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Can my mum pay me for care? -Carers UK Forum

Can my mum pay me for care?

All about money
Hello, I'm sure this question comes up all the time but the responses seem very dependent on individual circumstances so I thought I'd post mine and see if anyone knows.

My mum has just come out of hospital (after four months) needing full time care - I have stayed with her since she came home, at her house, where we have been supplied with a hospital bed and other equipment. It was immediately clear that she is going to need me there for the foreseeable future overnight and through the day - she is extremely frail, not mobile, bed and chair only and is suffering from anxiety and distress, having terrible panic attacks in the night.

Mum has savings over the cap, and so do I. I have been allowed a year's unpaid leave from work (sabbatical) and so should qualify for carer's allowance, but what I really need to know is can mum pay me a small sum (say £125 per week, under the carer's allowance threshold of £128 per week)? Do I have to let the Tax office know if we do that? Does it mean mum is employing me? There doesn't seem to be a clear answer to this anywhere.

Is there an advice line that can help me with these questions? I've tried Age UK and they are going to get someone to call me, so that might help but if anyone in the meantime can shed any light, it would be wonderful.

I'm also going to need to use the forums regularly for my sanity!
Hi Jean & welcome

I think this is a difficult question to answer.

What jump out to me and I think I've got this right. Carers allowance is taxable. And if Mum was to pay you. Not only would she possible become your employer. You would need to contact the tax office. And declare both carers allowance and the amount you have stated. Even though these two amounts might still bring you below your yearly tax limits. That's if you have not other income pensions etc.

But I think you need to speak to an expert and the tax office.
sunnydisposition wrote:
Tue Mar 23, 2021 3:28 pm
Hi Jean & welcome

I think this is a difficult question to answer.

What jump out to me and I think I've got this right. Carers allowance is taxable. And if Mum was to pay you. Not only would she possible become your employer. You would need to contact the tax office. And declare both carers allowance and the amount you have stated. Even though these two amounts might still bring you below your yearly tax limits. That's if you have not other income pensions etc.

But I think you need to speak to an expert and the tax office.
Many thanks sunnydisposition - yes I think you're right, I need professional advice and much as I'd want to avoid it, talking to the tax office!
I suggest that mum sets this up formally, or you on her behalf, so that there is no question of "deprivation of assets" later.
The county councils can usually recommend a "payroll service" for those receiving direct payments, that's what you probably need, they can deal with tax issues.

It might be better to forget about CA and mum pay you a proper rate for the job, bearing in mind that a nursing home might cost up to £1200 or even more a week!
Your mum can give you £3000 per year and if done before the new financial year in April the amount would be £6000. I don't think this counts as income because it's a gift. There was a recent article in the FT about it.

Everybody has a £3,000 annual exemption for IHT purposes and if this annual exemption isn't used, it can be carried forward for a single year, which would mean a total exemption of £6,000.

£3000 would be less than £120 per week but at least it would be something to help you. It sounds like your mum appreciates what you are doing for her.

Good luck to you and your mum.
Your mum can give you £3000 per year and if done before the new financial year in April the amount would be £6000. I don't think this counts as income because it's a gift. There was a recent article in the FT about it.

Everybody has a £3,000 annual exemption for IHT purposes and if this annual exemption isn't used, it can be carried forward for a single year, which would mean a total exemption of £6,000.

£3000 would be less than £120 per week but at least it would be something to help you. It sounds like your mum appreciates what you are doing for her.

Good luck to you and your mum.
Don't know how but I've managed to post the same message twice!
It is important to work with an elder law attorney to complete a formal personal care agreement or caregiving contract detailing this arrangement before it begins. Carer's Allowance is a taxable benefit and forms part of your taxable income.

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Daniel, are you in the UK?

The hospital should not have sent mum home like this.
She was entitled to Reablement Care FREE for 6 weeks. Was this done??
If she could not manage with that, they should make alternative arrangements.
What is going to happen in future, you can't be expected to give up your life.