility for each component and to determine whether they will be entitled to the standard or enhanced rate in each.

Disability Living Allowance

PIPs are replacing the disability living allowance – the DLA for short – for those aged 16 to State pension age, although some claimants are still in receipt of the DLA, and under 16s can make new claims.

It is neither NIC dependent, means-tested nor taxable.

Like the PIP, the DLA also comprises both a care and a mobility component with different rates payable depending on the severity of the claimant’s condition.

While the health condition leading to the claimant’s difficulties must also have already lasted three months, it will usually only be expected to continue for a further six months (rather than nine for PIP), unless the claimant is terminally ill.

Four weeks following entry into a local authority long-term care facility, any payment from the care component will stop.

Attendance allowance

While PIP and DLA cater for those under State pension age, those over State pension age who have been severely disabled for more than six months or who are terminally ill, are entitled to the attendance allowance.

The rate payable depends on whether the claimant needs care either during the day or the night – in which case they are entitled to the lower rate – or both, in which case they can claim the higher rate.

Like PIP and DLA, the benefit is neither NIC dependent, means-tested nor taxable.

The ‘4-week rule’ mentioned in relation to the DLA applies.

Carer’s allowance

Carer’s allowance is payable to those under State pension age who are not in full-time education and are caring for someone for over 35 hours a week who is in receipt of the PIP, DLA, or attendance allowance.

While the benefit is not dependent on the carer’s NIC record, it is means-tested – the claimant cannot earn more than £132 a week after tax, National Insurance, and expenses – and it is taxable. 

Summary

If a client has been or is in the process of being assessed for local authority-funded care, they will have been provided with details of the State benefits that may be available to them. Self-funders may be unaware of these benefits. In both instances, a financial adviser can help in terms of providing further information and encouragement to apply for any benefits the client is entitled to.

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