Carer's Allowance Supplement - evaluation: qualitative research (annex A)

4. Impact of Carer's Allowance Supplement on carers' finances

Key findings

Typically, carers liked the current payment schedule (two lump sums per year) as it meant they could spend on bigger things and felt they had more to show for it.

Carers used payments in various ways, including spending on Christmas, on general household needs, on home improvements, or on trips and other treats. There was no clear pattern in terms of participants' financial position and how they chose to use the payment.

Carers who were struggling the most financially felt the biggest impact – whether they had spent it on treats or trips away, which they would not have otherwise been able to have, or whether they had spent it on essential household expenses, which they would otherwise have struggled to pay for. Carers who were financially comfortable but had spent it on treats also felt a benefit, as they were unlikely to have had those enjoyable experiences without the payment. The least impact was felt by carers who had spent it on general household needs but who already had enough money to pay for these things.

While carers were grateful for the payment and could identify positive impacts, they tended to say that the payment had not helped their day-to-day finances – they felt they only benefitted during the months that CAS arrived. This was the case regardless of their financial circumstances.

This chapter seeks to shed light on the following research objective:

To provide information on the impact of receiving CAS on the perceived financial wellbeing of carers, exploring:

• the ways, and extent to which, it has impacted on household budgets
• the ways, and extent to which, it has impacted on the financial implications of caring.

Carers' finances

The carers we interviewed for this project fell broadly into three groups in relation to their finances.

One group was really struggling to meet their daily living costs. They had no savings (or extremely limited savings), and often had debt which caused them stress. They had to borrow from family or lenders from time to time, and some months had to go to foodbanks. They frequently worried about finding the money to pay for their day-to-day needs, like food, heating the house, or taxis to hospital appointments.

This situation was most common when no-one in the household worked: for example, among single parent families (including those looking after adult children) or those who had given up work to look after their partner.

"We're really struggling every month. Of course finances worry me, the situation worries me, I'm really stressed – physically and mentally."

Female, 35-54, Caring for partner

The second group did not necessarily have high incomes, but they did not have to worry about paying for daily essentials. They did not have to consider turning to lenders during financially stressful months or using a foodbank. However, there was still some level of pressure about money. They did have to think carefully before buying, or paying for, more expensive things such as a trip away, or housing improvements.

"Last year I decided I'd give driving lessons a go – [my daughter] has a lot of hospital appointments and so do I, and just for the freedom factor as well it seemed sensible to try and drive. So, it's kind of things like that – big things that would benefit us where I'm like 'Right. Can I afford this? Can I do this?' It's more that. But there's always food in the cupboard, […] in regard to food, heating, electric, essentials… they're always, always covered."

Female, 35-54, Caring for child under 18

The third group expressed little to no worry about money issues. This was for a range of reasons. Some people had a partner who was in well-paid work, which allowed them to live comfortably even if they felt that their own income (from Carer's Allowance, CAS and sometimes other benefits) was inadequate to meet daily living costs. Others had already retired when they became a carer. They had anticipated and planned for their current financial situation and, although their income was not high, they often owned their home outright and had minimal outgoings. Other participants had received a cash injection at some point in the past (such as money gained in a divorce, or a life insurance payment), which meant they did not have to worry about money.

"I am very fortunate that my husband has a decent wage, not hundreds, but circumstances mean that we don't have a big outlay ourselves, we are mortgage-free through another circumstance, so my husband's wage kind of keeps us."

Female, 35-54, Caring for adult daughter

The impact of caring on finances

Carers consistently reported that becoming a carer had had a major, negative effect on their household finances. It was more exceptional for carers to say that becoming a carer had made no financial impact (or even had a positive impact).

The main way that caring had affected finances was that participants were unable to work due to their caring responsibilities. Participants had often been working full-time before they became a carer, and one carer had been forced to shut down a business as it became unfeasible to manage her company alongside her caring responsibilities.

Where carers, generally mothers, were looking after their children who were disabled or had additional needs, they had typically been unable to return to work when they otherwise might have done (for example, when their children reached nursery or school age).

Participants stressed that being unable to work also had significant impacts on their wellbeing and sense of identity, as will be discussed in the next chapter. For some participants, this had affected them more than any financial repercussions. Those who had gone back to work after taking a break to care had done so not for financial reasons but mental health ones.

Participants reported issues relating to the conditionality of Carer's Allowance – specifically, the fact that they were not permitted to earn very much (and therefore not able to work many hours) before they became ineligible for it. This meant that some carers who wanted to work – who would have benefitted mentally from having a job and who could have combined part-time work with their care responsibilities – were unable to do so. By going back to work, they would quickly lose Carer's Allowance, but still not be working enough hours to support their household.

