Reduce Carer's Allowance and Carer Support Payment by overlapping benefits

[MaxGhenis]

Fixes #1953

Stacked on #1952 (pension-credit-carers-income). Review pension-credit-carers-income...carers-overlapping-benefits; I'll retarget to main once #1952 merges.

Problem

carers_allowance and carer_support_payment paid the full weekly rate to anyone with 35 hours of care or a reported award, whatever other benefits they had. In law both are reduced by overlapping benefits, State Pension above all. In the calculator, would_claim_carers_allowance defaults to true, so every pensioner carer got Carer's Allowance on top of a full State Pension. Since #1952 counts these benefits as Pension Credit income, the overpaid amount also cut Pension Credit and pension-age Housing Benefit, pound for pound.

On #1952's head (6c22b26), take a carer in England aged 70, with State Pension £6,000 and 35 hours' care a week, in 2026:

• carers_allowance is £4,495.40;
• pension_credit_income is £10,495.40;
• Guarantee Credit is £4,384.40.

In law no Carer's Allowance is payable, so Pension Credit income is £6,000 and Guarantee Credit is £8,879.80.

Law

Texts were fetched from legislation.gov.uk on 2026-10-01 (evidence folder below).

Carer's Allowance. The Social Security (Overlapping Benefits) Regulations 1979 (SI 1979/597):

• Reg 4(1)(a) makes personal benefits overlap when two or more are payable under SSCBA 1992 Parts II and III, "Part 1 of the Welfare Reform Act, Part 1 of the Pensions Act 2014 or under the Jobseekers Act". The Pensions Act 2014 words came in by SI 2015/1985 art 4(3)(a), and the Welfare Reform Act words by SI 2008/1554.
• Reg 12 applies where Carer's Allowance "would ... fall to be adjusted by reference to any other personal benefit (other than additional pension or graduated retirement benefit)". It "shall be reduced by the amount which is, or but for these regulations would be, payable by way of that other benefit". The two together "shall in no case be less than" the unadjusted allowance.
• So payable CA = max(0, CA − overlapping benefits). Every branch of reg 4(5) gives the same total: the higher of the two benefits.
• What overlaps. A new State Pension is a Part 1 Pensions Act 2014 pension, and nothing in the Regulations treats its protected payment as "additional pension". Reg 4(6) defines that as "a pension payable with a personal benefit under Part II of the Contributions and Benefits Act", and reg 2(2) as additional pension under the Social Security Act 1975 or the Social Security Pensions Act 1975. So a new State Pension overlaps in full. An old State Pension overlaps without its additional pension (regs 4(2)(f) and 12).
• Incapacity benefit, SDA and maternity allowance (Parts II and III), contribution-based JSA and contributory ESA (reg 2(1) "contributory benefit") also overlap.
• What doesn't. Industrial injuries benefits are outside reg 4(1)(a). Schedule 1 row 4 adjusts Carer's Allowance only by "unemployability supplement, industrial death benefit or war pension death benefit ... payable to that person as the surviving spouse ... and training allowance". So IIDB, war disablement pensions and AFCS payments do not reduce it.

Carer Support Payment. Carer's Assistance (Carer Support Payment) (Scotland) Regulations 2023 (SSI 2023/302):

• Reg 16(2): "the amount of Carer Support Payment that is to be given to the individual is to be reduced— (a) by the amount of the overlapping benefit paid, or (b) where the amount of the overlapping benefit is equal to or greater than the amount of Carer Support Payment, the value of Carer Support Payment that is to be given to the individual is £0".
• Reg 16(3) lists the overlapping benefits, and reg 16(6) defines two of them. "State Pension" is "a pension payable under Part 1 of the Pensions Act 2014", all of it. "Retirement Pension" is the old pension "excluding any additional pension or graduated retirement benefit".

Scottish Carer Supplement. Reg 14A: "An individual is entitled to Scottish Carer Supplement for each award week in which Carer Support Payment is payable to the individual." Where reg 16(2)(b) makes the CSP to be given £0, I read it as not payable, so no supplement is due. The same Regulations treat a benefit "reduced to £0" as stopping entitlement that turns on payability (regs 23(4)(a) and 23A(1)(b)(i)). Where CSP is reduced but still above £0, the supplement is paid in full. This is a deduction from the text, not a quotation; an independent check of this reading is pending.

Downstream: payment or entitlement.

