The UK government has announced plans to change how Carer’s Allowance is affected by earnings. The goal is to reduce the financial risk for unpaid carers who earn just a little more than the weekly limit. Source: skintdad.co.uk.
What’s Changing?
Carer’s Allowance is currently £86.45 per week for those who care at least 35 hours a week for someone on a qualifying disability benefit.
The current rule has a weekly earnings limit of £204. This is after tax, National Insurance, and allowed expenses—like half of pension contributions—not before deductions.
If a carer earns just over £204—such as £204.01—the entire allowance is lost. This sudden drop is called the ‘cliff edge’. It can happen from extra hours, overtime, or a small pay rise.
The government will replace this with a gradual taper. Instead of losing the full payment, carers would lose only part of it. The reduction will be £1 for every £1 earned above the limit.
How It Would Work in Practice
That leaves them £76.45 better off than under the current system.
It’s important to note this does not increase total household income. A carer earning exactly £204 and getting £86.45 would have a total of £290.45. The new system doesn’t automatically boost overall income.
When Will the Change Start?
The new rules will begin in the 2030–31 financial year—April 2030 to March 2031.
This was confirmed by HM Treasury on 26 October 2026, ahead of the Budget.
Before the change, the Department for Work and Pensions (DWP) must develop a new computer system to manage the taper. This is essential for accurate calculations.
Until then, the current rules remain in force. Carers must still avoid earning over £204 a week.
Who Will Benefit?
The change helps carers who combine unpaid care with part-time work or self-employment.
These carers often face small income increases from shifts, overtime, or pay rises. Under the old system, even a small rise could trigger a full loss of allowance.
For example, working an extra hour to cover bills could result in losing the entire Carer’s Allowance. The new taper prevents this financial shock.
Eligibility rules remain unchanged. Carers still need to provide at least 35 hours of care per week to someone receiving a qualifying disability benefit.
Universal Credit and Other Benefits
Carers on Universal Credit face a key issue: their benefit is reduced by the amount of Carer’s Allowance they receive.
If Carer’s Allowance is lost, Universal Credit may also drop. The new taper will reduce the allowance gradually, but the government has not explained how this will interact with Universal Credit.
Carers should check their Universal Credit account or contact DWP to understand how changes affect their overall benefits.
Scotland and Northern Ireland
Scotland has its own benefit, the Carer Support Payment, which also has a £204 weekly earnings limit.
Carers in Scotland face the same cliff-edge rule as those in England and Wales.
No change to the Carer Support Payment has been confirmed. Carers in Scotland will continue to face the same risk of losing their allowance when earnings go above the limit.
There is no confirmed change to benefits in Northern Ireland either. Carers there will follow the existing rules until further notice.
What About Overpayments?
The announcement does not cancel existing overpayments automatically.
The DWP is reviewing overpayments made between 10 April 2015 and 2 September 2025. This review checks if earnings were incorrectly calculated.
If a carer’s case is included, the DWP will contact them directly. They may get a refund, a debt reduction, or no change. There’s no need to request this review.
What Should Carers Do Now?
Carers should take these steps to protect their entitlements:
- Check weekly earnings after tax, National Insurance, and allowed expenses. This includes half of pension contributions.
- Report any changes in work—like new jobs or shifts—to the DWP immediately.
- Update Universal Credit through your online account if your income or hours change.
- If unsure how earnings are assessed, contact the Carer’s Allowance Unit directly.
There is no new application process. Carers must still meet existing eligibility rules.
The most important step now is to ensure earnings are counted correctly and that changes are reported promptly.
A free benefits calculator is available on GOV.UK to help carers understand how income and expenses affect their total support.
While the new taper system won’t start until 2030–31, the current rules remain unchanged. Carers must still avoid earning over £204 a week to keep their allowance.
Sources & further reading
Featured image: Younger woman holding hands with an older woman sitting on a sofa at home. Via original publisher. Image source
