Contact calls for increase in Carer’s Allowance earnings limit in budget tomorrow

2 mins read

Tuesday 26 October 2021

According to press reports, the Chancellor is set to use tomorrow’s budget to announce that the National Living Wage (NLW) will increase to £9.50 an hour from April 2022 for workers aged over 23.

While this is good news for some low-paid workers, many unpaid carers are set to lose out unless the Carer’s Allowance earnings limit is increased.

That’s why Contact is calling on the Chancellor to increase the Carer’s Allowance earnings limit to at least £152 per week in the budget tomorrow. 

Our benefits expert Derek Sinclair explains:

“In order to get Carer’s Allowance, your earnings after allowable deductions must be no more than £128 per week.

“If the NLW is increased to £9.50 an hour from April, but the earnings limit remains at £128 per week, any carer working 13.47 hours or more on NLW will lose their Carer’s Allowance. This is because their earnings would then be over £128. On the current rate of NLW, a carer can only work up to 14.36 hours before their earnings get too high to claim Carer’s Allowance.

“We believe the earnings limit should be increased to at least £152 per week. This would mean carers who juggle paid employment alongside caring for sick and disabled people would continue to get Carer’s Allowance and their Working Tax Credit – a benefit that requires someone to be working at least 16 hours a week.

“This small but significant measure would send a positive message to carers that their contribution to the economy (an estimated £132 billion a year – close to the cost of a second NHS) is recognised and valued by government.”

If you’ve lost out on Carer’s Allowance because of previous increases in the NLW, there may be deductions you can make from your earnings.

More information

For advice about Carer’s Allowance, see our Carer’s Allowance webpage or you can ring our helpline free on 0808 808 3555

You can also download our free factsheet on Carer’s Allowance

Want to take action on this?

If you have been affected and would like to speak out about this in the media or in parliament, please email [email protected]  

News story photo credit: HM Treasury on Flickr