Rule	Reads	Model
SPC Regs reg 15(3)-(4)(a), (g); HB (SPC) Regs reg 29(3)-(4)	amount after the adjustment	carers_allowance, carer_support_payment (unchanged lists)
UC Regs reg 66(1)(b): CA "subject to any adjustment to the amount payable in accordance with regulations under section 73 of the Social Security Administration Act 1992 (overlapping benefits)"	amount after the adjustment	unchanged
Income tax (ITEPA s.660 Table A)	amount paid	unchanged
SPC Sch I para 4(2) carer addition: "entitled to an allowance under section 70 ... or carer support payment"; HB and UC carer premiums and element	entitlement	is_carer_for_benefits now includes is_entitled_to_carer_benefit
SPC Sch I para 1(1) severe disability addition: withheld if a person is "entitled to and in receipt of" CA or CSP for caring	payment	receives_carer_benefit (now payment after the overlap)
HB Regs reg 75F(1)(h)-(ha), UC Regs reg 83(1)(i)-(ia) benefit cap: "is entitled to" CA or CSP	entitlement	the three is_benefit_cap_exempt_* variables now read is_entitled_to_carer_benefit
Childcare (Free of Charge for Working Parents) (England) Regs 2022 regs 14-15 and 11A: "a person entitled to a specified benefit"	entitlement	disability_criteria now lists is_entitled_to_carer_benefit

Change

• Unreduced amounts. carers_allowance_pre_overlap and carer_support_payment_pre_overlap hold them; the formulas moved there unchanged.
• Payable amounts. carers_allowance and carer_support_payment are now the payable amounts, max(0, pre-overlap − overlapping benefits).
• Overlap lists. carers_allowance_overlapping_benefits and carer_support_payment_overlapping_benefits sum new list parameters, gov.dwp.carers_allowance.overlapping_benefits and gov.social_security_scotland.carer_support_payment.overlapping_benefits. Each lists overlapping_state_pension, incapacity_benefit, sda, maternity_allowance, jsa_contrib and esa_contrib.
• overlapping_state_pension works both ways State Pension enters the model:
  • From components (data, or inputs by component), it is the State Pension less additional_state_pension for an old-system pensioner (state_pension_type BASIC). For a new-system pensioner it is the whole State Pension, protected payment included.
  • It takes the additional pension as a share of the components, so gov.contrib.cec.state_pension_increase and abolish_state_pension carry through.
  • Supplied directly as state_pension (the calculator's usual input), with components 0, it overlaps in full. A user with additional pension can enter components instead.
• is_entitled_to_carer_benefit: pre-overlap entitlement to either benefit, or a carer benefit in payment. A carers_allowance supplied directly as an input still counts as entitlement.
• scottish_carer_supplement is unchanged in code: it is (carer_support_payment > 0) × rate, and carer_support_payment is now the payable amount. Its documentation records the reg 14A reading.

The reduction compares annual amounts. The law works week by week, so for a benefit paid at a constant rate all year the two agree. Where an overlapping benefit starts or stops mid-year, the annual comparison understates the carer benefit payable.

Tests

• YAML. Two new files, with values hand-derived from statutory rates: gov/dwp/carers_allowance_overlapping_benefits.yaml (20 cases) and gov/social_security_scotland/carer_support_payment_overlapping_benefits.yaml (7 cases). The rates are CA and CSP £86.45; full basic State Pension £184.90 and full new State Pension £241.30 (SI 2026/148); Pension Credit standard minimum guarantee £238.00 and carer addition £48.15. Cases cover:

  • State Pension below, equal to and above the allowance;
  • old State Pension with additional pension;
  • new State Pension with a protected payment;
  • reported State Pension above and below the full basic rate;
  • contributory ESA, JSA and maternity allowance;
  • incapacity benefit with the benefit cap exemption;
  • SDA;
  • IIDB and AFCS, which do not overlap;
  • a non-claimant;
  • CA supplied as an input;
  • Pension Credit income and Guarantee Credit;
  • the severe disability addition not withheld by an overlapped allowance;
  • the childcare work condition;
  • CSP with and without the supplement, and the 2025-26 rate.

  All 27 fail on Count Carer's Allowance and Carer Support Payment as Pension Credit income #1952's head and pass here.

• Full YAML suite. policyengine-core test policyengine_uk/tests/policy -c policyengine_uk: 1,324 passed.

• Properties. test_carer_overlapping_benefits_properties.py uses Hypothesis, derandomized. Draws cover carers of any age in England, Wales and Scotland, with State Pension supplied directly, by component or as a reported amount, and with contributory ESA, JSA, incapacity benefit and maternity allowance. The invariants:

  1. Bounds: 0 ≤ payable ≤ unadjusted, and no one has both CA and CSP.
  2. Reg 12 floor: payable + overlapping ≥ unadjusted.
  3. Differential: payable equals max(0, unadjusted − overlapping), with both terms rebuilt in the test from the drawn inputs and statutory rates.
  4. Monotonic: more State Pension never raises the carer benefit and never lowers the carer benefit plus State Pension.
  5. Entitlement, carer status and the PC carer addition do not depend on State Pension.
  6. The supplement is paid exactly when CSP is payable, at the full rate.
  7. Where State Pension covers the benefit, claiming changes nothing: net income, Pension Credit, HB and income tax are equal for claimants and non-claimants.
  8. Pension Credit income equals State Pension + private pension + payable carer benefit, and State Pension + carer benefit = max(State Pension, CA).

  All pass (4 tests in 219 s).

• Mutation check. I applied each of 7 bugs to a scratch copy:

  • no reduction;
  • no floor at 0;
  • old additional pension overlapping;
  • protected payment not overlapping;
  • supplement paid on entitlement;
  • carer status lost with payment;
  • CSP not reduced.

  Results pending.

