If you’re someone who spends a big part of your day caring for a loved one due to illness or disability, there’s some welcome news. Starting Monday, July 7, 2025, the UK government has updated the Carer’s Allowance rules—offering real financial relief to thousands of unpaid carers.
This is being called the biggest improvement in the Carer’s Allowance scheme since it began in 1976, and it’s expected to help more than 60,000 new people qualify for the benefit.
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Carer’s Allowance
Carer’s Allowance is a weekly benefit paid by the Department for Work and Pensions (DWP) to people who spend at least 35 hours a week caring for someone with a long-term illness, disability, or mental health condition.
The current payment rate is £83.30 per week. You don’t need to live with the person or be related to them. As long as they receive a qualifying disability benefit (like PIP or Attendance Allowance), and you meet the income and eligibility criteria, you could qualify.
The Old Rule
Before April 6, 2025, if you worked while claiming Carer’s Allowance, you were only allowed to earn up to £151 per week. Go even £1 over, and you’d lose your entire Carer’s Allowance for that week.
This “cliff edge” rule was extremely stressful for carers. Many turned down extra work just to avoid crossing the threshold. Some even had to repay large sums after unknowingly breaching the limit by small amounts.
The New Rule
Starting April 7, 2025, the earnings limit has increased to £196 per week. That’s £45 more each week—or nearly £180 a month.
The new limit is based on 16 hours of work per week at the National Living Wage, allowing part-time workers more flexibility. Now carers can work extra hours, take on shifts, or even accept a small pay rise without risking their benefits.
Why It Matters
Take Sophie, for example—a 45-year-old carer who looks after her father with Parkinson’s. She works part-time earning around £150 per week. Before, she turned down shifts to avoid crossing the £151 threshold.
But with the new £196 cap, she can pick up extra work. Over the year, this could mean more than £2,300 in extra take-home income—without losing her Carer’s Allowance.
This change offers peace of mind and better financial planning for carers who juggle work and care responsibilities.
Who Benefits
This update supports many low-income and part-time working carers, especially:
- Parents of children with disabilities
- Adults caring for elderly relatives
- Spouses supporting partners with health issues
The DWP estimates that around 60,000 more people may now be eligible due to this change alone.
Why the Old System Failed
The old earnings limit caused problems for years. Carers often found themselves penalised for small, honest mistakes—like working an extra hour or receiving a holiday bonus. Many were hit with overpayment notices and forced to repay thousands.
An independent review of the Carer’s Allowance system began in October 2025, led by Liz Sayce OBE. Its findings, expected by summer 2025, may bring more improvements.
Other Benefit Updates
This Carer’s Allowance boost is part of a wider update to benefits in 2025:
- Universal Credit has gone up
- Personal Independence Payment (PIP) has increased
- Carer’s Allowance rose to £83.30 per week (from £81.90)
- State Pension increased by 4.1%, thanks to the triple lock policy
These changes aim to keep pace with inflation, which was at 1.7% in September 2025.
Concerns About PIP
Despite the good news, charities like Carers UK are concerned about proposed changes to PIP. Since PIP is a gateway benefit for Carer’s Allowance, any changes could affect a carer’s eligibility.
Some estimates suggest that up to 150,000 carers could lose their benefits if these reforms go ahead.
What Carers UK Says
Helen Walker, CEO of Carers UK, welcomed the increased earnings limit but raised concerns about other threats to carer support.
“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 said.
She called for a complete review of the Carer’s Allowance system to ensure carers are treated fairly and consistently.
Final Thoughts
This change to Carer’s Allowance is a meaningful win for unpaid carers across the UK. The higher earnings limit gives carers more flexibility to support themselves financially without fear of losing crucial benefits.
Still, with PIP reforms looming, the road ahead remains uncertain for many. If you’re a carer, now is the time to check your eligibility under the new rules and see if you can earn more while still receiving Carer’s Allowance.
FAQs
What is the new Carer’s earnings limit?
It increased to £196 per week from £151 in April 2025.
Do I lose benefits if I go over £196?
Yes, you may lose Carer’s Allowance for that week.
How much is Carer’s Allowance now?
It’s £83.30 per week as of 2025.
Can carers work and claim allowance?
Yes, if earnings are below the £196 weekly limit.
Is Carer’s Allowance affected by PIP changes?
Yes, if the person loses PIP, carers may lose support too.