"I wish they could do more so that people could go back, because I would love to go back to work, even part-time, I would love to go back to something, because I feel like there is not a lot for the carers and sitting in the house 24/7, I'm only 55 and I feel like that's the end of my life really."

Female, 55+, Caring for partner

Another related impact felt by some carers was that their educational aspirations, and possible related long-term earning potential, had been interrupted by the demands of caring. One participant had been pursuing a PhD and had hoped to find a career in the same field, but when his caring responsibilities became too much, he had to withdraw. Another carer stated that she would have liked to go to college to gain the skills and qualifications to start working in the childcare sector. However, although she had been considering this for some time, she now felt that she had no energy for it due to the volume of care work required within her own household. As well as the immediate consequences of this educational disruption, carers' longer-term earning potential and ability to pursue their ideal career were also affected.

A third impact of caring on finances related to the extra costs carers experienced as result of their caring responsibilities. For example, one participant who cared for a friend who lived several miles away reported difficulty paying for petrol to get there, petrol for drives/outings with her friend and for the additional costs associated with an outing (such as coffees or ice-creams). Carers also mentioned taxis to hospital appointments. In one case, a participant's husband had been taken by ambulance to hospital in the evening, and when he was kept in overnight, she did not have £20 to pay for a taxi home – so she had to walk two hours in the middle of the night to get back. In these cases, being a carer had resulted in direct costs which participants struggled to meet.

Views on how Carer's Allowance Supplement is paid

CAS is paid every six months in lump sum payments – the December 2019 payment (the most recent one at the time of fieldwork) was £226.20. The dominant perspective among carers was that this twice-yearly payment schedule was better than any alternatives. Carers gave the following reasons for this preference:

• Lump sum payments allowed them to spend on bigger expenses – either bigger treats (such as a trip away) or more expensive necessities (such as larger, quarterly bills). Carers who were struggling financially found it difficult to find a large sum of money, as they had limited savings or disposable income. It was therefore perceived as very helpful that the Supplement came in a lump sum, and carers felt that they subsequently had more to show for it.
• They felt that they would not notice the money to the same extent if it was split up and paid with their regular Carer's Allowance money throughout the year as it would be spent on day-to-day household needs and they would not benefit from it in the way described above. They thought it would also get mixed up with other sources of income (wages, partner's wages, other benefits etc.) and not spent on something specific.
• The lump sum gave carers something to look forward to – they could plan how to spend it and anticipate its arrival.

A more exceptional view was held by those carers who would have preferred to receive the payment split up and paid with Carer's Allowance. The carers who held this opinion tended to have spent the payment on on-going household expenses rather than bigger items, treats or activities. They felt that more regular payments would make it easier for them manage their daily needs and pay for regular expenses. One carer mentioned that she had worked for a long time before becoming a full-time carer, and had always organised her money monthly as that was how she was paid.

A third group of carers had no preference for how the payment was scheduled.

How carers used Carer's Allowance Supplement

Carers were grateful for the Supplement and had used the money in a range of ways. At the time of fieldwork, the most recent payment of CAS would have been paid during winter 2019. Carers were asked how they had spent this last payment. They reported spending on Christmas, spending on general household needs and bills, spending on home improvements or spending on a trip away or other 'treats'. Participants did not report saving the payment.

As the Scottish Government intended, carers did not seem to think the payment should be spent in any particular way – they felt it was their decision.

There was no clear pattern between those in different financial groups (described at the beginning of this chapter) and the way they spent the money – some of those who were struggling the most financially spent it on treats, some of those who were most financially comfortable spent it on bills, and vice versa.

Spending on Christmas

One group had spent their supplement on Christmas expenses. Participants commented that December is a long and often expensive month and the payment helped them cope with the costs of the festive season. For example, one participant had spent their supplement on presents for grandparents, and on Christmas dinner. Another had spent the payment on VIP concert tickets to a band her daughter (the person she cared for) loved. A third had spent the payment on toys for her children, including a tablet and a Lego set. One participant had given a large portion of the Supplement directly to her son in his Christmas card, for him to spend however he liked.

Financially, this group would generally have been able to pay for some type of celebration even without the Supplement. However, they would have had less money to spend on food or presents, and Christmas might have been more financially stressful.

"I wouldn't have been able to do as much [without CAS], like I wouldn't have bought the extra things I wanted to buy [my son] – he would have just gone without it. In terms of the dinner, I would have still bought something, but it would either be the same thing or similar but not so much of it, or maybe from a different shop – because everything has different prices. So, it definitely helped."

