How Carer's Allowance Works
Carer's Allowance is the primary benefit for people who look after someone with substantial caring needs. It is not means-tested (your savings don't matter), but it does have a strict "earnings limit."
The "Earnings Limit" Trap
The most common reason for losing Carer's Allowance is the earnings limit. For the 2024/25 tax year, this is £151 a week. Unlike Universal Credit, there is no gradual reduction; if you earn £151.01, you lose all £81.90 of your allowance. However, you can deduct certain expenses like pension contributions and some childcare costs when calculating your earnings.
Qualifying Benefits
The person you care for must be in receipt of one of the following:
- PIP Daily Living Component (either rate)
- Disability Living Allowance (middle or highest care rate)
- Attendance Allowance
- Constant Attendance Allowance
- Armed Forces Independence Payment
