Carer’s Allowance news: How recent changes impact carers

Caring for a loved one can be both rewarding and challenging, often requiring a significant amount of time, energy, and resources.   

To support those who dedicate their time to providing care, the UK government offers a benefit known as Carer’s Allowance. It offers financial support to help ease the personal and financial challenges of caregiving, providing eligibility criteria are met.   

There have been changes to the Carer’s Allowance rate, which affects carers across the country. In this article, we’ll break down what Carer’s Allowance is, who qualifies, how much support it provides, and the recent changes, to help carers understand what financial assistance is available to them.

Carer’s Allowance news and updates

At present, carers are limited to earning up to £151 per week after tax and allowable deductions to maintain their Carer's Allowance eligibility. However, the carer's allowance news from Rachel Reeves announced this threshold will rise to £181 per week starting April next year, which is the equivalent of 16 hours of work per week at the National Living Wage.

This increase effectively means that carers can work slightly more hours without losing their allowance, offering them added financial flexibility to support both their caregiving role and personal needs.

Essentially this means that carer’s will be able to earn more money, while still being entitled to the allowance.

Implications of the increase for carers

The increase in the Carer's Allowance earnings limit holds significant implications for thousands of carers across the UK. By allowing carers to earn up to the equivalent of 16 hours a week at the National Living Wage, this change not only enhances financial support but also promotes a healthier balance between work and caregiving responsibilities. So what are the implications of the changes? We discuss this below:

Increased financial flexibility: With the recent Carer's Allowance news regarding the increased threshold, many carers will find it easier to manage everyday expenses. Having the ability to earn more while still receiving Carer’s Allowance can help cover costs such as transportation, medical supplies, or additional support services for the person being cared for, easing some of the financial pressures that come with caregiving.

Greater employment opportunities: The ability to earn while still receiving Carer’s Allowance enables carers to explore various job opportunities without the fear of losing financial support. This flexibility encourages more carers to remain in or enter the workforce, helping them to develop skills, social connections, and a sense of personal fulfillment outside their caregiving roles.

Reduced stress and isolation: Balancing work and caregiving can lead to feelings of isolation and burnout. The increased earnings limit provides a pathway for carers to engage in work while still being able to meet their caring commitments. This can enhance their wellbeing and create a sense of community, as they connect with others who share similar experiences.

Long-term stability: The government’s commitment to adjust the earnings limit in line with the National Living Wage in the future offers a sense of security for carers. Knowing that their financial support will keep pace with inflation and wage increases allows carers to plan for the future with more confidence.

Eligibility reassessment and how to apply for Carer's Allowance

With the recent Carer’s Allowance news announced by the government, it’s essential for both new and existing carers to reassess their eligibility to ensure they are receiving the financial support they deserve.

Understanding the application process can help facilitate this transition smoothly.

For example, if you are an existing carer and your earnings are limited under the current threshold, it may be worth re-evaluating your situation before the new threshold kicks in next April.

Eligibility reassessment

To qualify for Carer’s Allowance, individuals must meet specific criteria, which include:

1. Care hours: You must provide at least 35 hours of care per week to someone who has substantial care needs. This could be due to a disability, illness, or age-related condition.

2. Age and residency: You need to be at least 16 years old and usually reside in England, Scotland, or Wales.

3. Income limits: With the new changes, you can earn up to the equivalent of 16 hours at the National Living Wage without affecting your eligibility. This change allows more carers to balance work with their caregiving responsibilities while still receiving support.

4. Benefit eligibility: The person you care for must be receiving a qualifying disability benefit, such as Personal Independence Payment (PIP) or Disability Living Allowance (DLA).

It’s important to review these criteria carefully, as your circumstances may have changed with the increase in the earnings limit.

Reporting a change to your circumstances

To report a change in your circumstances, you should visit the government’s website. Before you get started, you will need to have a few bits of information to hand. This includes, your national insurance number, details of the person you are caring for, and more information about your circumstances.

New carers

Becoming a carer for the first time can be a challenging and somewhat daunting process. One of the biggest challenges that first time carer’s face involves uncertainty about how their duties and responsibilities will impact their finances.

This is why it is important to understand what help you may be entitled to. In our blog, ‘How to maintain your job while managing carer work’, we have included a breakdown of the different types of help and assistance you may be entitled to as a carer.

If you are self-funding your own care, you can also check out our blog, which gives you additional tips or information.

On the other hand, if you are a new carer reporting a change in your circumstances, you can visit this government webpage. You will need more information, such as your personal details, national insurance number, P45, course details (if you are studying) and details of expenses.

You will also need the details of the person you are caring for. This includes their date of birth and address, national insurance number, and disability living allowance reference if they are under 16.

The 2023 Carer’s Allowance overpayment controversy

Earlier this year, the government was at the centre of a scandal involving overpayments and significant administrative errors in the administration of the Carer’s Allowance.

Thousands of carers, many of whom were unaware of any discrepancies, found themselves facing unexpected debt due to overpayments flagged by the Department for Work and Pensions (DWP).

This created widespread frustration and financial distress for carers, as the DWP sought to reclaim the funds, sometimes after several years of unnoticed payments.

The issue highlighted ongoing problems in the management of Carer’s Allowance, raising concerns over the DWP’s handling of these claims. Many advocates argued that the complexity of the allowance’s earnings limit and deductions contributed to the overpayments. In response, the government initiated an independent review to investigate the root causes, examining whether the fault lay in claimants' reporting errors, administrative oversight, or both.

This recent Carer’s Allowance news will undoubtedly come as a welcome development and may provide a measure of reassurance and confirmation for thousands of carers across the country. By allowing carers to work more hours without jeopardising their benefits, the new threshold offers a path forward toward better financial security and reduces the risk of inadvertent overpayment.

Looking for a care provider?

On the other hand, if you are searching for a care provider, Autumna has a number of resources that can help.

At the most basic level, we have included our top tips on what qualities you should look for in a care worker.

However, if you are looking for care providers, you can also head over to our online directory and select the type you need. You can then enter your location to be matched with local care providers. Alternatively, you can use our Shortlisting Tool to receive more personalised matches.

Our friendly team of advisors are also on hand to offer additional help and support on 01892 335 330.