10 Aug 2016
Author: Stephen Breen
At some point during your lifetime, you may need to find a carer – either to help you manage in your home, or for an elderly relative. Having a carer help in the home is far cheaper than residential care which can cost as much as £36,556. Of course, many people choose to go through an agency, rather than hire direct. This can save on administration but will cost substantially more.
The cost of care
The minimum amount you can pay a carer aged 25 or older is £7.20 an hour. For 21 to 24 year olds, this is reduced to £6.70. The minimum hourly rate for 18 to 20 year olds is £5.30. These figures are based on the National Minimum Wage, and the rates have been effective since April 2016.
Finding a carer
You can advertise for a carer in local newspapers, magazines and in shops that offer advertising space. Simpleneeds.co.uk and pacarers.com are also good websites, both offering free advertisements. Family members, friends and your Local council may also be able to provide recommendations.
Home care agencies will be able to provide a carer for you, and take care of all the background checks and administration. However, the cost will be far higher, and you may find you are not always sent the same carer. You also won’t be able to choose your carer based on their personality and individual qualities – you’ll just get the carer that the agency selects for you. You can find a care agency on the UK Homecare Association website. The Care Quality Commission inspects and monitors care providers – you can view the outcome of any inspection for your chosen agency on their website.
If you decide to employ a carer direct, you need to check their passport, and visa if relevant, to ensure they are eligible to work in the UK. Make sure that the carer gives you original documents in person and stays with you while you check that they are valid. Make sure the details, such as the name and date of birth, are consistent – and the photos are of the applicant. By law, you need to make a note of the date that you checked the documents. If you hire an illegal worker and you are aware that they are illegal – or should have been aware – you can be jailed for up to five years and receive an unlimited fine.
You should also require that the carer has Disclosure and Barring Service (DBS) clearance which is a check on their criminal record, and you should ask to see the original of this document. Make sure that it is in date.
Paying your carer
If you will be paying your carer more than £112 a week, you need to register with HMRC as an employer. Go to gov.uk/register-employer to find out more. As noted above, you will need to pay at least the National Minimum Wage per hour.
For carers earning more than £112 a week, you will need to deduct the correct amount of tax and national insurance from their wage. HMRC will notify you of the correct tax code to use – you can then use the simple calculator at Listentothetaxman.com to work out how much to deduct. The deductions are sent every one or three months to HMRC who will tell you exactly what is due and when.
If your carer is paid £156.01 a week or more, you will be liable for employer’s NICs. However, you can claim up to £3,000 a year off your NICs bill, thanks to the employment allowance.
You will need payroll software to sort out all your payroll administration. There are a number of free packages available – find out more here.
You can, if you wish, use a Payroll agency to do this work for you, for a small fee each month or year. They will also prepare a payslip for your carer. Charges can vary but as an example, PAYE for Nannies charges £138 a year for monthly pay or £234 a year for weekly pay.
If your carer earns more than £10,000 a year (£192 a week+) from you, you will also need to set up and automatically enrol them in a pension scheme. You will need to deduct contributions from your carer’s earnings and pay these into the scheme, together with your own contribution which is on top of what they earn. The minimum amount you can currently pay in is 1% of their total earnings. This may increase in 2018 to 2% and in 2019 to 3%, subject to Parliamentary approval.
You need to provide your carer with a written statement of the terms of their employment within two months of them starting work for you. The minimum information to include in this statement is:
- Name of employer and employee
- Date employment and continuous employment started
- Job location
- Pay and frequency (e.g. weekly, fortnightly, monthly)
- Working hours
- Holiday entitlement
- Job description / job title
- Details of any collective agreement that directly affect the employee’s conditions of employment
You can find out more on the ACAS website. Note that if your carer is required to work more than 48 hours, they must opt out of working time regulations. You can find out more about working hours here. If your carer is going to live with you while providing care, you should provide a contract of employment that includes the requirement for them to vacate your home, once they leave the job.
If your carer works five days a week, they will be entitled to 28 days paid holiday per year including bank holidays. In other words, they can choose to take 20 paid ordinary days plus 8 paid bank holidays – they don’t get extra days for the bank holidays. They may also be eligible for statutory maternity pay, statutory sick pay and redundancy pay.
As an employer, you must obtain employer’s liability insurance with minimum cover of £5m. If your carer will use your vehicle, car insurance will also be required.
Help towards costs
Your Local Authority may provide assistance with the cost of care, if you are assessed as having care needs. This may be in the way of cash to fund a carer of your choice – known as a direct payment. Around 144,000 people receive direct payments in England, and 65,000 of those use the money to employ a private carer – according to the charity ‘Skills for Care’.
You can, if you wish, rent part of your home to a tenant at a reduced rate, in exchange for care services. However, there is still an employer-employee relationship and all the above considerations apply. You will need to put in place a tenancy agreement and make sure you fully understand the tax implications that the benefit of reduced rent in exchange for services has.
If you are considering employing a carer and would like advice regarding employment terms, rights, obligations and tax, please get in touch with our Employment team for more guidance.