Home News & views Carer’s allowance earnings limit to increase to £123 per week from April 2019
Tuesday 27 November 2018
Carer’s Allowance is the main benefit for carers. You can still get it even if you are working, so long as your earnings are no more than a weekly amount known as ‘the earnings limit’. The government has announced that the earnings limit will be going up to £123 per week from April 2019.
While this should be good news for carers in low paid work, many of those on the National Living Wage (NLW) will not benefit. This is because the NLW is also increasing to £8.21 per hour. So, if you work 16 hours on the NLW your earnings will be £131.36 per week – preventing you from getting Carer’s Allowance.
Let’s look at an example.
Fatima is a lone parent with a severely disabled child. She works 16 hours a week and earns the NLW. In April her weekly earnings will increase to £131.36 per week. However, because her new wages will be £8.36 above the earnings limit, she won’t get any Carer’s Allowance.
Fatima may be tempted to cut her hours to 14 per week so that her earnings are below £123 per week. However, depending on her circumstances, cutting her hours to below 16 a week could mean she no longer qualifies for working tax credit.
This issue will affect many working parents, and it’s particularly likely to affect you if you are a lone parent like Fatima.
Dropping hours to less than 16 hours can also mean that a working parent loses access to an extra 15 hours free childcare for a three or four year old.
We believe the earnings limit should be at least £131.36 to reflect the increase in the NLW. This would prevent working carers from having to choose between losing their Carer’s Allowance or losing their working tax credit.
Derek Sinclair, Contact’s benefits expert, said:
“While it’s good news that the earnings threshold for Carer’s Allowance is increasing, Contact is very disappointed that this isn’t increasing in line with the National Living Wage”
“Parents juggling part-time work with caring for their disabled child shouldn’t be forced to choose between losing their Carer’s Allowance or their working tax credit.
“We have repeatedly raised this issue with the government and thousands of parents had previously signed an open letter asking that the earnings limit be increased in line with the National Living Wage (NLW). The Work and Pensions Select Committee has also called on the government to align the earnings limit with the NLW and it’s very frustrating that this has not yet happened.”
We will continue to campaign on this issue, so please get in touch if you have been affected by emailing email@example.com
It is important to know that certain costs can be deducted from your earnings to help you qualify for Carer’s Allowance without having to cut your hours. This includes:
So for example, if Fatima was paying £18 per week into a pension scheme, she can deduct £9 per week from her earnings. This means that although her actual earnings are £131.36 she will be treated as having earnings of £122.36 per week, allowing her to keep her Carer’s Allowance.
Contact our freephone helpline for advice about Carer’s Allowance, or see our Carer’s Allowance webpage.
You can also download our free factsheet on Carer’s Allowance
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