Carer’s Allowance: DWP studies effects of earnings limit rise to £196 a week

The Department for Work and Pensions (DWP) published a report on 29 October 2026 evaluating the effects of the increase in the Carer’s Allowance earnings limit. In April 2025 the limit rose from £151 to £196 a week, an increase of around 30%. The aim was to let carers do more paid work without losing entitlement to the allowance.

How the research was done

The research was carried out for DWP by Verian. Between 29 January and 8 March 2026, 1,382 survey interviews were conducted with people who had been claiming Carer’s Allowance in March 2025, just before the increase. These were supplemented by 60 in-depth interviews. The findings are based on respondents' own reports.

Carer’s Allowance is for people who spend at least 35 hours a week caring for someone with a disability or health condition. At the time of the research, a carer had to be aged 16 or over, live in England or Wales and earn no more than £196 a week.

Main findings

Some 9% of respondents were in paid work. Their median net earnings were £100 a week, well below the limit. Caring responsibilities were the most common barrier to work, cited by 83% of those not working.

After the increase, 2% of respondents moved into work. Of those who knew about the change, 25% said it played an important role. Among people who were working at both points in time, 17% were working more hours in 2026 than in March 2025. Two-thirds of them (66%), if they were aware of the rise, said it played an important role. The authors say this equates to about 1% of all respondents. The report stresses that the change was transformative for some carers, including for their sense of independence, but it was not widespread.

Knowledge of the limit

Some 85% of respondents knew an earnings limit existed. Only 11% could name the correct figure of £196 unprompted. When shown figures, respondents were more likely to pick the old £151 limit. In addition, 57% thought the limit is calculated on earnings before deductions, while 40% correctly said it applies after deductions.

The interaction between Carer’s Allowance and Universal Credit was often described as complicated. Claimants are responsible for reporting changes separately for each benefit.

Overpayments

Some 6% of respondents had been notified of a Carer’s Allowance overpayment they had to repay. Some 30% said they were worried about receiving one, rising to 39% among those in work. Causes included fluctuating income, backdated pay, bonuses, administrative errors and an assumption that changes reported to Universal Credit would be passed on to Carer’s Allowance.

What this means for you

The report does not concern any one group, but it describes rules that apply to every carer claiming Carer’s Allowance in England or Wales. Anyone combining the allowance with work should know the limit of £196 a week after deductions. Changes in income must be reported separately for each benefit received, for example Carer’s Allowance and Universal Credit.