In the latest Budget, the government has announced a significant change to the Department for Work and Pensions (DWP) Carer’s Allowance, affecting the many carers across the UK.
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If you’re a carer or know someone who is, here’s everything you need to know about this update and what it could mean for you.
What is carer’s allowance?
Carer’s Allowance is a weekly payment from the government for people who spend at least 35 hours a week looking after someone who needs care.
Currently, around 1.4 million people across the UK claim this benefit, which is worth £81.90 a week.
To qualify, the carer must be looking after someone for at least 35 hours each week, and there’s a limit to how much they can earn if they’re working on top of providing care.
The current earning rule
Until now, carers have been allowed to work alongside claiming Carer’s Allowance but have had a strict weekly earnings limit of £151 after tax, National Insurance, pension contributions, and any other allowable expenses.
If they go even £1 over this amount, they lose their entire Carer’s Allowance for that week.
This “cliff-edge” rule has created a financial strain for many, as fluctuating work hours or overtime can unintentionally cause them to exceed the threshold, leading to sudden losses of benefit and even accusations of benefit fraud.
The current rule has been a source of frustration for many carers who often have no control over their weekly earnings, especially with work hours that can change at short notice.
Campaigners, including high-profile figures like Martin Lewis, have been pushing for a rethink on this strict earnings limit.
What’s changing?
In April 2025, a big change is set to take place. The Chancellor has confirmed that the earnings limit will be lifted
It will allow carers to work another 16 hours a week (when paid at minimum wage).
This means carers will have more flexibility and can earn more while still being able to claim Carer’s Allowance, without the risk of losing their entitlement over small changes in their income.
For many, this will be a huge relief, especially as living costs remain high and every bit of income can make a difference.
The change aims to make it easier for carers to balance work with their caring responsibilities without the constant worry of losing their benefits.
Why was this change necessary?
Over the past few years, there has been a growing outcry from carers who’ve been forced to repay thousands to the DWP because they unknowingly went over the earnings limit.
By May 2024, the DWP was already trying to recover funds from over 134,800 people who had been overpaid their Carer’s Allowance.
The system was widely criticised for being confusing, as even a small increase in income, like extra hours worked or an unexpected bonus, could push carers above the earnings limit without them realising it.
This led to situations where honest mistakes were treated as fraud cases, with carers facing financial penalties.
This change will help many people feel more secure in managing their finances, particularly in jobs where hours and earnings aren’t always predictable.
What does this mean for you as a carer?
The change to the earnings limit means that if you’re a carer, you’ll be able to work and earn more money without fearing that you’ll lose your Carer’s Allowance.
This will provide more financial flexibility and peace of mind, allowing you to focus more on providing care while still being able to support yourself.
However, with this shift, it’s always worth checking the latest guidelines from the DWP to understand exactly how this will work.
For example, it’s not yet clear if there will be a different threshold or other changes in eligibility requirements, so keeping an eye on DWP updates will be important.
Final thoughts
This change is a positive step towards supporting carers, who provide vital care and support to their loved ones while often facing financial challenges themselves.
By removing the rigid earnings limit, the government is giving carers a little more room to breathe, reducing the risk of financial penalties over small income increases.
If you’re receiving Carer’s Allowance or think you might qualify, be sure to stay informed and check for updates from the DWP on how these changes will roll out.
Every bit of extra income counts, and this update could make a real difference in helping carers across the country lead more financially secure lives while continuing the valuable work they do.
Sunita says
I don’t think there should be a monetary limit to how much a person can earn to be able to claim carers allowance. It could be that someone is in a good job and their hourly rate is high but they still care for someone.
Carers allowance will always be a lot cheaper than paying a private carer so every single carer out there is saving the government money.
The government should encourage carers to continue. The payment also acts as a thank you because it’s hard work being a carer. Even if someone is on a high hourly rate it’s nice to reactive a little bonus in return for the hard work they’re doing.