Understanding earnings for Carer Support Payment

Earnings definitions and types

Clients can have earnings from:

• employment
• self-employment
• both employment and self-employment

Definitions of earnings, employment and self-employment 

Example of volunteer

Glenn has applied for Carer Support Payment. He is an adult volunteer for the Army Cadets and provides training at camps that he receives an allowance for.

The client advisor needs to decide whether the allowance is considered to be earnings. The Army Cadets is a volunteer youth organisation that is sponsored by the Ministry of Defence. Glenn does not have a contract with the Ministry of Defence. He does not receive a wage or salary. His allowance is intended to recognise his time and effort and to reimburse travel.

Glenn is considered to be a volunteer and his allowance is not considered to be earnings. They can be disregarded.

Employment training schemes and apprenticeships

Employment training schemes

Employment training schemes are publicly funded or subsidised training programmes designed to support adults into employment. Employment training can include:

• Classroom training
• Workshops on specific skills
• On-the-job training and internships
• Short-term intensive courses
• Long-term retraining

Clients may receive money as part of their employment training scheme. Allowances and reimbursements are not counted as earnings for Carer Support Payment. Wages for work done under a contract of service do count as earnings, therefore the decision maker should check if the client is undertaking employment training whilst also working as an employed earner.  

A client may receive the following payments from these schemes:

If a client reports that they receive money from an employment training scheme, the client advisor should contact the client to:

• confirm what the purpose of the money is for
• confirm whether this is a wage for work done under a contract as an employee
• confirm whether the money is an overlapping benefit if it is a training allowance

Apprenticeships

Apprenticeships combine paid work with formal training towards a recognised qualification. Clients would usually be paid wages from their employer under a contract of service. These wages count as earnings for Carer Support Payment.

Data capture

The data we receive on earnings depends on whether the client is:

Clients may be both employed and self-employed.

If it’s unclear what type of earner someone is, we should consider them to be employed if we have earnings information for them from HMRC and either:

• they have a contract of service with their employer
• they hold an office (including an elected role)

Additional earnings other than wage or salary

Employed earners may also have additional earnings, other than wages or salary, which may include:

Special rules for compensation payments on termination of employment

For Carer Support Payment, ‘compensation’ only covers certain payments made when someone’s job ends. Under the regulations, compensation applies where either:

• the client did not receive a payment in lieu of notice (PILON) they were entitled to
• they only received part of the PILON they were entitled to
• they gave up their right to receive PILON

and their employer pays them some other amount of money that counts as compensation under the rules. This money cannot be considered ‘compensation’ under the rules if it was paid as a bonus, tip, PILON itself, PILOR, holiday pay, retainer, reimbursement for a work-related expense, reinstatement pay, continuation of contract pay, protective award money, redundancy payment or workplace pension refund.

Example of compensation payment

Benito is entitled to £1,200 of PILON. His employer refuses to pay PILON and instead gives him a ‘settlement payment’ of £1,200. This amount is considered to be compensation because:

• he didn’t get the PILON that he was entitled to
• the payment replaces the missing notice pay
• the payment is not one of the other types of additional earnings set out above

If a client receives a compensation payment under these rules, the amount that counts as earnings depends on whether they were in full-time employment or part-time employment.

If the client was in full-time employment

Where the client was in full-time employment:

• if the payment is equal to or more than the maximum weekly amount, only part of the payment will count as earnings
• the amount that counts as earnings is the total compensation minus the deductible remainder.

The deductible remainder is the amount left over after you divide the total compensation by the maximum weekly amount and take away all the full weeks.

The deductible remainder is equal to the difference between:

• the total amount of compensation, and
• the maximum weekly amount multiplied by the number of whole weeks the compensation contains.

This means:

• The whole weeks counts as earnings
• The remainder (the fractional week) is ignored

If the client was in part-time employment

Where the client is in part-time employment the full amount of compensation payment will count as earnings. There is no deductible remainder for part-time workers.

This maximum weekly amount is a statutory limit on a week’s pay used in redundancy pay, basic awards for unfair dismissal, compensation calculations. It is set each year by UK Government in the Employment Rights (Increase of Limits) Order which is published on gov.uk. The maximum weekly amount for 2025/26 is £719. Decision makers should check the new limit if calculating the amount to be counted as earnings and that payment was received from the start of the next tax year.  This is because of uprating.

