The Department for Work and Pensions (DWP) has confirmed that people claiming Carer’s Allowance can now earn up to £204 a week while continuing to receive the benefit. The updated earnings limit follows a change introduced by the Labour government and forms part of a broader review of the allowance.
The announcement comes as the government launches a six-week call for evidence examining how Carer’s Allowance could be updated for the first time since it was introduced in 1976. According to the DWP, the review will consider whether existing rules still reflect modern patterns of work and caring responsibilities.
The revised earnings threshold increases the amount carers can earn while remaining eligible for support to around £10,000 a year. At the same time, ministers have indicated that further changes may be considered after gathering evidence from carers, charities and other organisations.
The review also follows concerns that the current system can create difficulties for people whose earnings vary from week to week, particularly where small changes in income affect entitlement to the benefit.
Government Confirms Higher Earnings Limit While Seeking Evidence on Future Reforms
According to updated DWP guidance, the weekly earnings limit for Carer’s Allowance has been increased to a record £204. The change allows eligible carers to earn around £10,000 annually while continuing to receive the benefit.
Minister for Social Security and Disability Sir Stephen Timms said unpaid carers make an important contribution by providing support to family members and others in need. He said they deserve a system that better reflects that contribution and added that the call for evidence demonstrates the government’s intention to consider further reforms shaped by carers’ experiences.
According to the DWP, the consultation opened on 7 July and will run for six weeks, inviting responses from carers, representative organisations and charities. Among the issues being examined are replacing the current earnings “cliff edge” with a taper, improving support for people with fluctuating incomes and reviewing rules governing paid employment while receiving Carer’s Allowance.
The department has also said it is considering whether changes should be made to regulations covering working hours to better reflect contemporary caring responsibilities.
Charities Welcome Review but Say Existing System No Longer Reflects Modern Caring
Carers’ organisations have broadly welcomed the government’s review while arguing that wider reform remains necessary. According to Carers UK, the current system no longer reflects the realities faced by many unpaid carers.
Emily Holzhausen CBE, Director of Policy and Public Affairs at Carers UK, said the existing earnings limit rules are inflexible and difficult to manage for carers with fluctuating incomes. She added that these arrangements can discourage some people from claiming support to which they are entitled. Holzhausen also welcomed the government’s decision to gather further evidence and said it was important that as many carers as possible contribute during the consultation period.
Carers Trust also supported the review. Chief Executive Kirsty McHugh said the organisation, carers and its network of more than 130 local carer services had long called for a comprehensive review of Carer’s Allowance. She said society, employment and caring had all changed significantly since the benefit was introduced in 1976 and described the government’s commitment to reviewing the system as encouraging.
According to the reports, the review follows the independent Sayce Review, which concluded that the current earnings rules are outdated and that unclear guidance on variable earnings had contributed to some carers building up unexpected debts. The DWP has also begun reviewing around 200,000 Carer’s Allowance cases, with around 25,000 carers expected to have debts reduced, cancelled or refunded. The consultation is scheduled to close on 18 August 2026, with responses intended to inform future reforms to Carer’s Allowance.
