Project the Carer's Allowance earnings limit as 16 hours at the national living wage

changelog.d/ca-earnings-limit-nlw-projection.fixed.md

@@ -0,0 +1 @@
+Project the Carer's Allowance earnings limit after its last legislated amount as 16 hours at the national living wage, rounded up to the next pound, as the Government sets it from April 2025, instead of holding £204 in every later year.

policyengine_uk/parameters/gov/dwp/carers_allowance/create_earnings_limit_projection.py

@@ -0,0 +1,65 @@
+"""Project the Carer's Allowance earnings limit from the national living wage.
+
+Regulation 8(1) of the Social Security (Invalid Care Allowance) Regulations
+1976 states the limit as a fixed sum, which each year's up-rating regulations
+replace. From April 2025 the Government sets it at 16 times the hourly
+national living wage, rounded up to the nearest pound, "from April 2025 and in
+future years" (Explanatory Memorandum to SI 2025/352, paragraph 5.6): £196
+from 16 x £12.21 = £195.36, and £204 from 16 x £12.71 = £203.36 (SI 2026/218).
+Keep the legislated amounts and derive only later years, from the national
+living wage in force on 30 April, as the April up-rating sets the limit.
+
+Each projected year is the rule alone. A reform that lowers the national
+living wage or the hours lowers the limit, and one that changes a single year
+changes that year only. While the national living wage stays at or above its
+April 2026 rate and the hours at or above 16, no projected year is below £204.
+
+Run after general uprating and before fiscal-year conversion, on both the
+main tree and its baseline copy, as the Savings Credit threshold projection
+is. Reprocessing a reform then reads its changed national living wage or
+hours. The exceptions edit the processed parameters, so they do not move the
+limit: ``Scenario.apply`` on an already-built simulation, and a reform-dict
+key naming a single day or month.
+"""
+
+import math
+
+from policyengine_core.parameters import ParameterNode
+from policyengine_core.periods import instant
+
+from policyengine_uk.parameters.gov.dwp.pension_credit.savings_credit.create_savings_credit_threshold import (
+    extend_after_last_stated,
+    last_projected_year,
+)
+
+
+def national_living_wage_limit(hours: float, national_living_wage: float) -> float:
+    """``hours`` at the national living wage, rounded up to the next pound.
+
+    Rounding to six places first keeps an exact amount from rounding up when
+    the float product sits just above it: 20 x (1,020 x 0.01) is
+    204.00000000000003, which must give £204, not £205.
+    """
+    return float(math.ceil(round(hours * national_living_wage, 6)))
+
+
+def project_carers_allowance_earnings_limit(
+    parameters: ParameterNode,
+) -> ParameterNode:
+    """Fill the years after the earnings limit's last stated value."""
+    carers_allowance = parameters.gov.dwp.carers_allowance
+    wage = parameters.gov.hmrc.minimum_wage.non_apprentice
+
+    def derive(sample, previous):
+        # The scale orders brackets by age, so its last amount is the adult
+        # rate: the national living wage, as in
+        # esa_exempt_work_higher_earnings_limit.
+        national_living_wage = wage.get_at_instant(instant(sample)).amounts[-1]
+        hours = carers_allowance.earnings_limit_national_living_wage_hours(sample)
+        return national_living_wage_limit(hours, national_living_wage)
+
+    extend_after_last_stated(
+        carers_allowance.earnings_limit, last_projected_year(parameters), derive
+    )
+    carers_allowance.clear_parent_cache()
+    return parameters

policyengine_uk/parameters/gov/dwp/carers_allowance/earnings_limit.yaml

@@ -1,4 +1,10 @@
 description: Weekly earnings above which a person is treated as gainfully employed and so is not entitled to Carer's Allowance. The test uses net earnings in the preceding week.
+# Each value is the amount the up-rating regulations set. From April 2025 the
+# Government sets it at 16 times the hourly national living wage, rounded up
+# to the nearest pound (Explanatory Memorandum to SI 2025/352, paragraph 5.6).
+# Years after the last value here are projected that way, from the national
+# living wage and gov.dwp.carers_allowance.earnings_limit_national_living_wage_hours,
+# by create_earnings_limit_projection.py.
 metadata:
   economy: false
   period: week
@@ -9,6 +15,8 @@ metadata:
       href: https://www.legislation.gov.uk/uksi/1976/409/regulation/8
     - title: Social Security Contributions and Benefits Act 1992 s. 70(1)(b)
       href: https://www.legislation.gov.uk/ukpga/1992/4/section/70
+    - title: Explanatory Memorandum to the Social Security Benefits Up-rating Regulations 2025 (SI 2025/352), paragraphs 5.3 and 5.6
+      href: https://www.legislation.gov.uk/uksi/2025/352/pdfs/uksiem_20250352_en_001.pdf
 values:
   2015-04-06:
     value: 110

policyengine_uk/parameters/gov/dwp/carers_allowance/earnings_limit_national_living_wage_hours.yaml