Example of special rules for compensation payments for a full-time worker

Kwabena worked full-time as a warehouse supervisor. His employer dismissed him without giving him full notice pay he was entitled to. He challenged the dismissal and was later given a compensation payment to cover the notice period he should have received.

Kwabena receives a one-off lump sum of £1,800 after his employment ends. The payment is not PILON itself. Because he was working full-time, only part of this compensation counts as earnings.

1800 / 719 = 2.5 weeks

2 x 719 = £1,438

£1,438 is the part of the compensation amount that counts as earnings.

£1,800 - £1,438 =  £362

£362 is the deductible remainder that is ignored.

Period over which compensation payments are taken into account

The period that compensation payments are taken into account for clients who were working full-time is:

• The number of whole weeks based on dividing the net compensation by the maximum weekly amount (less any fraction of a whole number) or
• The specified period set out in the client’s notice
• Whichever is shorter

For part-time workers, the full amount of compensation payment is counted as earnings. It is treated as paid in the award week in which the client receives it, and it is not allocated over multiple weeks. The deductible remainder rule does not apply to part-time employment.

This would not apply to:

• final wages
• holiday pay
• Payment in lieu of notice (PILON)
• Payment in lieu of remuneration (PILOR)
• Reinstatement pay
• Continuation of contact pay
• Protective award money
• Redundancy pay
• Workplace pension refund

This is because these are direct payments for work rather than paid under employment law following termination of employment.

Continued example of special rules for compensation payments for a full-time worker

Taking Kwabena’s example:

• His notice period was 4 weeks
• The number of weeks based on dividing the net compensation by the maximum weekly amount was 2.5 weeks

We ignore the partial week and spread Kwabena’s compensation payment over 2 weeks as this is shorter than 4 weeks. The counted earnings of £1,438 are spread over 2 award weeks starting from the Sunday of the award week in which the money was received.

£1,438 / 2 = £719

Kwabena earned £719 in the first and second award week from the treat as paid date.

These amounts are more than the earnings limit so Kwabena would not be entitled to Carer Support Payment in these weeks.

Please note the illustrative examples in this guidance have been worked out using the 2025-26 earnings threshold. For a list of current and previous thresholds please see  operational guidance on benefit rates.

Example of special rules for compensation payments for a part-time worker

Ken worked as a part-time delivery driver. His employment suddenly ended and he did not receive the notice pay that he was entitled to. After raising this with his employer, they agreed to pay him £600 as compensation.

As this payment was made because he didn’t get his notice pay and is not PILON or any other type of payment, it is treated as compensation under the Carer Support Payment rules.

Because Ken worked part-time, the full £600 counts as earnings – no deductible remainder applies. The full £600 is counted in the award week in which it was received.

Example of free issue of company shares and share dividends

As set out above, free issue of company shares should be counted as earnings.

Dividend income on shares however can be disregarded as this is investment income, not income from a job. Money received from selling shares can also be disregarded as this is a capital gain, not income from a job.

Niamh works as an administrator for a technology company. As part of an employee reward scheme, her employer gives her 20 company shares for free in recognition of her performance.

Niamh provides evidence to Social Security Scotland in the form of:

• an email from her employer confirming that shares were issued to her for free
• a statement showing the stock market value of the shares on the date that they were issued

On the date that Niamh receives the shares, each share was worth £5. This means that the total value of the free shares is:

20 x £5 = £100.

Because these shares were given for free as a direct result of her employment, the £100 value counts as earnings for Carer Support Payment. This amount is taken into account in the award week in which the shares were issued to her.

Niamh then received dividend income from these shares. Dividend income does not count as earnings for Carer Support Payment and can be disregarded. This is because dividend income does not come from employment, it is investment income.

Six months later, Niamh decides to sell all of her shares. The sale creates a capital gain, not earnings for the purposes of Carer Support Payment. The money Niamh receives from selling her shares is disregarded.

Employer-provided non-cash benefits

Employed clients may receive non-cash perks that have monetary value and are provided by employers. Examples of these benefits include private health insurance, private dental plans or critical illness cover.

Even though these employer-provided benefits are not paid in cash, their monetary value counts as earnings if both:

• they are provided as a direct result of the client’s employment
• if the client opted out of these schemes, their employer would pay them the monetary value as part of their salary.

