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Disregarded earnings
Disregards are amounts that should not be included in the earnings calculation for the purposes of Carer Support Payment.
A full list of disregarded earnings is set out further below.
Under the regulations, a payment may be disregarded if either:
- it is explicitly set out as a sum to be disregarded under Schedule 2, paragraph 14
- it does not come within the definition of earnings for either employed clients or self-employed clients
|
Term |
Definition |
Regulation |
|
Earnings from employment |
‘remuneration or profit derived from employment’ or any income you receive because of your job |
Schedule 2, paragraph 8 (1) |
|
Earnings from self-employment |
Profit made from a business after expenses are taken off and includes certain government allowances too help run or grow a business. |
Schedule 2, paragraph 11 |
|
Employed earner |
A person:
who gets paid for their work and is subject to income tax.
|
Schedule 2, paragraph 1 |
|
Self-employed earner |
A person who:
|
Schedule 2, paragraph 1 |
If a client’s gross earnings are over the limit, they should always be contacted to check whether they have any deductions and disregards following operational guidance.
Disregarded earnings – for employed and self-employed earners
The following types of payments or income are disregarded in calculating a client’s earnings for Carer Support Payment, whether they are employed or self-employed:
- Pension income including from either a workplace or private pension
- Pensions paid due to another person’s employment (e.g., widow receiving husband’s pension)
- Income tax refunds
- Other benefit income
- Redundancy payments including statutory redundancy
- Overpayments of wages or salary
- Advances of salary
- Loans from an employer
- Earnings received from ended employment if the client ended employment before their entitlement start date
- Informal payments from someone living with the client for shared living expenses
- Any allowances or fees received for fostering a child
- Direct payments for caring for someone - when made by a local authority, NHS commissioning board, clinical commissioning group or voluntary organisation for someone who is not normally a member of the client’s household but is temporarily in their care
- Earnings payable abroad which can’t be brought into the UK
- Charges for converting earnings paid in a foreign currency
- Debenture interest or repayment of a debenture loan - Debenture interest may be paid to Directors who have loaned capital to a company. They are paid a fixed rate of interest regardless of whether the company makes a profit or not. If the loan is repaid, the amount repaid should also be disregarded
- Share dividends
- Payments in kind (e.g., free accommodation, lunch vouchers, childcare vouchers)
- Training allowances
- If a client receives a bonus or one-off payment and is a member of the coastguard, a fire-fighter, lifeboat crew, a member of the territorial army or reserve forces, any ‘bounty payments’ received as an incentive for completing prescribed training. If this bounty is paid once a year, this is disregarded as earnings. If it is paid more often and once a year e.g. quarterly, it should be treated as earnings.
- Compensation for loss of earnings due to an accident
- Payment for jury service
- Capital receipts such as loans, injections of capital, grants from the Prince’s Trust
- Proceeds from the sale of business assets, unless that asset was part of the stock in trade of the business.
Disregarded earnings from renting rooms in the client’s home
If rent received is less than £20 a week, all of this should be disregarded. If rent is £20 or more, only the first £20 should be disregarded. This applies when all of the following are true:
- the person getting the rent lives in the same home
- the other person living there is paying them under a contract
- payments are for living in the property
This includes where the person paying rent is a family member of the lodger e.g. a parent paying rent for their child who lives in the house.
Disregarded earnings from board and lodging
If someone provides board and lodging, this means providing a room to live in and meals as part of the arrangement.
If payments received in a week are £20 or less, all of this should be disregarded. If payments are £20 or more, the first £20 and half of the remaining payment should be disregarded.
For more details see Carer Support Payment Regulations, Schedule 2, Paragraph 14
Example of disregarded earnings from board and lodging
Grace lives in her own home. She rents out a spare room to a student, Sunita. As part of the arrangement, Grace provides breakfast. This counts as board and lodging.
Sunita pays Grace £300 a week for the room and meals.
Because Grace is providing board and lodging in her own home, only some of this money received from Sunita should be counted as earnings for Carer Support Payment.
Because the first £20 of the weekly payment is disregarded, this means:
£300 – £20 = £280 is remaining
Half of this payment should also be disregarded:
£280 / 2 = £140
£300 – (£20 + £140) = £140
£140 should be counted in weekly payments received from Sunita.
Pension income
Pension income means money received from a pension that a client usually receives when they have retired. This is distinct from contributions into a pension scheme that can be deducted from earnings.
Overpayment of wages and salary
An overpayment of wages is where the client has received money that they were not entitled to from their employer due to a mistake. Where the client has been overpaid wages or salary in error and is required to repay this money to their employer, any overpaid amount due to be repaid can be disregarded in the award week in which it is received.
This is because the overpayment is not considered ‘earnings’ as defined under CSP regulations i.e. it is not ‘remuneration or profit derived from employment’ (CSP Regs, Schedule 2, para 8) as it is not paid in respect of duties performed for employment.