@@ -0,0 +1,31 @@
+description: >-
+  Hours a week at the national living wage that set the Carer's Allowance
+  earnings limit in the years after its last legislated amount. Regulation 8(1)
+  of the Social Security (Invalid Care Allowance) Regulations 1976 states the
+  limit as a fixed sum, which the annual up-rating regulations replace. From
+  April 2025 the Government sets that sum at 16 times the hourly national living
+  wage, rounded up to the nearest pound, "from April 2025 and in future years"
+  (Explanatory Memorandum to SI 2025/352, paragraph 5.6). The model keeps each
+  legislated amount and projects later years as this many hours at the national
+  living wage in force on 30 April, rounded up to the next pound. A change
+  made by Scenario.apply to an already-built simulation, or by a reform-dict
+  key naming a single day or month, edits the processed parameters and so does
+  not move the limit.
+values:
+  2025-04-07:
+    value: 16
+    reference:
+      - title: Explanatory Memorandum to the Social Security Benefits Up-rating Regulations 2025 (SI 2025/352), paragraphs 5.3 and 5.6
+        href: https://www.legislation.gov.uk/uksi/2025/352/pdfs/uksiem_20250352_en_001.pdf
+metadata:
+  economy: false
+  unit: hour
+  period: week
+  label: Carer's Allowance earnings limit national living wage hours
+  reference:
+    - title: Explanatory Memorandum to the Social Security Benefits Up-rating Regulations 2025 (SI 2025/352), paragraphs 5.3 and 5.6
+      href: https://www.legislation.gov.uk/uksi/2025/352/pdfs/uksiem_20250352_en_001.pdf
+    - title: Explanatory Memorandum to the Social Security Benefits Up-rating Regulations 2026 (SI 2026/218), paragraph 5.3
+      href: https://www.legislation.gov.uk/uksi/2026/218/pdfs/uksiem_20260218_en_001.pdf
+    - title: Autumn Budget 2024 (HM Treasury, 30 October 2024)
+      href: https://www.gov.uk/government/publications/autumn-budget-2024/autumn-budget-2024-html

policyengine_uk/tax_benefit_system.py

@@ -30,6 +30,9 @@
 from policyengine_uk.parameters.gov.dwp.state_pension.triple_lock.create_triple_lock import (
     add_triple_lock,
 )
+from policyengine_uk.parameters.gov.dwp.carers_allowance.create_earnings_limit_projection import (
+    project_carers_allowance_earnings_limit,
+)
 from policyengine_uk.parameters.gov.dwp.housing_benefit.allowances.create_pension_age_allowances import (
     project_pension_age_allowances,
 )
@@ -187,6 +190,9 @@ def process_parameter_tree(
     - Universal Credit standard allowance uprating (UC Act 2025 s. 1)
     - Universal Credit LCWRA element uprating (UC Act 2025 s. 3 freeze)
     - parameter uprating and backdating
+    - projections derived from other parameters after uprating: the
+      Savings Credit threshold, the pension-age Housing Benefit allowances
+      and the Carer's Allowance earnings limit
     - conversion to fiscal year parameters
 
     Returns the tree and each parameter's timeline after projection (for gov
@@ -222,9 +228,11 @@ def process_parameter_tree(
             uprate_parameters(parameters)
     project_savings_credit_threshold(parameters)
     project_pension_age_allowances(parameters)
+    project_carers_allowance_earnings_limit(parameters)
     if annualise:
         project_savings_credit_threshold(parameters.baseline)
         project_pension_age_allowances(parameters.baseline)
+        project_carers_allowance_earnings_limit(parameters.baseline)
     parameters = backdate_parameters(parameters, BACKDATED_FROM)
     # Prior law's projected path for every parameter a reform can change: the
     # gov tree, before annualisation, and the trees outside it (household),

policyengine_uk/tests/policy/baseline/gov/dwp/carers_allowance_earnings_limit_projection.yaml

@@ -0,0 +1,71 @@
+# Carer's Allowance earnings limit after its last legislated amount (£204 a
+# week from 6 April 2026, SI 2026/218). From April 2025 the Government sets
+# the limit at 16 times the hourly national living wage, rounded up to the
+# nearest pound (Explanatory Memorandum to SI 2025/352, paragraph 5.6), and
+# the model projects later years that way. The model's national living wage
+# holds at £12.71 after April 2026, so each later limit is 16 x £12.71 =
+# £203.36, rounded up to £204. Earnings are entered net, as
+# carers_allowance_earnings, so the cases do not depend on tax or NI.
+
+- name: 2027-28, net earnings of exactly £204 a week have not exceeded the limit.
+  period: 2027
+  input:
+    age: 45
+    carers_allowance_earnings: 204 * 52
+    care_hours: 40
+    country: ENGLAND
+  output:
+    is_gainfully_employed_for_carers_allowance: false
+
+- name: 2027-28, net earnings of £205 a week are over the limit.
+  period: 2027
+  input:
+    age: 45
+    carers_allowance_earnings: 205 * 52
+    care_hours: 40
+    country: ENGLAND
+  output:
+    is_gainfully_employed_for_carers_allowance: true
+    carers_allowance: 0
+
+- name: 2028-29, net earnings of exactly £204 a week have not exceeded the limit.
+  period: 2028
+  input:
+    age: 45
+    carers_allowance_earnings: 204 * 52
+    care_hours: 40
+    country: ENGLAND
+  output:
+    is_gainfully_employed_for_carers_allowance: false
+
+- name: 2028-29, net earnings of £205 a week are over the limit.
+  period: 2028
+  input:
+    age: 45
+    carers_allowance_earnings: 205 * 52
+    care_hours: 40
+    country: ENGLAND
+  output:
+    is_gainfully_employed_for_carers_allowance: true
+    carers_allowance: 0
+
+- name: 2030-31, net earnings of exactly £204 a week have not exceeded the limit.
+  period: 2030
+  input:
+    age: 45
+    carers_allowance_earnings: 204 * 52
+    care_hours: 40
+    country: ENGLAND
+  output:
+    is_gainfully_employed_for_carers_allowance: false
+
+- name: 2030-31, net earnings of £205 a week are over the limit.
+  period: 2030
+  input:
+    age: 45
+    carers_allowance_earnings: 205 * 52
+    care_hours: 40
+    country: ENGLAND
+  output:
+    is_gainfully_employed_for_carers_allowance: true
+    carers_allowance: 0