Payments in kind that cannot be taken as cash

Sometimes clients may be paid in non-cash items instead of wages that cannot be exchanged for cash and where the employer would not otherwise pay the client the monetary value.

This can include free meals, free accommodation or other goods and services that the client cannot convert into money. These payments cannot be treated as earnings because they do not represent cash that could otherwise be paid to the client.

PhD Funding

PhD funding is generally considered to be student support that does not count as earnings unless it includes remuneration for paid work beyond the scope of the PhD project.

Under Schedule 2, paragraph 8 (1), earnings from employment is defined in regulations as remuneration or profit derived from employment. Payments that are solely for study, living costs or research costs do not meet this definition.

A client studying for their PhD or Doctor of Philosophy could feasibly receive a:

These are all forms of student support and do not count as earnings.

A PhD student may also receive a:

Some fellowships, stipends or studentships can require that the student take up paid teaching work at the university e.g. teaching undergraduates or paid research assistance outside of the scope of the PhD project itself. These paid jobs would be treated as earnings as they are receiving from a job as an employed earner.

If the payments only support the student while they do their PhD and any teaching or research assistance is voluntary, then the money is considered to be student support and does not count as earnings. 

If the client advisor is not sure, they should contact the client to confirm if either:

• the payments include paid teaching or research work, or other form of paid work beyond the scope of their PhD project
• the payments are purely to support them with their living and research costs where teaching or research work is voluntary

If any part of funding requires paid duties, the client advisor should request evidence of their rate of pay.

The client advisor should also request supporting information on the terms of their funding arrangement.

How do we find out about additional earnings?

Clients are asked on application if they receive any additional earnings other than normal wages or salary. They also have a duty to report a change in the circumstances including if they receive additional earnings. Operational guidance should be followed for resolving an ‘Additional Earnings’ discrepancy in SPM. 

For more details on payments that are considered earnings for Carer Support Payment see Carer Support Payment Regulations, Schedule 2, Paragraph 8(1)

Company Directors 

A company director is a director of a limited company. A limited company is a separate legal entity which employs directors, therefore profits belong to the company, not the directors. Company directors are therefore considered employed earners, not self-employed earners.

Any payments a company director receives under the company’s Articles of Association should be treated as earnings. If the director has a contract of employment as an employee of the company, their salary should also be treated as earnings.

Clients will be asked on application if they are a company director. If they indicate they are a company director, they should be treated as an employed earner with a salary.

Clients who are both employed and self-employed

Where someone has earnings as both an employed earner and a self-employed earner, earnings from each employment should be calculated separately. These figures are then added together to get a total net weekly earnings figure.

Example of a client who is employed and self-employed 

Hassan is a personal trainer. Hassan works one day per week as an employee in a local authority leisure centre, and receives a regular salary of £80 per week.

Hassan also has a business providing private personal training services outside of their employment with the leisure centre. This is classed as self-employment.

Hassan receives on average £50 per week from the personal training business. Hassan has no deductions or disregards that can be made from either their employment or self-employment, meaning that Hassan’s net weekly earnings are £80 + £50 = £130. This is below the earnings threshold, meaning Hassan is entitled to Carer Support Payment.

Please note the illustrative examples in this guidance have been worked out using the 2025-26 earnings threshold. For a list of current and previous thresholds please see operational guidance on payment amounts.

When earnings are treated as paid

Earnings are treated as paid on the first day of the award week in which the client receives the money.

This means that even if a client is due a payment for a certain period, we do not count it as earnings until it is actually received. The intention of this policy is to ensure that support is awarded based on the earnings that the client actually has.

Carer Support Payment Regulations, Schedule 2, Paragraph 6.

Example of treat as paid 

Iffat is paid her normal wage on Friday 31^st October. This is treated as paid for the purposes of Carer Support Payment on Sunday 26^th October as this is the first day of the award week that she received the money.

Period that earnings are taken into account

If a client receives payments that are both:

• from the same source
• payable in respect of a period e.g. wages or salary, sick pay, maternity or paternity leave pay, adoption pay, neonatal care pay

the amount of payment is taken into account from the treat as paid date up to the last day of the award week before the client gets their next payment of the same kind.

