The Department for Work and Pensions (DWP) has initiated a substantial review of Carer's Allowance that could result in major alterations to how the benefit operates for hundreds of thousands of unpaid carers. The six-week call for evidence, which commenced on July 7, is inviting feedback from carers, charities and organisations on how to modernise Carer's Allowance for the first time since its introduction by the DWP in 1976.
Key Proposals Under Consideration
Among the suggestions under consideration are replacing the existing earnings 'cliff edge' with a taper, enhancing support for carers whose income fluctuates from week to week 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. Should they earn above that threshold, they risk losing their entitlement. The UK Government raised the weekly earnings threshold to a record £204 earlier this year, enabling carers to earn approximately £10,000 annually while continuing to claim Carer's Allowance, reports the Daily Record.
Why the Rules Are Outdated
The DWP states that the existing system no longer accommodates modern working patterns and can generate difficulties for carers with variable earnings, leaving some facing unanticipated overpayments and debts. The review follows the independent Sayce Review, which determined the current earnings rules were outdated and that ambiguous guidance on fluctuating income had contributed to carers inadvertently accumulating debts.
Minister's Statement
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 Changes and Reassessments
The DWP is also examining whether amendments should be made to the regulations surrounding working hours to better reflect contemporary caring duties. Earlier this year, the Department initiated a reassessment of approximately 200,000 Carer's Allowance cases. Roughly 25,000 carers are anticipated to have debts reduced, written off or reimbursed following the exercise. From next week, new regulations will also guarantee that any reimbursements made to carers will not impact entitlement to Universal Credit, Pension Credit or Housing Benefit.
Reactions from Charities
Emily Holzhausen CBE, Director of Policy and Public Affairs at Carers UK, welcomed the review. 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".
The call for evidence closes on August 18, 2026, and the responses will help shape future reforms to Carer's Allowance. The consultation can be accessed on GOV.UK.
