The earnings limit for Carer's Allowance is going up from next week, meaning thousands of people will be better off
News Charlotte Fisher 16:51, 04 Apr 2025
A major DWP benefit change is coming into place from Monday, April 7, meaning thousands will be eligible for an extra £333 a month.
Changes to the Carer's Allowance earnings threshold will see 60,000 more people eligible to claim the benefit and claimants will be able to earn more money before losing their entitlement, according to the DWP.
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Carer's Allowance is a weekly payment of £83, given to people who look after someone for 35 hours or more a week. You don't have to live with or be related to the person you are caring for to be eligible.
Currently, the earnings limit for Carer's Allowance - which determines how much a carer can earn and still claim the benefit - stands at £151 per week. If a carer earns more than £151 a week they are unable to claim the benefit payment for that week.
However, this threshold is going up to £196 per week from Monday, allowing carers to earn up to £45 a week more and still be eligible for the payments.
The new amount you are allowed to earn while claiming the benefit means that 60,000 more people will be able to get the weekly payments, according to the DWP.
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From next week, the earnings threshold will increase to the equivalent of 16 hours a week at the National Living Wage.
The government has said the change represents the largest increase to the benefit since it was introduced in 1976.
It will mean a carer can earn over £10,000 a year while still receiving the weekly payments.
An independent review into Carers Allowance overpayments was also launched by the government in October 2024, led by Liz Sayce OBE.
It comes after the DWP was criticised for its ‘cliff edge’ approach to the benefit, which sees carers lose the entitlement entirely when they go over the weekly limit.
The DWP has been criticised for demanding thousands of pounds in repayments from carers who inadvertently passed the earnings threshold, sometimes by as little as £1.
Findings from the review are expected in early summer 2025.
Rates of Carer's Allowance have also increased from this month in line with inflation, along with other DWP benefits.
Welfare benefit rates, including PIP and Universal Credit, are going up this month by almost 2 per cent. DWP and HMRC benefit payments increase every year in line with the rate of inflation from the previous September.
In September 2024 the inflation rate was confirmed as being 1.7 per cent, according to the consumer price index.
Meanwhile, the State Pension increases by whichever is highest out of inflation, wages based on average growth between May and July, or 2.5 per cent - which is known as the triple lock promise. This year, state pension rates will rise by 4.1 per cent in line with average earnings growth.
The DWP benefit increase means that from this month, Carer's Allowance will be £83.30 a week - up from £81.90 a week.
Charity Carers UK has welcomed the change to the earnings threshold but voiced concerns about recent proposed changes to Person Independence Payments (PIP) announced last month that could see thousands of people lose their eligibility for Carer's Allowance.
PIP is a ‘gateway’ benefit impacting the eligibility for Carer's Allowance which means the changes could see 150,000 carers lose out on financial support, the charity said.
Helen Walker, chief executive of Carers UK, said: "Unfortunately, we are looking at a game of two halves. Last year in the 2024 Autumn Budget we welcomed news that the limit on Carer’s Allowance would rise, which is a much-needed step forward, helping carers in employment on a low income to increase their earning potential.
"We know that the earnings limit is a barrier to taking on more work for carers. Some have cut back hours, switched jobs or even given up work completely. This will make a notable difference to many, but these changes now take place against the concerning backdrop of new welfare reforms announced in the 2025 Spring Statement.
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"Carers’ benefits are long overdue for reform. We welcome the rise in the earnings limit whilst acknowledging that many carers remain under huge financial pressure, including those who are not able to combine caring with paid work due to the intensity of their caring role. A full review of Carer’s Allowance, including the eligibility criteria, is needed urgently to ensure it provides adequate, long-lasting support."