If a client is employed and receives a monthly salary, that money is:

• treated as paid from the first day of the award week that the client receives the payment
• divided into a weekly amount
• attributed to the number of weeks from the treat as paid date up to the last day of the award week before they are paid again.

Treating multiple earnings paid in the same award week

If a client receives more than one payment of their wage or salary from the same employer in the same award week, only one of those payments should be counted when assessing earnings in that award week.

We should only count the payment that the client actually received first. Any other payments of the same kind from the same source in that week should be disregarded in the system. This ensures the second payment is not counted as earnings. This can be done by following operational guidance on deductions for Deduction Type – Disregarded Earnings.  

Carer Support Payment Regulations, Schedule 2, paragraph 7(2)

This rule protects carers from being unfairly affected by payroll timing issues – like getting paid twice in one week due a delay in a previous payment or an early payment made on their next wage or salary. It ensures that carers aren’t disadvantaged because of how or when their employer processes their pay.

Example of multiple earnings paid in the same award week

Elena is already getting Carer Support Payment. She works part-time in a café and is paid £190 a week after deductions. Normally she gets one wage payment every Friday. One week, due a payroll delay, her employer pays her wages twice in the same week – covering both the current week and the previous week. She receives a total of £380 that week.

Both payments fall in the same award week and were both wage payments from the same employer. Only the first payment that Elena received that week should be counted. The second payment can be ignored. Elena can continue to receive Carer Support Payment without any stop in her entitlement as she continues to meet the eligibility criteria.

Clients with new jobs, businesses or cash in hand jobs – ‘notional earnings’

In rare cases, some clients may have started receiving money for work but we cannot verify the payments received e.g. cash in hand jobs.

In these cases, there would unlikely be HMRC data or evidence from bank statements or payslips to verify earnings.

Decision makers should instead calculate a ‘notional earnings’ figure. This is a reasonable estimate of earnings taking into account:

• what hours the client tells us they have worked if employed
• online searches for estimated costs of comparable work, items or services in the client’s area
• volume of trading the client tells us they have had if they are self-employed
• realistic volume of trading for a reasonable individual in the client’s circumstances
• how much they charge for their goods or services if they are self-employed
• how much revenue they have generated so far if they are self-employed
• how much the client estimates they have paid for in work-related or business-related expenses
• estimates of reasonable work-related or business-related expenses
• estimates of appropriate deductions for income tax
• estimates of appropriate deductions for National Insurance contributions
• estimates of appropriate deductions for occupational and/or private pension contributions
• deductions for what the client tells us they have spent on childcare or care for a disabled person because of their work

The decision maker should also contact the client to discuss and request any evidence they may have available to help estimate notional earnings. This could include:

• an employment contract setting out how the client would be paid
• an employment contract setting out occupational pension contributions
• any evidence of relevant deductions e.g. private pension statement or statements for childcare or replacement care for the cared for person

For more details see Carer Support Payment Regulations, Schedule 2, paragraph 3

Forward allocation

Earnings in one week affect entitlement to Carer Support Payment in the following week. It does not matter whether or not the client is still employed or self-employed in that week.

Forward allocation for employed earners [H3]

When we calculate eligibility for a given award week, we apply two tests for all clients with earnings. We check if both of the following are under the earnings limit:

• Average earnings in the previous weeks depending on the averaging period set  
• Actual weekly earnings in the previous award week

The intention of this approach- – where both actual and average earnings can be looked at to determine eligibility – is to provide more stable support for carers in paid work whose earnings vary.

Where averaging applies, the averaging period can be changed manually following guidance in Calculate average earnings for Carer Support Payment | Social Security Scotland. 

Please note, in the following examples, the 2025/26 earnings threshold has been used for the purposes of the example. For current and previous earnings thresholds please see Disability, winter heating and carers benefit payment amounts | Social Security Scotland

Example of employed earner with no backdating 

Seona applies for Carer Support Payment on 22 July 2025 and works part-time in a supermarket. Seona has fluctuating earnings. A client advisor decides that the most appropriate averaging period for her earnings is 13 weeks and sets this manually. The start of the award week for her application is Sunday 20 July 2025. To calculate whether Seona is eligible from this date, we check whether either of the following are under the limit:

• Actual earnings received in the award week between Sunday 13 July to Saturday 19 July.
• Average earnings in the previous 13 weeks up to Saturday 19 July.