• The earnings limit on Carer’s Allowance, the main carers’ benefit, will go up from £151 per week to £196 per week in April

• Carer’s Allowance itself remains the lowest benefit of its kind and will go up from £81.90 to £83.30 – less than the price of a first-class postage stamp

• Proposed changes to Personal Independence Payment (PIP) entitlement rules will also see 150,000 lose their Carer’s Allowance by 2029/30

Unpaid carers in employment on a low income will benefit from a welcome rise in the earnings limit on Carer’s Allowance, allowing them to earn up to £2,340 more per year.

From 7 April 2025, working carers can earn up to £196 per week after certain deductions, the equivalent of 16 hours at the National Living Wage, and continue to claim Carer’s Allowance. This is an increase of £45 compared to the previous earnings threshold of £151.

Charity Carers UK is welcoming the change, which is the largest increase in the earnings limit for the benefit since it was introduced in 1976. It will allow 60,000 more carers to access Carer’s Allowance, providing vital income for those juggling work and care.

However, the charity is also concerned about changes to Personal Independence Payments (PIP) outlined in the Government’s welfare reform green paper. As PIP is a ‘gateway’ benefit impacting eligibility for further support for carers, this will see 150,000 people lose their Carer’s Allowance by 2029/30.

Carer’s Allowance, the main benefit for carers, is available if you spend at least 35 hours a week looking after someone who is disabled, ill or elderly. The increase to the earnings limit this month will help thousands of carers – whose earnings were previously above this amount - to access Carers Allowance for the first time.

Carers UK has long been calling for the earnings limit to be tied to the National Living Wage so that carers do not have to reduce their hours as the earnings limit fails to keep up with increases to the National Living Wage. The charity says regulations to formally tie Carer’s Allowance to the National Living Wage must follow.

The earnings limit increase will help carers in the labour market to stay in work and increase their earnings potential. However, for those who are unable to combine work and care, Carer’s Allowance – the main carers’ benefit - remains the lowest benefit of its kind. From 7 April 2025, it will rise by 1.7% from £81.90 to £83.30 per week, which is less than the price of a first-class postage stamp.  

Government plans for welfare reform could also mean less people are eligible for Carer’s Allowance in the future. There are an estimated 1.2 million carers living in poverty across the UK. Research from Carers UK has found that 42% of carers receiving Carer’s Allowance are struggling to make ends meet and 90% of carers do not think this benefit offers sufficient financial support.

Helen Walker, Chief Executive of Carers UK, said:

“Unfortunately, we are looking at a game of two halves. Last year in the 2024 Autumn Budget we welcomed news that the limit on Carer’s Allowance would rise, which is a much-needed step forward, helping carers in employment on a low income to increase their earning potential.

“We know that the earnings limit is a barrier to taking on more work for carers. Some have cut back hours, switched jobs or even given up work completely. This will make a notable difference to many, but these changes now take place against the concerning backdrop of new welfare reforms announced in the 2025 Spring Statement.

“Carers’ benefits are long overdue for reform. We welcome the rise in the earnings limit whilst acknowledging that many carers remain under huge financial pressure, including those who are not able to combine caring with paid work due to the intensity of their caring role. A full review of Carer’s Allowance, including the eligibility criteria, is needed urgently to ensure it provides adequate, long-lasting support.”