From Monday, April 7, 2025, a major update to Carer’s Allowance by the Department for Work and Pensions (DWP) will allow 60,000 more people to claim the benefit. Thanks to the new earnings threshold, people who care for others will be able to earn more without losing their benefit.
This change is being welcomed as the biggest improvement in the Carer’s Allowance scheme since it started in 1976.
What Is Carer’s Allowance?
Carer’s Allowance is a weekly payment of £83.30 given to people who spend at least 35 hours a week looking after someone who needs care due to illness or disability.
You don’t have to be related to or live with the person you care for to qualify.
What’s Changing from April 7?
Before April 7, carers could only earn up to £151 per week. If they earned more than that, even by £1, they would lose the full benefit for that week.
From April 7, the earnings limit increases to £196 per week. That’s a boost of £45 a week, or about £333 a month, allowing carers to earn more without losing the benefit.
This new threshold is based on 16 hours of work per week at the National Living Wage.
How This Helps Carers
With the new rule, many unpaid carers can now:
- Take on a few more hours of paid work without penalty.
- Earn over £10,000 annually and still receive Carer’s Allowance.
- Avoid repayment demands from DWP due to small earnings mistakes.
- The change is expected to make a big difference, especially for low-income carers trying to balance work and caring duties.
Why Was the Old Rule Problematic?
The DWP has been criticised for its strict ‘cliff edge’ policy, where carers lost their full allowance even if they earned just slightly over the limit.
In some cases, the DWP asked carers to repay thousands of pounds in backdated overpayments—sometimes caused by unintentional errors.
Due to this, an independent review of the system began in October 2025, led by Liz Sayce OBE, and the findings are expected in summer 2025.
Other DWP Benefits Are Also Increasing
From April, several other benefits have gone up in line with inflation, which was 1.7% in September 2025. These include:
- Universal Credit
- Personal Independence Payment (PIP)
- Carer’s Allowance, now £83.30 (previously £81.90)
- Meanwhile, the State Pension has gone up by 4.1%, as per the triple lock rule (the highest of wage growth, inflation, or 2.5%).
Concerns Over PIP Changes
While the Carer’s Allowance news is positive, charity Carers UK is worried about new PIP reforms announced in the 2025 Spring Statement.
Since PIP is a gateway benefit, any changes to it could affect Carer’s Allowance eligibility. Carers UK says up to 150,000 people may lose support if PIP rules change.
Helen Walker, CEO of Carers UK, said:
“We welcome the higher earnings limit—it will help many carers. But we’re concerned that changes to PIP could cancel out these gains for thousands.”
She also called for a full review of Carer’s Allowance, including eligibility rules, to ensure fair and lasting support for carers.
The new earnings limit for Carer’s Allowance is a big step forward, giving more freedom to thousands of unpaid carers. While the change is a relief for many, ongoing welfare reforms and the future of PIP raise valid concerns.
With more and more people providing unpaid care, the system must evolve to give them the financial and emotional support they need.
FAQ’s
How much is Carer’s Allowance from April 2025?
It has increased to £83.30 per week, up from £81.90, in line with inflation.
What is the new earnings threshold for Carer’s Allowance?
From April 7, 2025, carers can earn up to £196 per week without losing their allowance.
Who is eligible for Carer’s Allowance?
You must care for someone for at least 35 hours a week, earn under the limit, and the person cared for must get a qualifying disability benefit.
Why is the change to the earnings limit important?
It helps carers keep their allowance even if they work slightly more hours or earn a bit extra. It also prevents repayment problems.
Could PIP changes affect Carer’s Allowance?
Yes. Since PIP is a gateway benefit, changes to it could cause 150,000 carers to lose their Carer’s Allowance, according to Carers UK.
