Rise in earnings limit on Carer’s Allowance

Today the earnings limit on Carer’s Allowance rises to £95, increasing the amount carers can earn before losing their Carers Allowance of £48.65 a week.

The government has announced this change in policy as an interim measure, to prevent carers losing their Carers Allowance due to rises in the National Minimum wage taking them above the threshold.

Crucially this will break the cycle whereby carers were losing income due to the lack of synchronisation between rises to the earnings threshold and the minimum wage.

Without the change, carers who were working more than 16 hours per week would have automatically lost their Carers Allowance on 1 October when their wages rose above £87 a week. All carers in this position would then have had to reapply for the allowance once the earnings limit was increased in April.

As Imelda Redmond, Chief Executive of Carers UK explains, “Every time the National Minimum Wage rose, carers were often forced off benefit or forced to give up work because the rise was out of step with the rise in how much they were allowed to earn and still keep Carer’s Allowance.

“We are delighted that Government has listened and come up with this sensible interim measure whilst the review of carers’ benefits is being conducted as part of the National Carers Strategy.”

In announcing the policy change, Peter Hain, secretary of state for work and pensions said: "Carers play a vital role in our communities, providing invaluable help and support for their loved ones. It is right that where we can offer further support we do so.

"The higher weekly limit of £95 means that more carers will be able to keep their Carer's Allowance if they earn more money. And it means that more carers will now be able to receive Carer's Allowance for the first time.

"Together with next April's normal increase in Carer's Allowance, carers should be able to receive more than £7,500 a year combined."

This measure has been introduced pending the government's review of the National Carers Strategy, which will also look at reforming Carers Allowance to more effectively meet the needs of carers today.

Published: 1 October 2007