Carer's Allowance

Increasing the Carer's Allowance earnings threshold in line with National Living Wage (NLW)

In order to get Carer's Allowance your earnings after allowable deductions must be no more than £128 per week. This means parents working more than 14 hours on the National Living Wage will find that their wages are over the Carer's Allowance earnings limit - unless they have deductions that can be made from their earnings.

A parent in this position may be tempted to cut their hours so their earnings do not increase. However, depending on your circumstances, cutting your hours could mean you no longer qualify for Working Tax Credit. This is particularly likely if you are a lone parent.

If you are a working parent with a three-four year old, dropping your hours will also mean that you will no longer qualify for an extra 15 hours free childcare.

Advice if you are affected

If you think this will affect you, get advice urgently. There may be deductions that can be made from your earnings to help you retain your Carer's Allowance payments without having to cut your hours.

It's important to be aware that when calculating how much you earn, the Carer's Allowance Unit deduct certain expenses from your earnings. This includes:

  • Some alternative care costs - for example paying someone to look after your children whilst you are at work. There is no need for the caring to be done by a registered childcare provider. Costs can be deducted so long as you pay someone other than a close relative. However there is a cap on the maximum amount that can be deducted for care costs.
  • Half of any contributions that you make into a work or personal pension.

What we want

  • The Carer's Allowance earnings limit to be increased in line with future rises to the NLW.

What you can do

If you have been affected by this issue, please email Una.summerson@contact.org.uk or call 020 7608 8742.

What we're doing

  • We ask you to sign a letter to the Minster for Disabled People calling for an increase in the Carer's Allowance earnings threshold in line with the NLW.
  • With the 2,433 signature we wrote to government about the issue and met with DWP offficials.