The Universal Credit, Housing Benefit and State Pension Credit (Carer’s Allowance Reassessment Capital Disregard) (Amendment) Regulations 2026
These Regulations modify several pieces of secondary legislation to ensure that lump sum payments made by the Secretary of State following a recalculation of Carer's Allowance are excluded from capital assessments.
The rules apply to individuals receiving State Pension Credit, Housing Benefit, or Universal Credit who receive such payments as a result of the Independent Review of Carer's Allowance Overpayments.
By directing that these sums be disregarded as capital, the instrument prevents these specific payments from affecting a claimant’s eligibility for or the amount of their means-tested benefits.
Arguments For
The explanatory note states that these amendments ensure that recipients of lump sum payments resulting from the Carer's Allowance recalculation exercise are not penalized by a reduction in their means-tested benefits.
The document notes that the Secretary of State consulted with representative organizations and obtained agreement from the Social Security Advisory Committee that the proposals did not require formal referral.
The legislation attributes the necessity of these payments to the findings of the Independent Review of Carer's Allowance Overpayments dated 21st July 2025.
Arguments Against
Legal scholars may note that the document does not specify the duration of the capital disregard, potentially creating ambiguity regarding whether these payments are disregarded indefinitely or only for a specific period.
Statutory analysts might point out that the legislation relies on a specific external report (the Independent Review) to define the scope of the disregard, which may complicate eligibility assessments if the recalculation reasons are not clearly documented for every claimant.
Administrative bodies may face implementation challenges in distinguishing these specific lump sum payments from other forms of backdated benefits or capital assets during means-testing.
- -(1) These Regulations may be cited as the Universal Credit, Housing Benefit and State Pension Credit (Carer's Allowance Reassessment Capital Disregard) (Amendment) Regulations 2026.
- (2) These Regulations come into force on 16th July 2026.
- (3) These Regulations extend to England and Wales and Scotland.
This section establishes the official name of the regulations and sets the date they take legal effect as 16th July 2026.
It also defines the geographical jurisdiction of the instrument, applying the rules to England, Wales, and Scotland.
- After paragraph 20AA of Schedule 5 to the State Pension Credit Regulations 2002 (income from capital), insert-
- ' 20AB. A payment to the person made by the Secretary of State as a result of a recalculation of carer's allowance, carried out in consequence of the report of the Independent Review of Carer's Allowance Overpayments dated 21st July 2025.'.
This section amends the State Pension Credit Regulations 2002 by adding a new category of capital that officials must ignore when calculating a claimant's resources.
It specifically applies to payments issued by the Secretary of State following the 2025 Independent Review of Carer's Allowance Overpayments.
- After paragraph 9A of Schedule 6 to the Housing Benefit Regulations 2006 (capital to be disregarded), insert-
- ' 9AA. A payment to the person made by the Secretary of State as a result of a recalculation of carer's allowance, carried out in consequence of the report of the Independent Review of Carer's Allowance Overpayments dated 21st July 2025.'.
This provision updates the Housing Benefit Regulations 2006 to include the specified Carer's Allowance recalculation payments in the list of disregarded capital.
This ensures that such lump sums do not reduce the amount of Housing Benefit a person is entitled to receive.
- After paragraph 22(1B) of Schedule 6 to the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (capital to be disregarded), insert-
'(1C) A payment to the person made by the Secretary of State as a result of a recalculation of carer's allowance, carried out in consequence of the report of the Independent Review of Carer's Allowance Overpayments dated 21st July 2025.'.
This section extends the capital disregard to individuals who have reached the qualifying age for State Pension Credit and are claiming Housing Benefit.
It prevents recalculation payments related to the 2025 review from being counted as assets for this specific demographic.
- After paragraph 18ZA of Schedule 10 to the Universal Credit Regulations 2013 (capital to be disregarded), insert-
- ' 18ZB. A payment to the person made by the Secretary of State as a result of a recalculation of carer's allowance, carried out in consequence of the report of the Independent Review of Carer's Allowance Overpayments dated 21st July 2025.'.
This section amends the Universal Credit Regulations 2013 to ensure that the designated Carer's Allowance recalculation payments are ignored during the Universal Credit means-test.
It applies to any claimant receiving a lump sum resulting from the Independent Review's findings.
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