DWP Reviews Carer's Allowance to End Earnings Cliff Edge

The Department for Work and Pensions (DWP) is conducting the first major review of Carer's Allowance since 1976 to modernize a system that no longer accommodates contemporary working patterns. The government launched a six-week call for evidence, closing August 18, 2026, to determine if the benefit should be overhauled to better support those combining employment with caring responsibilities.

Central to the review is the proposal to replace the current all-or-nothing earnings limit with a taper. Under existing rules, exceeding the weekly earnings limit results in the total loss of the £86.45 weekly allowance, a "brutal cliff edge" that has led to significant debt for many claimants. To provide immediate relief, the DWP increased the weekly earnings limit to a record £204, allowing carers to earn approximately £10,000 per year while maintaining support.

The initiative follows an independent review by Liz Sayce, which found that one in five claimants combining work and care faced earnings-related overpayments between 2019 and 2024. In response, the DWP is reassessing 200,000 cases from April 2015 to September 2025, with approximately 25,000 carers expected to have debts reduced, cancelled, or refunded. New regulations ensure these reimbursements do not impact other benefit entitlements.

While the review applies to the UK, the Government of Scotland has already replaced the allowance with the Carer Support Payment. Advocacy groups including Carers UK and Carers Trust have welcomed the review, though they maintain that current rules remain too inflexible for those with fluctuating incomes.