The Department for Work and Pensions (DWP) has launched a major review of Carer’s Allowance that could lead to significant changes to how the benefit works for hundreds of thousands of unpaid carers
The Department for Work and Pensions ( DWP ) has launched a comprehensive review of Carer’s Allowance that could result in substantial changes 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 input from carers, charities and organisations on how to modernise Carer’s Allowance for the first time since the DWP introduced it in 1976.
Amongst the proposals under consideration are substituting the existing earnings ‘cliff edge’ with a taper system, enhancing support for carers whose income fluctuates week to week and examining rules that restrict how much paid employment carers can undertake while retaining their benefit.
Currently, individuals claiming Carer’s Allowance can earn up to £204 weekly after certain deductions while continuing to receive the benefit. Should they earn beyond that threshold, they risk 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, reports the Daily Record.
Nevertheless, the DWP states the existing system no longer mirrors contemporary working patterns and can create difficulties for carers with variable earnings, leaving some facing unexpected overpayments and debts.
The review follows the independent Sayce Review, which determined the current earnings rules were outdated and that unclear guidance on fluctuating income had contributed to carers inadvertently accumulating debts.
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.”
The DWP is also examining whether amendments should be made to regulations surrounding working hours to better accommodate 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 as a result of the exercise.
From next week, new regulations will also guarantee that any reimbursements made to carers will not impact eligibility for Universal Credit, Pension Credit or Housing Benefit.
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, described the Government’s commitment to reviewing the benefit as “incredibly encouraging”.
She said the organisation hoped the review would represent “a real step change in the way carers are supported”. The call for evidence closes on August 18, 2026, with responses helping to inform future reforms to Carer’s Allowance.
The consultation can be accessed on GOV. UK.

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