Starting Monday, April 7, a major change to the Carer’s Allowance earnings threshold will make thousands more eligible for the benefit. The Department for Work and Pensions (DWP) has announced that carers will be allowed to earn more money before their entitlement to the benefit is reduced or lost entirely. This adjustment could mean an additional £333 a month for many carers, providing much-needed financial relief.
In this comprehensive guide, we will explore the details of this change, how it will impact carers, the eligibility criteria, and the broader context of benefit changes affecting carers in the UK.
Summary Table Of Change in DWP Benefits
| Post Title | Carer’s Allowance Earnings Threshold Change |
|---|---|
| Country | United Kingdom |
| Carer’s Allowance Weekly Amount | £83.30 (from £81.90) |
| Earnings Threshold | £196 per week (up from £151) |
| Eligibility | Carers who earn up to £196 per week and care for someone for 35+ hours per week |
| Estimated Impact | 60,000 additional carers eligible for benefit |
| Expected Benefit Increase | £333 per month (additional eligibility) |
| Official Site for Details | Gov.uk – Carer’s Allowance |
What is Carer’s Allowance?
Carer’s Allowance is a weekly benefit payment designed to support individuals who care for someone with significant health needs or disabilities. To qualify, the carer must spend at least 35 hours per week caring for the person in question. Importantly, the person being cared for does not need to be a relative or living with the carer, making the benefit accessible to a broad range of individuals providing unpaid care.
Currently, the Carer’s Allowance is set at £83 per week. However, eligibility for this benefit is subject to a strict earnings threshold, which determines how much a carer can earn before losing their entitlement. If a carer earns more than a certain amount in a week, they lose the benefit for that week.
Changes to Carer’s Allowance Earnings Threshold
The most significant change being introduced on April 7 involves an increase in the earnings threshold for Carer’s Allowance.
Current vs. New Earnings Threshold
At present, the earnings threshold stands at £151 per week. If a carer’s income exceeds this limit, they will lose their entitlement to the benefit for that week. This rule has been a source of frustration for many carers, especially as it has led to situations where individuals could lose out on support for earning as little as £1 over the threshold.
From Monday, this threshold will increase to £196 per week. This adjustment allows carers to earn an additional £45 per week while still receiving their full entitlement to the Carer’s Allowance. The increase in the threshold is being hailed as a positive step forward, as it will allow carers to work more hours and earn more without losing their benefits.
Impact on Eligibility
The change in the earnings limit means that around 60,000 additional carers will become eligible to claim Carer’s Allowance, according to the DWP. The increase is aligned with the National Living Wage and will allow carers to earn the equivalent of 16 hours of work per week at the current wage rate.
The change represents the largest increase to Carer’s Allowance since it was introduced in 1976, allowing carers to earn up to £10,000 per year while still receiving the weekly benefit.
The DWP’s Review of Overpayments and Carer’s Allowance Reforms
This increase in the earnings threshold follows an independent review of Carer’s Allowance, which was launched in October 2024. The review is headed by Liz Sayce OBE, and it focuses on issues related to overpayments, which have been a point of contention for carers.
The DWP’s previous ‘cliff edge’ approach, where carers lose their benefits entirely for exceeding the earnings threshold by a small amount, has led to widespread criticism. In some cases, carers were asked to repay thousands of pounds for exceeding the earnings limit by as little as £1.
The review is expected to present its findings by summer 2025, and there are hopes that the findings will lead to a more flexible and fair system for carers, with less financial strain from accidental overpayments.
Inflation-Linked Benefits Increase
In addition to the changes to Carer’s Allowance, other DWP benefits, such as PIP (Personal Independence Payments) and Universal Credit, have also been increased in line with inflation.
From this month, Carer’s Allowance has seen a small increase, rising from £81.90 to £83.30 per week. This increase is part of an annual adjustment in line with the consumer price index, which reflects the inflation rate. For the 2024-2025 financial year, inflation was set at 1.7% as of September 2024.
State Pension Increase
In addition to Carer’s Allowance and other welfare benefits, the State Pension will also rise this year in line with the triple lock promise. This promises the highest increase out of inflation, wage growth, or 2.5%. This year, the increase for State Pension recipients will be 4.1%, in line with the growth in average earnings.
Concerns and Criticisms from Carers UK
While the increase in the earnings threshold is widely welcomed, there are still concerns about the overall adequacy of Carer’s Allowance and the broader welfare system.
Carers UK, a charity that supports unpaid carers, has voiced its support for the earnings threshold change. However, the charity has also raised concerns about recent changes to Personal Independence Payments (PIP), which affect eligibility for Carer’s Allowance.
The proposed changes to PIP could lead to 150,000 carers losing out on financial support, which has caused alarm within the carer community. According to Helen Walker, Chief Executive of Carers UK:
“Unfortunately, we are looking at a game of two halves. While the increase in the earnings limit is a much-needed step forward, the recent proposals for PIP changes could cause significant harm to carers who are already under financial pressure.”
The Need for Further Reform
Despite the positive steps taken with the earnings threshold increase, Carers UK has called for a full review of Carer’s Allowance, particularly concerning eligibility criteria and the level of financial support provided. Many carers, especially those who are unable to combine caring with paid employment, are struggling to make ends meet.
A comprehensive review of Carer’s Allowance would allow for a more thorough examination of the financial pressures on carers and the specific needs of those providing intensive care.
Frequently Asked Questions (FAQs)
1. Who will benefit from the Carer’s Allowance earnings threshold change?
The change will allow an additional 60,000 carers to be eligible for the benefit. The increase in the earnings threshold means that carers can now earn up to £196 per week and still receive the benefit.
2. How much is Carer’s Allowance now?
As of this month, Carer’s Allowance has increased to £83.30 per week, up from £81.90.
3. How does the new earnings threshold affect eligibility?
Carers can now earn up to £196 per week, which equates to the equivalent of 16 hours per week at the National Living Wage, without losing their entitlement to Carer’s Allowance.
4. Why has Carer’s Allowance been criticised in the past?
Carer’s Allowance has been criticized for its ‘cliff edge’ approach, where carers lose their entitlement as soon as they exceed the earnings limit by a small amount, sometimes as little as £1.
5. Are other benefits increasing in line with inflation?
Yes, other benefits such as PIP and Universal Credit are also increasing in line with the 1.7% inflation rate confirmed in September 2024.
Conclusion
The increase in the Carer’s Allowance earnings threshold is a significant step towards supporting unpaid carers in the UK. It will enable many carers to earn more without losing their entitlement to the benefit, easing some of the financial strain many have been facing. However, there is still work to be done to ensure that carers receive adequate financial support, and calls for further reform of Carer’s Allowance continue.
For more information and updates, visit the official Gov.uk – Carer’s Allowance page.
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