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Carers UK calls on Government to increase Carer’s Allowance earnings threshold to stop carers losing out on support

14 March 2016

Carers UK has written to Work and Pensions Minister Justin Tomlinson MP asking him to increase the earnings threshold for those receiving Carer’s Allowance ahead of the rise in the minimum wage this April.

Carers UK has campaigned for many years for the Government to align any rise in the minimum wage with the earnings threshold for Carer’s Allowance in order to prevent carers from losing out on vital support. In our recent submission to the Treasury ahead of the 2016 Budget Carers UK once more asked the Government to act.

The earning threshold for Carer’s Allowance does not automatically rise with the uprating of the minimum wage. As a result, Carers UK frequently hears from carers whose earnings rise suddenly over the weekly Carer’s Allowance earnings threshold by just a few pounds and who are then forced to choose between reducing their hours, giving up work, or losing their benefits.

Carers claiming Working Tax Credit face a particular dilemma, as it is necessary to work for 16 hours to be entitled to it. The earnings threshold is currently £110 a week. Currently, a carer working 16 hours a week on the minimum wage earns £107.20 a week, meaning they are able to claim Carer’s Allowance. From April 2016, due to the rise in the minimum wage, the same person working the same hours will earn £115.20 a week, taking them above the earnings limit and meaning they have the difficult choice of cutting their hours or losing entitlement.

Emily Holzhausen OBE, Director of Policy at Carers UK, said:

“In April thousands of carers claiming Carer’s Allowance will be forced to ask for a cut in their hours or lose vital support from the benefits system.
In particular, those entitled to Working Tax Credit, face a ‘catch 22’ situation where dropping their working hours means they lose entitlement to thousands of pounds in Tax Credit.
Finding a job that fits around caring responsibilities is a difficult enough task in itself - leading carers to ask for fewer hours could mean that they have to give up work all together, something neither carers nor the Government want to see.
While we are pleased the earnings limit ‘cliff edge’ will be addressed under Universal Credit, this is still some years away for carers. We urge the Minister to look urgently at this issue.”

More information on Carer’s Allowance is available here.

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