Has the Carer’s Allowance earnings limit changed — and what does it mean for you?

What is Carer’s Allowance and who is it for?

Carer’s Allowance is a weekly government benefit for people who regularly provide substantial, unpaid care. It is one of the most commonly unclaimed benefits in the UK — millions of people who qualify have never applied, often because they do not think of themselves as “carers”. If you help a partner, parent, sibling, or friend manage daily life because of illness, disability, or age-related frailty, you may well qualify.

You do not need to live with the person you care for, and they do not need to be related to you. The money is paid directly to you as the carer — not to the person receiving care. You need to be 16 or over, not in full-time education, and providing care for at least 35 hours a week.

What changed in April 2026?

Two important changes came into effect from 6 April 2026:

• The weekly rate rose to £86.45 — up from £83.30, as part of the annual uprating of benefits in line with September’s inflation figure.
• The earnings limit rose to £204 a week — up from £196. This is the maximum you can earn from paid work (after certain deductions) and still receive the allowance.

The second change is arguably the more significant. The government also announced that from 2026 onwards, the earnings limit will be permanently linked to 16 hours at the National Living Wage. This means it should rise automatically each year as the minimum wage increases — a long-standing ask from carer organisations, who had argued for years that the old fixed limit forced people into impossible choices between working and caring.

How is the earnings limit actually calculated?

The £204 figure refers to your net earnings — not your gross pay. Before comparing your income to the limit, you are allowed to deduct:

• Income Tax and National Insurance contributions
• Half of any pension contributions you pay into a workplace or personal pension
• Certain allowable expenses if you are self-employed
• The cost of paying someone else to care for the person you support (or for a child), if that care enables you to work

This means your gross pay could be noticeably higher than £204 and you could still qualify. For example, if you earn £250 a week gross but pay £30 in National Insurance and £25 into a pension, your assessable earnings would fall to around £207.50 — close enough that further deductions could bring you under the threshold. It is worth working through the full calculation, or asking a free benefits adviser to do it with you.

One important warning: the earnings limit operates as a hard “cliff edge”. If your net earnings are £203.99 you receive the full £86.45 a week. If they are £204.01, you receive nothing — there is no gradual reduction. This makes it especially important to track your earnings carefully, particularly if your hours vary from week to week.

Are there any tax implications to be aware of?

Yes — and this is something many carers overlook. Carer’s Allowance counts as taxable income. If you also receive earnings from work, a private pension, or other taxable income, Carer’s Allowance adds around £4,500 a year to your total — which could tip you above your personal tax allowance of £12,570.

If you are employed, HMRC will normally adjust your tax code automatically. If you are self-employed or have multiple income sources, you may need to declare Carer’s Allowance on a Self Assessment tax return. If you are unsure whether it affects your tax position, Citizens Advice offers free, impartial help and can walk you through the numbers.

What other support can carers claim alongside Carer’s Allowance?

Claiming Carer’s Allowance can unlock access to additional support that many people never hear about:

• Carer’s Credit — if you earn above the threshold or do not qualify for Carer’s Allowance for other reasons, Carer’s Credit protects your National Insurance record so that years spent caring do not create gaps in your State Pension entitlement.
• Pension Credit carer addition — if the person you care for receives Attendance Allowance, the daily living component of PIP, or the care component of DLA, and you receive Carer’s Allowance, you may qualify for an extra £45.60 a week added to your Pension Credit. This alone can make a significant difference to a household income.
• Council Tax discount — some local councils offer a reduction for unpaid carers. Rules vary between areas, so contact your local council to ask.
• A free carer’s assessment — under the Care Act 2014, you have a legal right to ask your local council for a carer’s assessment. This is separate from any financial benefit and can lead to practical support: respite breaks, equipment, help at home, or just someone to talk to about your situation.

How do you apply for Carer’s Allowance?

You can apply online at gov.uk/carers-allowance or by calling the Carer’s Allowance Unit on 0800 731 0297 (free from landlines and most mobiles, Monday to Friday). Before you apply, it helps to have:

• Your National Insurance number
• The National Insurance number of the person you care for
• Details of your earnings (payslips or recent bank statements)
• The reference number for any disability benefit the cared-for person receives (Attendance Allowance, PIP, or DLA)

You can also claim Carer’s Allowance backdated for up to three months if you were eligible during that time. If you have been caring for someone for a while and never claimed, it is always worth checking — you may be owed money.