In April 2025, the Department for Work and Pensions (DWP) introduced a significant change to Carer’s Allowance, benefiting thousands of unpaid carers in the UK.
This update aims to provide more financial flexibility for carers while easing the pressure of balancing work and caregiving responsibilities.
Overview of Carer’s Allowance
Carer’s Allowance is a weekly government payment designed to support individuals who provide care for someone with a disability or long-term illness for a minimum of 35 hours a week. In 2025, the weekly allowance stands at £81.90.
Before the update, carers could lose their entitlement to Carer’s Allowance if their weekly earnings exceeded £151. With the new threshold of £196, more part-time workers will now be able to earn an income while still receiving this vital support.
Impact of the Change
This modification is expected to benefit approximately 60,000 carers by 2029, offering more financial stability to those balancing employment with caregiving duties.
Key Update: Changes to the Weekly Earnings Limit
The significant change in the Carer’s Allowance rules is the increase in the weekly earnings threshold. Carers can now earn up to £196 per week without losing their entitlement, up from the previous limit of £151.
Breakdown of the Updated Rules
| Category | Details |
|---|---|
| New Weekly Earnings Limit | £196 |
| Previous Threshold | £151 |
| Weekly Allowance Rate | £81.90 |
| Hours of Care Required | Minimum of 35 hours per week |
| Administered By | Department for Work and Pensions (DWP) |
| Expected Beneficiaries | 60,000 by 2029/2030 |
DWP Minister Andrew Western has confirmed that this is the largest-ever increase in the earnings limit for Carer’s Allowance.
Why This Change Is Important
Unpaid carers play a crucial role in the UK’s care system. Many carers sacrifice full-time employment to provide essential care, facing financial challenges due to the inability to work while managing caregiving duties.
By increasing the earnings threshold, the government provides more financial breathing room for carers.
This update also helps avoid overpayments, which occurred when carers’ earnings slightly exceeded the previous threshold, often leading to stressful repayment demands.
Overpayments: Addressing Past Issues
In response to past problems with overpayments, the DWP is conducting an independent review into these incidents. Many carers unintentionally exceeded the earnings cap by small amounts and were later asked to repay large sums.
This review, led by Liz Sayce OBE, will focus on identifying the causes of overpayments, gaps in communication, and the emotional and financial toll on affected carers. Results from this review are expected by summer 2025, which may lead to policy changes aimed at reducing such issues in the future.
Repayments and Flexible Options
To support those impacted by overpayments, the DWP is introducing more flexible repayment plans. Additionally, carers will receive text alerts to remind them when to update their income details, minimizing the risk of future overpayments.
These improvements are intended to streamline communication and reduce unnecessary stress for carers already managing significant responsibilities.
Eligibility for Carer’s Allowance in 2025
To qualify for Carer’s Allowance in 2025, individuals must meet the following criteria:
- Provide care for at least 35 hours per week
- Earn less than £196 per week after deductions
- The person being cared for must receive a qualifying disability benefit (e.g., PIP or DLA)
- The carer must not be in full-time education
- The carer must live in the UK and have access to public funds
These requirements ensure that Carer’s Allowance supports those who are genuinely in need of financial assistance while fulfilling caregiving duties.
Actions Carers Should Take
If you are currently receiving or planning to apply for Carer’s Allowance, it’s essential to:
- Check eligibility using the Carer’s Allowance Calculator on GOV.UK
- Update income and employment details with the DWP before April 2025
- Keep accurate records, such as payslips and correspondence with the DWP
- Stay informed about the overpayment review and any potential updates
Being proactive in managing your claim can help avoid interruptions in payments and future repayment issues.
The update to Carer’s Allowance provides vital relief to thousands of unpaid carers across the UK. The increase in the earnings threshold offers greater financial stability for part-time workers, helping them continue their caregiving roles while maintaining an income.
With the new £196 limit, the government is showing increased recognition of the hard work and sacrifice carers make every day.
FAQs
How much can I earn and still receive Carer’s Allowance?
You can now earn up to £196 per week without losing eligibility for Carer’s Allowance.
What is the weekly rate for Carer’s Allowance in 2025?
The weekly rate for Carer’s Allowance in 2025 is £81.90.
Will the overpayment review affect my Carer’s Allowance?
The review aims to address past overpayment issues, but it will not affect your ongoing entitlement as long as you meet the eligibility requirements.