Female, 18-34, Caring for child under 18

Others indicated that, without the payment, they would not have been able to spend on Christmas in the way they would like, or be able to pay for what they saw as a 'normal' Christmas.

"We spent it on Christmas presents for the grandkids because we were panicking, we didn't have enough to get them anything. The kids were saying 'don't worry about it, they won't know'. But we would know. But then when that came in […] we were able to go and get them a wee thing which made a difference to us. I know it sounds silly, but just even to get them a wee thing from us made a difference."

Female, 55+, Caring for partner

Spending on general household expenses

Another group had spent the most recent payment on general bills and household expenses. In some cases it had been absorbed into their normal budget, and in other cases, carers remembered spending it on particular bills or expenses.

For example, some carers in this group had spent the payment on groceries. One carer said that she had spent most of the payment on a big supermarket shop to fill up the freezer and left the rest of the money in her bank account to help when the next set of direct debits were due in January. Another carer was especially glad to have the Supplement to help with their food expenses – which were particularly high both because they lived very rurally and because they had to buy gluten-free items.

Other carers in this group used the payment on bills. Some carers worried about the cold season and how they would afford to keep their home warm enough. One carer who had spent the payment in this way was particularly worried about paying for heating, because the person they cared for was on dialysis and needed to be kept warm for medical reasons. Their family could only afford to keep one room as consistently warm as he required, which meant that he was generally confined to this one room, and the rest of the house was not as well-heated. Receiving the Supplement in winter was therefore particularly appreciated as it alleviated some of this worry.

"Grateful for having it [the Supplement], because at that point of time we don't really know what the winter is going to bring to us or what the weather is going to be like. […] Mainly heating, yes, it's our main thing [worry]."

Female, 35-54, Caring for adult sons

In some cases, carers would have struggled to pay for these essentials without the payment, or would have had to go into debt or go to a food bank. It is important to note, however, that not everyone who said the money had been absorbed into their normal budget would otherwise have worried about paying for necessities. In some cases, the money just went into their bank account and was spent, along with the rest of their money, on the things they needed or wanted – it was not the case that they would have had difficulties paying for these things without the Supplement.

Spending on trips away, treats, or other enjoyable activities

A third group spent the money on trips away, treats or other enjoyable activities. These were generally things that they would not have been able to do without the Supplement.

For example, one carer had spent the payment on a few nights away in Edinburgh for her and her family. They visited the Christmas markets, which her daughter enjoyed, and were able to have a genuine break from the stresses of normal life. Without the payment, they might still have been able to go, but would have had a shorter stay or would not have been able to bring her daughter's grandmother along – which would have meant less of a break for the carer and her husband.

"Well, we probably wouldn't have been able to go, or we might have gone but we might just have gone for the day or one night and maybe just gone on our own, but because we had enough to pay for two rooms for two nights, we did that. […] Well, it just meant we could have a longer lie one morning, or my mother-in-law could take our daughter down for breakfast and then we can come down and catch up with her. Or we might have had time for a coffee or for me to pop into a couple of shops while [my mother-in-law] looked after her."

Female, 35-54, Caring for daughter

A different carer had spent some of the money on going to the hairdressers which was something she very rarely did (partly because of the need to find someone to look after her husband while she was out). However, her husband had suggested she did that with the Supplement, saying "you go and treat yourself", and she had arranged for her sister to look after the family while she was out. Another carer had used part of it to take her son and grandson to an autism-friendly cinema showing.

In another case, a carer had spent the money on her child's trip to play wheelchair curling. They stayed in a hotel, and the CAS payment meant that they were able to make it into a family holiday and join in with the social aspects of the trip (such as meals out).

Spending on home improvements

The last group of carers spent the money on home improvements. One carer had spent the money on carpeting for their new home – they had just moved out of a homelessness unit and were happy to be able to spend on their new accommodation. Another carer had used the payment (along with some other money) to redecorate parts of their house – this gave the home an upgrade they had been struggling to find the money for and he said it gave them 'a real boost' as a family.

How previous payments were spent and plans for future payments

When asked how they had spent previous payments, participants tended to report that they had spent it in the same way as the most recent one. This seemed to depend on carers' perception of what they felt the Supplement should be used for. For example, if they had decided that the payment was for treating the person they cared for, they would spend it that way every time, or if they saw it as something to help them pay the bills they would spend it that way every time. To be clear, carers did not think that the government had given any instructions on how it should be used, they felt it was their decision.

"No, everything that we get like that when it comes goes to my daughter, we spend it on her, the stuff that she needs. I don't spend it on myself even though it's my Carer's Allowance, if you know what I mean. […] No, I see it as more for her."

