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Autumn Budget 2024: Carers set to earn £45 a week more without losing the benefit – but there's no change to the cliff-edge

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Molly Greeves
Molly Greeves
News & Investigations Reporter
30 October 2024

If you're an unpaid carer, you'll soon be able to earn £45 more a week without losing your entitlement to Carer's Allowance. The move has been announced by the Chancellor Rachel Reeves in today's Autumn Budget. From 7 April 2025, the earnings limit for carers will rise from £151 to £196 – but earn a penny over this and you'll still see the entire benefit clawed back.

MSE's Autumn Budget 2024 coverage

Check out all of our other MSE News stories following the Chancellor's announcements:

This is the largest increase to the earnings limit since Carer's Allowance was introduced in 1976, and will see 60,000 more carers become eligible for the benefit, according to the Government.

It has also been confirmed that the weekly amount paid in Carer's Allowance will rise from £81.90 to £83.29, an increase of 1.7%, from 6 April 2025. This is based on September's figure for the Consumer Prices Index (CPI) measure of inflation.

Ms Reeves added that she was "concerned" about an issue known as the Carer's Allowance 'cliff-edge'. Unlike most other benefits, Carer’s Allowance doesn't taper off if you go over the threshold. Instead, if you go just a penny over, you lose your whole entitlement. Worse still, the disconnectedness of the benefits system has allowed people to go over and still be paid the benefit – with these overpayments later being clawed back.

This is something we've been campaigning to change, though Ms Reeves only reiterated that a Government review had been launched on the issue earlier this month. This will look at how and why overpayments happened, changes to minimise the future risk, and how the Department for Work and Pensions can best support those affected.

Martin Lewis: 'The cliff-edge is perverse and needs to end'

In his live Budget tweets, MoneySavingExpert.com founder Martin Lewis, said: "She [Ms Reeves] also crucially says she is 'concerned about the cliff-edge and overpayments' so no change on that yet, but they are investigating it."

Earlier this year, Martin called for an end to this "perverse" system in his letter to the Chancellor. Here's an extract:

Martin Lewis
Martin Lewis
MSE founder & chair

Unpaid carers are unsung national heroes who save the economy and the NHS billions and provide a national wellbeing boost. Carer's Allowance is a not particularly generous benefit that those on very low incomes, who care for people in need for over 35 hours a week, can get.

Yet its structure is broken, old-fashioned, unjust and in need of urgent change. Earn £151 a week or less, and those eligible can claim the £81.90 per week allowance. Yet, earn a penny more – £151.01 – and they get nothing. This is perverse – most benefits, including Universal Credit, have a taper, so if you go over the threshold, the payment received is gradually reduced. Carer's Allowance only has a cliff-edge, leaving many to plummet off.

Worse, the system seemingly sets people up to slip over the threshold unwittingly. Many on Carer's Allowance need to restrict any working hours to avoid hitting it (a strange disincentive to work), yet if their wage increases slightly, eg, when the annual minimum wage increases, they can fractionally bust the threshold. If that happens, the terrible disconnectedness and poor benefits systems mean they're often still paid the allowance for months, or even years. Then, even though they may have only earned a pound or two more, they're later asked for unaffordable £100s or £1,000s back.

I'd ask you to look at ending the cliff-edge going forward, and retrospectively for those carers who are facing requests for crippling back-payments – adding to the burden many are already faced with. The system is fundamentally unjust, and hits many of society's most venerable and vulnerable.

Claiming Carer's Allowance? Check you're under the earnings limit

If you receive Carer's Allowance, check your earnings NOW to make sure you're not over the limit, which is currently £151. This is especially important if your earnings fluctuate or you've received a pay rise. The longer you receive the benefit when you're not entitled to it, the more you might end up having to pay back.

For step-by-step instructions on how to check your earnings and report changes, see our recent Carer's Allowance news story.

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Carer's Allowance earnings limit to rise by £45

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