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Carers UK responds to changes to Carer's Allowance Earnings Rule

23 November 2018

Department for Work and Pensions minister Justin Tomlinson has today laid a Written Ministerial Statement in the House of Commons on changes to social security benefit and pension up-ratings in April 2019. As part of the Statement the Government also announced it is making a change to the Carer’s Allowance Earnings Rule.

Responding to the Written Ministerial Statement, Emily Holzhausen OBE, Director of Policy and Public Affairs at Carers UK said:

“We’re pleased to see the Government has increased the earnings threshold for Carer’s Allowance by £3.00 to £123 per week, meaning more unpaid carers who choose to work and care can continue to do so while receiving much needed financial support for caring.

“However, come April 2019 this increase will be problematic for some carers working set hours, with those working over 14 hours on the National Living Wage likely to become ineligible for Carer’s Allowance. Currently, carers on the National Living Wage are able to work 15 hours before reaching the earnings threshold.

“Carers UK has long called for the earnings threshold to be linked to National Living Wage at 16 hours a week which remains an important part of the benefits system, allowing eligibility to other benefits like Tax Credits. The Work and Pensions Select Committee has also recommended that these are aligned and we urge the Government again to at least increase and link the earnings rule to 16 hours at the National Living Wage.

“Although we’re pleased to see Carer’s Allowance rise with inflation to £66.15 per week, we’d like to see a much bigger increase in this benefit. Carer’s Allowance was recently increased in line with Jobseeker’s Allowance in Scotland, and we continue to call on the Government to increase it in the rest of the UK through our Fairer for Carers campaign.

“Although Carer’s Allowance and disability benefits continue to rise with inflation, many other benefits which carers on low incomes and their families rely on continue to be frozen. It can’t be right that so many people who make such an enormous contribution to our economy and society continue to face financial hardship.”

 

Go to our Fairer for Carers page for information on Carers UK's campaign to increase Carer's Allowance for all carers in the UK.

Background to the announcement:

If you are in paid work (including self-employment) you cannot get Carer’s Allowance if you earn more than £120 (2018/19) rising to £123 (rising to 2019/20) a week (after deductions).

The earnings threshold was last increased in April 2017 to £120. The rise in the National Living Wage in April 2017 meant that those working more than 15 hours a week at minimum wage and eligible for the new national living wage were over the £120 earnings limit, (unless any of the deductions were made).

In April 2019 National Living Wage will increase to £8.21per hour. This means that carers working more than 14 hours at the National Living Wage will be over the earnings threshold unless deductions have been made.

Carers UK has consistently called for the Government to ensure that the earnings threshold increases in line with the National Living Wage and National Minimum Wage to ensure that carers are able to work for at least 16 hours without losing entitlement. Working for 16 hours entitles some carers to Tax Credits.

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