Enhanced FRS impact

These are real runs of #1952's head (6c22b26) and this branch on enhanced_frs_2024_25.h5 (policyengine-uk-data-private tag 1.57.4). Totals are summed in float64, aggregates only.

£m	2025	2026	2027	2028	2029	2030
Carer's Allowance (base £4,666m in 2025, £4,861m in 2026)	−3.74	−3.90	−4.00	−4.10	−4.20	−4.30
Income tax	−0.05	−0.06	−0.07	−0.08	−0.12	−0.16
Household net income	−3.70	−3.84	−3.93	−4.02	−4.08	−4.14
gov_balance	+3.70	+3.84	+3.93	+4.02	+4.08	+4.14

• Who changes. All of the change is 4 records (0.87k weighted in 2026). They are working-age carers whose contributory ESA, £7,967 a year on average, exceeds Carer's Allowance, which therefore goes to nil. Each household loses about £4,425 net in 2026.
• State Pension moves nothing in the data. No State Pension age carer has State Pension: 12 records, 39k weighted, all with state_pension 0. That is consistent with the law, since a carer with State Pension above the CA rate would not be paid Carer's Allowance. There are no State Pension age CSP recipients.
• Unchanged in every year: Carer Support Payment, the Scottish Carer Supplement, Pension Credit paid, Housing Benefit, Council Tax Reduction, UC, the benefit cap, childcare entitlements and carer status. 2026 poverty is unchanged: BHC 14.36%, AHC 18.58%, deep AHC 6.33%.
• Computed but unpaid amounts. guarantee_credit and severe_disability_minimum_guarantee_addition rise for the same 4 working-age units. No Pension Credit is paid to them; the rise is only because these amounts are computed for every benefit unit.

The calculator is where this bites: pensioner carers with State Pension of at least £86.45 a week no longer get Carer's Allowance, and their Pension Credit and HB rise to match.

Not in this PR

• UC and Scottish CTR counting of CSP. Do UC (reg 66(1)(b): "subject to any adjustment ... in accordance with regulations under section 73 of the Social Security Administration Act 1992") and Scottish CTR (SSI 2012/319 reg 27(5); SSI 2021/249 reg 57(1)(b)) count CSP before or after a reg 16(2) reduction? That reduction is made under the Social Security (Scotland) Act 2018, not SSAA s.73. The literal reading may count the unreduced CSP. The model counts the payable amount, which avoids counting the overlapping ESA, JSA or maternity allowance twice. An independent legal check is pending. Count Carer Support Payment as Council Tax Reduction income #1992 (Scottish CTR) is checking the same question; carer_support_payment_pre_overlap is there if the answer is the unreduced amount. No record in the data is affected.
• Benefits not in the model. Widow's and bereavement benefits, unemployability supplement, industrial and war pension death benefits and training allowance also overlap, but the model has no variables for them. Dependency increases and the SDA limb of reg 12 are out of scope.
• Deferred State Pension. SPC Regs reg 18(1CA) reduces notional retirement pension by Carer's Allowance in payment. The model has no notional (deferred) State Pension, so it has nothing to reduce.

Coordination

• Count Carer's Allowance and Carer Support Payment as Pension Credit income #1952. This stacks on it; I'll rebase after it merges.
• Count contributory ESA, Maternity Allowance, industrial injuries benefit and capped Carer Support Payment as UC unearned income #1958 (merged). uc_unearned_carer_support_payment = min(CSP, CA rate × 52) now reads the payable CSP.
• Count Carer Support Payment as Council Tax Reduction income #1992 (Scottish CTR counts CSP; fixes Scottish Council Tax Reduction income omits Carer Support Payment #1955). If its law check finds pension-age Scottish CTR counts CSP before the reg 16(2) reduction (SSI 2012/319 reg 27(3) and (5)), it should read carer_support_payment_pre_overlap. Whichever merges second reconciles.
• Pension Credit income still omits IIDB, SDA, the AFCS guaranteed income payment and other countable income #1954 branches (other Pension Credit income). Once incapacity benefit, SDA and maternity allowance count as PC income, a carer with one of them has CA reduced by it, and PC counts max(CA, benefit), as reg 15(4)(a) intends.

Evidence

The evidence folder is outside the repo: ~/reviews/uk-carers-overlap-2026-10-01/. It holds legal/ (texts), out/ (research and verification reports, test logs, mutation log) and impact/ (dataset_impact.py, base.json, branch.json, compare_totals.json, compare_detail_2026.json).

axiom: TheAxiomFoundation/rulespec-uk#398 queued

🤖 Generated with Claude Code

[MaxGhenis]

Coordination with #2076, stacked on #2027.

#2076 removes the unused benefit sums from is_benefit_cap_exempt_other.py and is_benefit_cap_exempt_earnings.py. It also moves the afcs and ESA terms out of is_benefit_cap_exempt_other into is_benefit_cap_exempt_health_disability, limited to the claimant and partner. Before, any member's AFCS or contributory ESA lifted the cap.

Whichever lands second: keep this PR's age or earnings test, and drop the afcs and esa_support_component terms and the dead QUAL_* lists from _other and _earnings.