Calculating CARE Pay

From 1 April 2014, the Local Government Pension Scheme (LGPS) became a Career Average Revalued Earnings (CARE) Scheme. With the change in Scheme, also came a change in pensionable pay for post April 2014 calculations.

For a quick glance at the differences between final pay and CARE pay, you can view our factsheet. However, please read on for in depth information on CARE Pay.

CARE Pay is the cumulative Pensionable Pay (Actual Pay) that an employee has earnt over each year from 1st April to 31st March of the following year. If an employee leaves employment between April and March of the following year, then a part year is also calculated from 1st April to the date of leaving.

It will include anything that is not excluded by the Regulations, and is the pensionable pay, as described below, plus any applicable Assumed pensionable pay (APP).

a) all the salary, wages, fees and other payments paid to the employee, and                       

b) any benefit specified in the employee’s contract of employment as being a pensionable emolument.

Exclusions when calculating CARE pay are;

  1. Any sum which has not had income tax liability determined on it.
  2. Any travelling, subsistence or other allowance paid in respect of expenses incurred in relation to the employment.
  3. Any payment in consideration of loss of holidays.
  4. Any payment in lieu of notice to terminate a contract of employment.
  5. Any payment as an inducement not to terminate employment before the payment is made.
  6. Any amount treated as the money value to the employee of the provision of a motor vehicle or any amount paid in lieu of such provision.
  7. Any payment in consideration of loss of future pensionable payments or benefits.
  8. Any award of compensation (excluding any sum representing arrears of pay) for the purpose of achieving equal pay in relation to other employees.
  9. Any payment made by the scheme employer to a member on reserve forces service leave.
  10. Returning Officer, or acting returning Officer fees other than fees paid in respect of –
    Local government elections
    Elections for the National Assembly of Wales
    Parliamentary elections, or
    European Parliamentary elections
%d bloggers like this: