A significant update to the Carer’s Allowance benefit will be implemented on Monday, April 7, potentially providing an extra £333 per month for thousands of carers.
This new change is expected to help more individuals claim the benefit and allow them to earn more without losing eligibility.
Overview of Carer’s Allowance
Carer’s Allowance is a weekly payment of £83 given to those who provide care for someone for a minimum of 35 hours per week. The benefit is available regardless of whether the person being cared for lives with the carer or is a family member.
As of now, the earnings threshold for Carer’s Allowance is set at £151 per week. If a carer’s weekly earnings exceed this limit, they are no longer eligible to receive the benefit for that week.
Key Change: Increase in Earnings Threshold
Starting April 7, the earnings limit for Carer’s Allowance will rise to £196 per week, allowing carers to earn up to an additional £45 per week without affecting their eligibility for payments. This change is expected to allow an extra 60,000 individuals to benefit from the allowance.
| Old Earnings Threshold | New Earnings Threshold | Difference |
|---|---|---|
| £151 per week | £196 per week | £45 increase |
This change will be equivalent to earning an extra 16 hours per week at the National Living Wage.
Historical Context and Impact
The increase in the earnings limit represents the largest rise to Carer’s Allowance since its introduction in 1976. The change means carers can now earn more than £10,000 annually while still receiving the benefit.
The Department for Work and Pensions (DWP) has also initiated an independent review into overpayments related to Carer’s Allowance.
This review was launched in October 2024 under the leadership of Liz Sayce OBE after criticism about the DWP’s policy of cutting off carers’ benefits for small overages in earnings.
DWP Benefit Adjustments
Alongside the increase in the Carer’s Allowance threshold, DWP benefits are rising to match inflation. Benefits like Personal Independence Payment (PIP) and Universal Credit are also seeing an increase of nearly 2 percent. This adjustment is based on the 1.7 percent inflation rate confirmed in September 2024.
In contrast, State Pension benefits are increased according to the triple lock promise, which ensures a rise based on the highest of inflation, wage growth, or 2.5 percent. For this year, State Pension rates will rise by 4.1 percent, reflecting wage growth.
Carer’s Allowance will now be set at £83.30 per week, up from the previous rate of £81.90 per week.
Carers UK’s Response to Changes
Charity Carers UK has welcomed the increase in the earnings threshold, but has expressed concerns regarding the proposed changes to Personal Independence Payment (PIP).
PIP is a critical benefit that determines eligibility for Carer’s Allowance, and the planned changes may result in around 150,000 carers losing their access to Carer’s Allowance.
Helen Walker, Chief Executive of Carers UK, shared her concerns:
“While we applaud the rise in the earnings threshold, we are concerned about the wider picture of welfare reforms. Many carers face significant financial challenges, especially those who cannot balance their caregiving role with paid work. The rise is a positive step, but a comprehensive review of Carer’s Allowance, including eligibility criteria, is urgently needed.”
The increase in the earnings limit for Carer’s Allowance is a significant step forward, providing much-needed financial support for those who balance caring with work. However, challenges remain, including concerns about proposed welfare reforms and their potential impact on carers’ eligibility.
The government’s focus on improving benefits for carers is a welcome change, but ongoing reforms and a review of Carer’s Allowance eligibility are crucial to ensuring long-term support for carers facing financial hardship.
FAQs
How much is the new earnings limit for Carer’s Allowance?
The new earnings limit is £196 per week, allowing carers to earn up to £45 more per week before losing their benefit eligibility.
How many people will benefit from this change?
An additional 60,000 people are expected to benefit from the higher earnings threshold.
How much can carers now earn annually without affecting their Carer’s Allowance?
Carers can now earn over £10,000 per year while still receiving the weekly payments.
What other benefits are increasing along with Carer’s Allowance?
Benefits such as Universal Credit, Personal Independence Payment (PIP), and State Pension are all set to increase in line with inflation or wage growth.