UK Increases Carer's Allowance Limit and Launches System Review

The Department for Work and Pensions increased the weekly earnings limit for Carer's Allowance claimants to a record £204, allowing unpaid carers to earn approximately £10,000 annually while retaining benefit support. This policy change, implemented by the Labour Party government, coincides with a six-week call for evidence launched on July 7, 2026, to modernize the allowance system for the first time since 1976.

Minister for Social Security and Disability Sir Stephen Timms stated that unpaid carers deserve a system that properly reflects their contributions. The ongoing review seeks to address outdated rules, including the earnings cliff edge, which the government proposes replacing with a taper to better accommodate modern working patterns and fluctuating incomes.

Following the independent Sayce Review, the department is also reassessing 200,000 cases. This process is expected to reduce or write off debts for approximately 25,000 carers. New regulations starting the week of July 13 ensure these reimbursements do not impact entitlements for Housing Benefit, Pension Credit, or Universal Credit.

Charities including Carers UK and Carers Trust welcomed the updates. However, Carers UK emphasized that the current system remains inflexible for those with inconsistent earnings, noting that these rules can dissuade some carers from claiming entitled benefits. The consultation period concludes on August 18, 2026.