The Department for Work and Pensions (DWP) has initiated a substantial review of Carer's Allowance that could result in major changes to how the benefit operates for hundreds of thousands of unpaid carers. The six-week call for evidence, which launched on July 7, is inviting feedback from carers, charities and organisations on modernising Carer's Allowance for the first time since the DWP introduced it in 1976.
Proposed Changes to Earnings Rules
Amongst the proposals under consideration are replacing the current earnings 'cliff edge' with a taper, enhancing support for carers whose income fluctuates weekly and examining rules that restrict how much paid work carers can undertake while retaining their benefit. Currently, people claiming Carer's Allowance can earn up to £204 weekly after certain deductions while continuing to receive the benefit. Earning above that threshold can result in losing their entitlement. The UK Government raised the weekly earnings limit to a record £204 earlier this year, enabling carers to earn approximately £10,000 annually while continuing to claim Carer's Allowance.
Outdated System and Overpayments
Nevertheless, the DWP says the existing system no longer reflects contemporary working patterns and can create difficulties for carers with variable earnings, leaving some facing unexpected overpayments and debts. The review comes after the independent Sayce Review, which concluded the current earnings rules were outdated and that unclear guidance on fluctuating income had contributed to carers unintentionally accumulating debts.
Minister's Commitment
Minister for Social Security and Disability Sir Stephen Timms said: "Unpaid carers are the backbone of our communities - quietly providing support that makes an enormous difference to the lives of those they love. They deserve a system and level of support that properly reflects the contribution they make, and we are determined to deliver that. This call for evidence is our commitment to going further - and to making sure carers' voices shape every step of what comes next."
Additional Considerations and Debt Reassessment
The DWP is additionally weighing up whether amendments should be made to working hours regulations to better accommodate modern caring commitments. Earlier this year, the Department launched a reassessment of around 200,000 Carer's Allowance cases. Around 25,000 carers are expected to have debts reduced, cancelled or refunded following the exercise. From next week, new legislation will also guarantee that any refunds issued to carers will not impact entitlement to Universal Credit, Pension Credit or Housing Benefit.
Charity Reactions
Emily Holzhausen CBE, Director of Policy and Public Affairs at Carers UK, gave the review a warm welcome. She said: "We need to see further reform to Carer's Allowance because the current system is outdated and no longer reflects the realities of caring today. This includes inflexible rules around the earnings limit which are hard to navigate for carers with fluctuating earnings and can dissuade some from claiming what they are entitled to altogether." Kirsty McHugh, chief executive of Carers Trust, said it was "incredibly encouraging" that the Government had committed to reviewing the benefit. She said the organisation hoped the review would become "a real step change in the way carers are supported".
Consultation Details
The call for evidence concludes on August 18, 2026, with submissions helping to inform future changes to Carer's Allowance. The consultation can be accessed on GOV.UK.
