03 Jun 2015
The Pensions Regulator has warned that even those who only employ a single person such as a carer or nanny must comply with the auto-enrolment regulations and possibly pay pension contributions, or face a possible fine of £400.
Under auto-enrolment, all employees over the age of 22 and earning more than £10,000 per annum now have a right to a workplace pension unless they decide to opt out.
Over five million workers in larger companies are already in the scheme, and the ongoing roll-out means that as from 1 June small businesses employing up to 30 staff will be required to implement it, with an estimated 3.8 million workers expected to be enrolled by smaller employers between now and 2018.
This includes many people who have this week been sent letters by the Pensions Regulator warning that if they employ a carer or nanny they may have to pay pension contributions to their sole employee.
Edward Graham of Carers UK said that the letters had ‘caused a very high degree of anxiety amongst many people.’
However, the Pensions Regulator said that it is working with 200 support organisations to ensure that people had access to proper advice.
Anyone who took on an employee for the first time after 1 April 2012 will not have to pay pension contributions for another two years, and it is expected that many local authorities will carry the costs, especially for elderly or disabled people whose carer is organised through the local authority.
The Pensions Regulator has provided a guide for employers of care workers, which can be downloaded here.