In a move welcomed by unpaid carers across the UK, the Department for Work and Pensions (DWP) has increased the weekly earnings limit for Carer’s Allowance by £45.
Starting from April 2025, carers can now earn up to £196 per week, up from the previous limit of £151, without losing their benefit entitlement.
This update will provide critical financial breathing room for thousands of carers juggling employment and caregiving responsibilities.
Carer’s Allowance: What’s Changing?
Carer’s Allowance is a payment made to individuals who provide at least 35 hours of care per week to someone receiving a qualifying disability benefit.
While the weekly payment itself remains modest, the raised earnings threshold ensures more carers can participate in the workforce without fear of losing this vital support.
Here’s a clear breakdown of the key changes:
| Category | Before April 2025 | After April 2025 |
|---|---|---|
| Weekly Earnings Limit | £151 | £196 |
| Carer’s Allowance Weekly Payment | £81.90 | £83.30 |
| Required Care Hours per Week | 35 hours | 35 hours |
| Eligibility Earnings Rule | Fixed cap | Pegged to living wage |
| Estimated Additional Carers Helped | — | 60,000 by 2029 |
Why the £196 Earnings Limit Matters
With the National Living Wage rising, many carers previously faced the dilemma of either reducing work hours or losing eligibility for Carer’s Allowance.
The updated £196 earnings limit equates to roughly 16 hours of work per week at the new living wage, which provides much-needed flexibility for carers who wish to stay active in the workforce.
This change allows part-time or casual workers to increase their hours or wages slightly without triggering the loss of their benefit, creating a more sustainable income model for many families.
Increased Financial Protection for Carers
The earnings limit increase also addresses a long-standing issue: many carers unknowingly breached the limit due to small wage increases or working overtime, only to later face overpayment penalties. By aligning the threshold with wage growth, the system becomes more predictable and supportive.
The new limit is designed to grow in line with changes to minimum wage, offering a long-term solution rather than a temporary adjustment.
Eligibility Criteria for Carer’s Allowance in 2025
To be eligible for Carer’s Allowance, individuals must meet the following requirements:
- Provide care for at least 35 hours per week to someone with a qualifying disability benefit.
- Earn no more than £196 per week after tax, National Insurance, and allowable expenses.
- Be over 16 years of age.
- Not be in full-time education.
- Be living in the UK with access to public funds.
Importantly, even if a person qualifies, receiving Carer’s Allowance can affect other benefits such as Universal Credit, so it’s crucial to evaluate the overall impact.
Long-Term Impact on Carers
The government’s decision is projected to benefit around 60,000 additional carers by 2029, many of whom were previously ineligible due to the rigid income cap.
This adjustment not only provides financial relief but also acknowledges the value of unpaid carers who provide essential support to loved ones and save the government billions annually in care costs.
Furthermore, this move helps carers maintain employment ties, build workplace experience, and contribute to the economy while continuing their vital caregiving role.
The £45 increase in the Carer’s Allowance earnings limit is a vital improvement to a system that has long been criticized for limiting carers’ economic freedom. By raising the threshold to £196 per week, thousands of carers can now work more, earn more, and still receive financial support.
This reform represents a meaningful step toward valuing and protecting unpaid carers, who play a crucial role in the wellbeing of countless individuals across the UK.
FAQs
When does the new £196 earnings limit for Carer’s Allowance take effect?
The updated limit begins in April 2025 and applies to all new and current Carer’s Allowance recipients.
Will my Carer’s Allowance stop if I earn £200 per week?
Yes, earnings over £196 per week (after deductions) will typically disqualify you from receiving Carer’s Allowance.
Can I still claim other benefits along with Carer’s Allowance?
Yes, but Carer’s Allowance may impact other benefits like Universal Credit. It’s best to review your full entitlements.