New Cleaner Pension Laws – What Do They Mean?

If you currently employ a cleaner, housekeeper, carer, nanny or gardener, you could face a £400 fine.

With new laws that have come into effect this month, people who employ the help of another around the house now have to pay in to a pension scheme, or face a fine. Elderly people throughout the country have received official warning letters, explaining that by employing a carer they are classed as a small business/employer; and now need to pay out an extra 1% (rising to 3% by 2018) in to a pension.

There is uncertainty as to when this will be starting for each individual, as some have already been enrolled, and others will not be expected to start until 2018.

But, what does this mean?

Unfortunately, it means there may be a decrease in self-employed helpers. As people become put off by the additional costs, less money can be made within the industry. Also, as the law only comes into effect once an employee is being paid £10,000 a year or more, people may be more inclined to pay helpers less money in order to avoid the additional costs.

What is the solution?

As the costs of self employed help increase, people will naturally make the move towards agencies and companies that provide the required services. As the job of providing a pension will then be in the hands of the employer, this means less expense for the individual, and easier management of pay.

To enquire about our services at Mum’s Helping Hands, please contact us here.