Today (Saturday 26 October 2024) Carers UK is reacting positively to a report in The Sun that the Chancellor, Rt Hon Rachel Reeves MP, will announce an unprecedented rise in the earnings limit on Carer's Allowance, the main carers' benefit, to the equivalent of 16 hours at the National Living Wage in her Budget next week.
The report suggests that this will mean that 60,000 more carers will be eligible for Carer's Allowance, with the rise in earnings allowing unpaid carers to earn £30 more per week than they could previously. The limit, according to The Sun, will rise from £151 to £181 per week. It's expected the announcement will mean changes will take place from next April 2025. This is one of the biggest rises in the earnings limit since the benefit was first created in 1976.
Unpaid carers with earnings pushed out of work. Many will be lifted out of poverty with change
Currently around 175,000 unpaid carers have earnings and Carer's Allowance. Research released earlier this week by Carers UK found that 4 out of 10 carers with difficulties with the earnings limit had given up work and 62% said that they would like to work more but couldn't because of earnings restrictions and other issues. Another report by Carers UK, modelling carers' poverty, found that thousands would be lifted out of poverty with a rise in the earnings limit.
Unpaid carers have lost vital income year on year, with lack of change
Because the earnings limit has not risen in line with the National Living Wage, unpaid carers have been losing vital income year on year. In 2019, they were able to work around 15 hours per week at the National Living Wage and still receive the benefit. This has fallen to just over 13 hours per week, a loss of 13 days paid work across a year, something that families simply cannot afford.
Carers UK has been campaigning for a change to the earnings limit for years, asking for it to be aligned with at least 16 hours at the National Living Wage.
Changes could also help some carers avoid overpayments of Carer’s Allowance
The charity has also highlighted the scandal of Carer's Allowance overpayments, with the Government recently announcing a review headed by former Disability Rights UK CEO, Liz Sayce OBE.
Carers have shared experiences with Carers UK where they have had to reduce working hours just to stay within the earnings limit. For some, this meant that work was impossible as employers were unable to lower working hours. For others, they didn't realise that their rise in the National Living Wage took them just a few pounds over the earnings limit, unwittingly ending up with benefits overpayments, with carers having to pay back thousands in arrears.
Helen Walker, Chief Executive of Carers UK said:
"We are delighted to hear that the Chancellor is expected to increase the earnings limit on Carer's Allowance, something that we've been asking of Government for nearly two decades. It's great that the Government seems to be taking swift action to end what we feel is a significant injustice for some of the most deserving people of this country, unpaid carers.
"It's been heartbreaking and frustrating to hear carers having to choose between paid work and Carer's Allowance simply because of a rise in the National Living Wage - something that is supposed to benefit low paid workers, not put them out of work. We're delighted that this is being addressed.
"Carers have told us that juggling work and care is critical for them, keeping a toe in the labour market whilst caring significant hours for their older, ill and disabled relatives and friends. This is a really important poverty prevention measure and will help many carers, particularly women, stay in the labour market.”
Recently published research by Carers UK found that 4 in 10 carers experiencing difficulties with Carer’s Allowance had given up work as a result of the earnings limit and 62% said that they would have more paid work if the earnings limit was increased.
Carers UK is looking forward to hearing more detail in the Budget on Wednesday, including whether the earnings limit will go up regularly year on year with the National Living Wage.
Carers UK has also called for a raft of measures to improve Carer's Allowance as the lowest benefit of its kind, including a complete review to make the benefit fit carers' lives better. Having called for the earnings limit to rise to at least 16 hours per week for decades, in the light of new research Carers UK recently set a longer term goal of 21 hours for the earnings limit.
ENDS
Notes:
- Carer's Allowance is worth £81.90 per week and is paid to people who care at least 35 hours per week for someone with significant needs for care and support, getting Attendance Allowance, Personal Independence Payment (PIP) Daily Living Component or Disability Living Allowance care component at the middle or higher rate. In order to receive the benefit, a person must be current earning £151 per week after deductions. If the carer goes even £1 over this limit, they have to pay back 100% of the benefit i.e. £81.90 per week. https://www.carersuk.org/help-and-advice/financial-support/carer-s-allowance/
- Around 34,000 unpaid carers had overpayments in the last year, many unwittingly going over the limit. Carers UK produced a report on Carer's Allowance overpayments, supported by Lloyds Bank Foundation, here: with recommendations on changing the system. https://www.carersuk.org/reports/carer-s-allowance-overpayment-report/
- Carers UK recently published poverty and financial hardship modelling, supported by abrdn Financial Fairness Trust here: https://www.carersuk.org/reports/poverty-and-financial-hardship-of-unpaid-carers-in-the-uk/
- State of Caring 2024 - the impact of caring on finances https://www.carersuk.org/reports/state-of-caring-2024-the-impact-of-unpaid-caring-on-finances/