Female, 35-54, Caring for child under 18

Another carer mentioned that she could easily have spent a previous payment on credit card bills which needed paying. Instead, she had put the money in an envelope and used it on activities and enjoyable things, because she felt that the government had introduced the payment to be a bit of money that carers did not have to worry about – she perceived CAS as a payment separate to her other income, intended to give carers "a breath of fresh air".

Carers were also asked about how they planned to spend the next payment. Generally, they either planned to spend it in the same way they had spent previous payments, or they had not yet made any plans. Some spent the payment according to the time of year it arrived and had mentally set aside the summer payment for things like school uniform, holidays, or their TV license (in the same way that they had mentally set aside the winter payment for things like Christmas and heating bills).

For the carers who were interviewed after the COVID-19 lockdown began^[3], their answers about how they would spend the next payment were influenced by that situation. For example, one carer usually used her payment on enjoyable activities, like taking her son out for a meal. She assumed this would no longer be possible due to the lockdown, so instead she planned to let him buy things online. Others were more uncertain about how to spend the payment because of heightened financial insecurity due to the crisis – their decision about how to spend the summer 2020 payment would depend on the extent to which the COVID-19 crisis affected their household income^[4].

The impact of Carer's Allowance Supplement on finances

CAS impacted different groups of carers in different ways.

Overall, the payment seemed to mean the most, and made the biggest difference, to those who were struggling the most financially. For those in this group who had used it on bills and general expenses, they were able to identify clear impacts, and in some cases the payment had stopped participants from having to go to a foodbank or get into debt.

"Well, I would have been at foodbanks, either that or I wouldn't have paid a bill in December and left it 'til January then I would have struggled a bit in January, because it would have been double bills in January then coming out, so I would have been at foodbanks either December or January."

Female, 55+, Caring for partner

For others who were struggling financially, the payment allowed them to spend on less 'essential', more enjoyable things that would have been financially impossible without the Supplement. This group found it very difficult to find larger sums of money – they had little income, and their income covered their outgoings just barely, if at all. They therefore felt unable to save and would have found it very difficult to find £226 at one time without borrowing money. The payment therefore allowed them to spend on more expensive, but often much-needed, enjoyable experiences like trips away. They reported feeling relief at being able to take a break from the stresses of their normal life and going away as a family helped bring them together.

In summary, whether they spent the payment on necessities like food, or on treats like a weekend away, the carers in this group benefitted from the payment the most and felt the biggest impact as a result of the payment.

Those who were not struggling financially to any great degree also felt the benefit of the payment when they had spent it on a trip or other enjoyable activities. They might not have been particularly worried about money, but they still felt it made a difference and were grateful for its impact because they had deliberately set it aside to spend on their family's enjoyment.

Where CAS seemed to have the least financial impact was when it was absorbed into the general budget of households who generally had enough money anyway. In these cases, carers were grateful to have the payment but were unable to name any real financial impacts. When asked what they would have done without the payment, they reported that they would have had no problem still paying for the things they needed and wanted.

Participants of every income group appreciated the payment as "a wee boost" and for some carers the Supplement had made a real difference to their lives – it had allowed them to spend on things that were important to them that they otherwise would not have been able to afford. However, even among those struggling financially, carers had not typically noticed a more general, day-to-day difference in their finances as a result of the Supplement. Carers gave various reasons for this, including:

• They were only aware of benefitting from CAS in the two months a year that it arrives – they did not feel that it changed their financial situation the rest of the year
• They used the payment on a treat, so it did not affect their day-to-day budgeting for more usual expenses
• Although they appreciated the payment, they had noticed other costs going up (such as living expenses and council tax) so there was a feeling that they were still "chasing their tail" financially
• They do not worry about money anyway, so it had not had an impact on their perceptions of household budgets.

When participants were asked whether they rely upon CAS, responses were mixed. Among carers who said they did not rely on it, one reason was that they viewed the payment as a bonus rather than relying it as part of their normal income. Specific references were made to welfare cuts, with some carers feeling that CAS was a bonus that could be stopped at any time.

"It just gets swallowed up, so [my household] doesn't rely on it, because it's quite new and I'm sure the government could quite easily just take it away as soon as they give you it. I don't know how long, if they're talking about indefinitely for this, I really don't know, but definitely you can't rely on it, no."

Female, 35-54, Caring for child under 18

On the other hand, there were those who did report relying on CAS. These tended to be among the carers who were struggling the most financially. They described the payment as a "Godsend" and a "lifesaver" which went a little way to alleviating their near-constant money worries.