If a client tells us that they have received an overpayment of wages, supporting information should be requested to evidence the below. The client advisor must be reasonably satisfied of:
- the amount of overpayment compared to their normal wages
- when the overpayment was received
This can be from:
- a written letter or email from the client’s employer showing the amount of overpayment made, how and when this overpayment will be recovered
- payslip(s) showing later deductions that may be labelled as ‘overpayment recovery,’ ‘wage correction’ or ‘salary overpaid’
Example of overpayment of wages
Lauren normally gets £180 a week from her work. Her employer accidentally pays her twice in one week, meaning she receives £360. This is over the earnings limit.
Lauren is contacted by Social Security Scotland to ask if she has any deductions or disregards to bring her net earnings below the limit.
Lauren tells us that she received an overpayment of her wages by mistake and provides an email from her employer about the overpayment and that it will be recovered from her future wages.
The client advisor is confident that £180 was received by mistake and disregards the £180 by adding it as a Deductions Evidence for that award week.
Lauren later provided another payslip showing that she is paying back the overpayment as it is being deducted from her wages. This evidence was not required to have disregarded amounts for overpayments as Lauren already provided an email from her employer proving the amounts were mistakenly given and would be repaid. The deductions made from her salary to recover the overpayment should not also be added as a deduction. This avoids double counting the disregard.
Advances of salary
These amounts relate to salary or wages that the employee would normally earn in the course of their employment. These are early payments of future earnings, not extra money on top of what they would normally earn – they are just received earlier than usual.
These amounts can also be disregarded in the award week that they are received because they are explicitly set out as a disregard under CSP regulations (CSP Regs, Schedule 2, para 14(j)).
If the client tells us that they have received an advance on their salary, supporting information should be requested to evidence the below. The client advisor must be reasonably satisfied of:
- the amount of advance received compared to normal salary
- when the advance was received
This can be from:
- a written letter or email from the client’s employer showing the amount of advance to be made, the amount of the client’s normal salary, how and when the advance amounts will be recovered.
- payslip(s) showing advance payment separately labelled e.g. as ‘advance,’ ‘salary advance,’ ‘wage advance.’
Disregard the full amount of salary advance in the award week it is received following operational guidance.
The normal salary the client later receives should be counted as earnings.
Where the client provides a payslip(s) showing deductions from their gross wages to repay an advance of salary, these amounts should not also be added as a deduction. This avoids double counting the disregard.
Example of advance of salary
Sam normally earns £700 a month, at the end of each month. In August 2025, his employer agrees to pay him a £250 advance on his normal salary. Sam receives the £250 advance on 11 August 2025. At the end of August, Sam receives £450. This is his normal salary minus the advance received earlier in the month.
Sam provides an email from his employer setting out the amount of advance he would be paid and when this would be deducted from his normal earnings.
The client advisor disregards the full amount of advance.. His remaining salary is counted as earnings.
Loans from an employer
These amounts are money lent to the client by their employer. They are not linked to their salary. It is a debt owed by the employee, usually repaid separately from their normal pay. These often have repayment terms or interest and repayment is often made according to a loan agreement not necessarily deducted from salary.
These amounts can also be disregarded in the award week that they are received because they are explicitly set out as a disregard under CSP regulations (CSP Regs, Schedule 2, para 14(j)). This is because the client will be required to return this money to the employer.
If the client tells us that they have received a loan from their employer, supporting information should be requested to evidence the below. The client advisor must be reasonably satisfied of:
- the amount of loan received compared to normal salary
- when the loan was received
- when they will replay their employer back for these amounts
This can be from:
- a written letter or email from the client’s employer showing the amount of loan, when the loan will or has been paid, that it is a loan separate from normal salary and what the repayment terms are
- payslip(s) showing loan payment separately labelled e.g. as ‘loan’ or ‘staff loan.’
Following operational guidance the full amount of the loan should be disregarded in the award week(s) it was received.
The client’s normal wages should be counted as earnings.
Where the client provides a payslip(s) showing deductions from their gross wages to repay a loan, these amounts should not also be added as a deduction. This avoids double counting the disregard.
Example of loan from an employer
Anwar normally gets £600 a month from his work. His employer agrees to provide a loan of £500 to him that he can repay from monthly deductions from his salary of £100 a month.
Anwar provides a letter from his employer setting out:
- the amount of the loan
- when the loan was paid
- how much Anwar will pay back
- when Anwar will repay the loan from deductions from his salary.
The client advisor disregards the full amount of the £500 loan from the award week it was received by adding it as a Deductions Evidence (Disregarded Earnings). The remaining amounts of salary that Anwar receives are treated as earnings.
Supporting information on disregarded earnings
When supporting information is received, the decision maker should be reasonably satisfied that it is more likely than not (on the balance of probabilities) that the client received disregarded earnings.