From April 7, the earnings limit for the Department for Work and Pensions (DWP) benefit will be rising, meaning claimants will be able to earn more money each week and still be eligible for payments
A major change to the Carer’s Allowance benefit will be introduced within days, and nearly 1.5 million claimants need to be aware of it. From April 7, the earnings limit for the Department for Work and Pensions (DWP) benefit will be rising, meaning claimants will be able to earn more money each week and still be eligible for payments.
Carer’s Allowance – which is claimed by around 1.4million people in the UK – is worth £81.90 a week and is awarded if you care for someone at least 35 hours a week. You can work alongside it, but you cannot earn over £151 a week after tax, National Insurance, pension contributions, and allowable expenses. If you earn even £1 over, then you lose your entire entitlement for the benefit. Carers can also face prosecution for benefit fraud in these instances.
In the Autumn Budget last year, Chancellor Rachel Reeves announced that the working limit would rise to £196 a week – which is equivalent to a further 16 hours of work a week at the minimum wage. This means claimants can earn an extra £45 each work. Reeves said the increase will be equivalent to more than £10,000 a year and is “the largest increase in carers’ allowance since it was introduced in 1976”.
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At the time, Reeves also announced that the government said it would also review the benefit overpayments and look into its “cliff-edge” nature rules.
Last year, a large number of carers came forward to share that they were being forced to repay huge amounts back to the DWP after mistakenly falling foul of the earning limit rules. Many said the rules are incredibly confusing, particularly if your earnings fluctuate due to changing hours.
Recent government data reveals that more than 140,000 people on Carer’s Allowance are in debt to the DWP after being overpaid. The rise in the earnings limit came after campaigns from charities across the benefits sector, including Carer’s UK and Money Saving Expert (MSE) website founder Martin Lewis.
At the time, Helen Walker, Chief Executive of Carers UK said the charity was “delighted” to hear that the working threshold had been lifted. She said the Government was taking “swift action” to end the “significant injustice” to unpaid carers.
Some carers were facing major repayments to the DWP. As the overpayments continued for several years, some faced debts worth up to tens of thousands of pounds. However, it’s important to note that although the earnings limit will be rising, so will the minimum wage.
The National Living Wage is going up from £11.44 an hour to £12.21, this is paid to workers over the age of 21 years. Younger employees, who are aged between 16 and 20, receive the National Minimum Wage. There are two different rates for this, depending on your age.
The National Minimum Wage will rise from £8.60 an hour to £10 next month for 18, 19, and 20-year-olds. This increase is worth £2,500 for an eligible full-time worker. For 16 and 17-year-olds, it will rise from £6.40 an hour to £7.55. From April 2025, Carer’s Allowance is also rising by 1.7%, increasing to £83.30 per week
How to report a breach in the earnings limit
Breaching the earnings limit classes as a “change in circumstances” in regards to your Carer’s Allowance claim. You can report a change in circumstances on the Government’s website under the “Carer’s Allowance: report changes” change. The process takes around 10 minutes and you’ll need your National Insurance number, details of the person you’re caring for and details of the change to hand.
Other changes in circumstances you have to report include:
- you changing, starting or leaving your job
- stopping being a carer
- stopping providing at least 35 hours of care a week
- taking a holiday or going into hospital – even if you arrange care while you’re away
- the person you care for going into hospital, into a care home or taking a holiday
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