In a significant policy shift, the Department for Work and Pensions (DWP) has announced that from April 2025, unpaid carers in the UK will be allowed to earn up to £196 per week without affecting their Carer’s Allowance. This represents a £45 increase to the previous threshold of £151—marking the largest single rise ever for this benefit.
This policy change is especially timely, given the persistent rise in living costs and the increasing reliance on unpaid carers to support individuals with long-term illnesses and disabilities. The new limit offers greater financial flexibility for carers who also work part-time, helping them sustain both their caregiving duties and supplementary income.
Summary of Key Changes: April 2025 Carer’s Allowance Update
| Category | Details |
|---|---|
| Policy Update | Weekly earnings threshold increased |
| New Weekly Limit (April 2025) | £196 |
| Previous Weekly Limit | £151 |
| Carer’s Allowance Weekly Rate | £81.90 (as of 2025) |
| Eligible Care Hours | Minimum 35 hours/week |
| Expected Additional Beneficiaries | Over 60,000 by 2029/2030 |
| Administering Body | Department for Work and Pensions (DWP) |
| Related Initiative | Independent review of past overpayments |
What Is Carer’s Allowance and Why It Matters
Carer’s Allowance is a benefit provided to individuals who offer unpaid care for someone requiring substantial support due to disability or illness. As of 2025, this allowance stands at £81.90 per week and serves as recognition of the vital role these carers play in maintaining the well-being of others.
To qualify, a carer must dedicate at least 35 hours weekly to their responsibilities. Until now, exceeding the earnings threshold often meant disqualification from the allowance—placing many in difficult financial positions. The 2025 adjustment is a long-overdue correction aimed at reducing such dilemmas.
Why This Increase Is a Game-Changer
This isn’t just a routine update. It reflects the government’s broader acknowledgment of unpaid carers as an essential part of the healthcare ecosystem. According to DWP Minister Andrew Western, the £45 rise is the most substantial cash-based increase in the scheme’s history.
By enabling carers to earn more while still qualifying for benefits, the government encourages workforce participation without penalizing individuals for doing the right thing. It also reduces the need to choose between caring for a loved one and working an extra shift.
Spotlight on Overpayment Issues and the New Independent Review
In tandem with the new earnings limit, the DWP has launched an independent review into historical overpayments. These occurred when carers unknowingly earned slightly above the limit and were later hit with repayment demands. The review, led by Liz Sayce OBE, will investigate the root causes of such overpayments and recommend better preventative measures.
This review, expected to conclude by summer 2025, is gathering insights from carers and advocacy groups to ensure solutions are grounded in real-life experiences.
Flexible Repayment Plans for Past Overpayments
Acknowledging past hardships, the DWP is now offering more flexible repayment options to those who were overpaid. This includes people who:
- Were unaware that small pay increases disqualified them
- Left their caring roles but didn’t update the DWP
- Encountered administrative errors
Text reminders have also been introduced, urging carers to promptly report changes in income to avoid future complications.
Updated Eligibility Criteria for 2025
To be eligible for Carer’s Allowance starting April 2025, applicants must:
- Provide a minimum of 35 hours of care per week
- Earn below £196 per week (after tax and NI deductions)
- Be caring for someone receiving a qualifying disability benefit
- Not be enrolled in full-time education
- Not be subject to immigration restrictions barring access to public funds
The increased threshold broadens access for many part-time workers who previously fell just outside the eligibility net.
What Carers Should Do Before April 2025
As April approaches, unpaid carers are encouraged to:
- Use the Carer’s Allowance Calculator on GOV.UK to verify eligibility
- Monitor their earnings to remain within the new £196 limit
- Update their employment or care details with DWP as needed
- Follow official updates for the latest policy news
Accurate reporting remains key to avoiding overpayments and maintaining uninterrupted support.
Conclusion
The April 2025 increase in the Carer’s Allowance earnings threshold is a much-needed win for unpaid carers across the UK. It not only improves financial stability but also sends a clear message: their work matters. With ongoing efforts to address past overpayments and improve communication, the system is slowly becoming more responsive to the realities carers face daily.
FAQs
What is the new Carer’s Allowance earnings limit for 2025?
From April 2025, carers can earn up to £196 per week (after tax and NI) without losing their Carer’s Allowance.
Who qualifies for Carer’s Allowance?
You must care for someone at least 35 hours a week, earn under £196 weekly, and meet additional eligibility criteria including caring for someone receiving a qualifying disability benefit.
What happens if I earn over the new threshold?
Earning over £196 per week may disqualify you from receiving Carer’s Allowance. It’s crucial to monitor your earnings and report any changes to the DWP.
Will overpayment repayment rules change?
Yes, the DWP is introducing more flexible repayment options and is also reviewing past overpayment cases to ensure fair treatment.
When will the independent review be published?
The findings from the review into Carer’s Allowance overpayments are expected by summer 2025.
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