The Department for Work and Pensions (DWP) has officially announced a significant change to the rules governing Carer's Allowance, with a new weekly earnings threshold set to take effect.
What Are The New Carer's Allowance Figures?
The weekly earnings limit for claimants will rise to £204, while the benefit payment itself will increase to £86.45 per week. This adjustment, confirmed on 15 January 2026, is designed to reflect changes in the cost of living but comes with a crucial warning from financial specialists.
Experts are urging the hundreds of thousands of working carers across the UK to closely monitor their income. A pay rise, an extra shift, a promotion, or even a change in job could inadvertently push earnings over the new limit, resulting in a sudden loss of entitlement to the vital support.
Why Weekly Monitoring Is Essential
Robert King, a household tax specialist at Nannywage Ltd, highlighted a common pitfall for claimants. "The rise to a £204 weekly earnings limit sounds straightforward," he said, "but the problem is that Carer’s Allowance is still assessed week by week."
He explained that as carers' earnings approach the limit, even a modest increase can trigger a loss of the benefit if not watched carefully. "One of the biggest risks is assuming monthly pay is what matters when entitlement is actually based on weekly earnings," King stressed.
Carers who are paid every four weeks or who receive variable overtime must be particularly vigilant, breaking their income down into weekly amounts to ensure compliance.
Tax Implications And Proactive Steps
Another critical point is that Carer's Allowance is a taxable benefit. The new, higher weekly rate of £86.45 must be included in overall income planning. Carers earning more under the revised threshold should check if tax is being collected automatically through their PAYE tax code or if they need to account for it separately, for instance via a Self Assessment tax return.
To navigate the changes safely, Robert King advises a proactive approach: "The safest approach for carers is to track weekly earnings alongside Carer's Allowance, keep payslips and flag any pay changes early." This method allows carers to utilise the higher £204 limit fully without the risk of an unexpected cessation of support.
To be eligible for Carer's Allowance, individuals must provide care for at least 35 hours per week to someone who receives a qualifying disability benefit. With these new rules in place, staying informed and organised is more crucial than ever for those juggling care responsibilities with employment.
