There are certain benefits which it isn’t possible to receive simultaneously. Carers Allowance and State Retirement Pension are two such benefits. You cannot receive them both, so you are paid the one of greatest value and retain what is called ‘underlying entitlement’ to the other.
Underlying entitlement to Carers Allowance can make a difference to the amount you might qualify for with other benefits, if they are means tested. So for example, income related Pension Credit, Housing Benefit and Council Tax Benefit are all means tested. So if you made a claim for any of these, it might be that your entitlement increases because you are both a pensioner and a carer.
I’m afraid there’s no point in appealing. It’s been part of Social Security legislation for many years and isn’t likely to change. The point of Carers Allowance essentially is that because you are a carer, it reduces your earning power, so (paltry amount though it is), the allowance is supposed to compensate you somewhat for this reduction in earnings. Once you become a state pensioner, it is assumed that you no longer work, therefore the state doesn’t need to compensate for this earnings deficit.
The exact same thing happened to my OH this year when he started to receive his state pension. So I had to explain It to him too. No it doesn’t seem fair, but then the benefits system in this country isn’t always ‘fair’.