Carer’s Allowance earnings rules stop 2/3 parents working
4 mins read
Tuesday 18 August 2026
Carer’s Allowance earnings rules prevent two thirds of parent carers from taking on more paid work, our new polling shows.
815 parent carers responded to our online poll:
- 36% said they had turned down additional hours or pay because of the Carer’s Allowance earnings limit.
- 31% said they had reduced or stopped work.
- A further 29% were not currently in paid work, and just 4% said the earnings limit had not affected a decision about paid work.
Carer’s Allowance is currently worth £86.45 a week. But carers can lose their entire payment if their earnings go above the weekly earnings limit of £204. This “cliff edge” discourages parent carers from taking on additional hours or increasing their earnings, even when they are able to work more.
One parent told us: “Gradual reduction would be much better than the immediate stop. Going over by a few pound isn’t worth losing the whole Carer’s Allowance.”
Another explained the difficulty of balancing paid work with the changing needs of their disabled child: “My daughter has poor health. When she is well or in school I could work more, and then less other times.”
Make Carer’s Allowance work better for working carers
The findings come as Contact responds to the government’s call for evidence on the future of Carer’s Allowance.
In our response, we are calling for the cliff edge to be replaced by a gradual earnings taper. This would mean Carer’s Allowance reduces gradually as earnings increase rather than disappearing altogether. In a separate indicative poll of 45 parent carers, 84% supported the introduction of an earnings taper.
Our response also calls for a clearer and more predictable system for calculating fluctuating earnings. Parent carers’ ability to work can change significantly depending on their disabled child’s health, whether they are able to attend school, and the availability of suitable care. The current rules make it difficult for families to know whether taking on extra hours will affect their Carer’s Allowance.
In another indicative poll, 70% of 62 respondents proposed averaging earnings over a 16-week period. However, Contact is calling on the government to model different options. It should test these with carers before deciding how a new system should work.
We also want the Department for Work and Pensions (DWP) to make greater use of real-time earnings information to reduce the burden on carers of reporting changes and the risk of overpayments. Parents told us just how difficult the current system can be to navigate. One said: “There is no calculator online either – it’s horrendous to calculate the implications of work, pensions, childcare etc.”
Contact is calling for clear examples and an online calculator. Carers should be able to see in advance how changing their hours or earnings would affect their Carer’s Allowance.
Our key asks
We want the government to use its review of Carer’s Allowance to create a system that gives carers greater financial security and supports those who want to remain in, return to or increase paid work.
We are calling for:
- The current earnings cliff edge to be replaced with a gradual taper, with no carer left worse off.
- A clear and predictable approach to averaging fluctuating earnings.
- Greater use of real-time earnings information to reduce overpayments and the burden on carers.
- Clearer information, worked examples and an online earnings calculator.
- Changes to Carer’s Allowance to work properly alongside Universal Credit, including an increase in the carer element and a dedicated work allowance for carers.
- An increase in the level of Carer’s Allowance to better recognise the financial impact of providing substantial unpaid care.
- The 21-hour study rule to be removed so carers are not forced to choose between education and Carer’s Allowance.
The government has an opportunity to make Carer’s Allowance fairer
Derek Sinclair at Contact, said:
“Parent carers should not have to worry that taking on a few extra hours at work could suddenly leave them without their Carer’s Allowance.
“Our polling shows that this isn’t just a problem with complicated benefit rules. The current cliff edge is affecting real decisions about work. Two thirds of parent carers who responded told us they had turned down extra hours or pay, or reduced or stopped work.
“The government has an opportunity to make Carer’s Allowance simpler, fairer and more supportive of carers who want paid work. Replacing the cliff edge with a gradual taper and making earnings rules more predictable would be an important step forward.”
Read Contact’s full response to the Government’s Carer’s Allowance call for evidence.