Carer’s Allowance is a vital financial support for unpaid carers in the UK, helping those who provide significant care to family members or friends with disabilities or long-term health conditions.
In 2025, there are important updates to the Carer’s Allowance scheme, including an increase in both the payment amount and the earnings limit. This article outlines the new Carer’s Allowance rates for 2025, details on who qualifies, and how these changes impact carers across the UK.
What Is Carer’s Allowance?
Carer’s Allowance is a government benefit designed to support individuals who dedicate a substantial amount of time—typically at least 35 hours a week—to caring for someone with a severe disability, illness, or frailty. It is a taxable benefit that recognises the commitment of unpaid carers by providing weekly financial assistance to help with the costs and sacrifices involved.
This allowance can be claimed regardless of whether the carer is related to the person cared for, and the person receiving care must be in receipt of qualifying disability benefits such as Personal Independence Payment (PIP), Disability Living Allowance (DLA), or Attendance Allowance.
Key Changes to Carer’s Allowance in 2025
The year 2025 brings positive news for carers as the government has announced a payment increase and a higher earnings threshold, reflecting the rising cost of living and acknowledging the importance of flexibility for working carers.
Payment Increase
From 7 April 2025, the weekly Carer’s Allowance payment will rise from £81.90 to £83.30, a 1.7% increase aligned with inflation. This equates to an annual amount of approximately £4,331.60.
Increased Earnings Limit
More significantly, the earnings limit for those claiming Carer’s Allowance will see the largest rise since the benefit’s inception in 1976. The threshold will increase from £151 per week to £196 per week (after allowable deductions), enabling carers to earn an additional £45 per week or around £2,340 more per year while still qualifying for the allowance. This increase allows many low-income working carers greater financial stability without losing their Carer’s Allowance entitlement.
| Aspect | Previous 2024 Limit | New 2025 Limit |
|---|---|---|
| Weekly Carer’s Allowance | £81.90 | £83.30 |
| Weekly Earnings Threshold | £151 | £196 |
| Annual Carer’s Allowance | £4,269.60 | £4,331.60 |
| Annual Earnings Threshold | £7,852 | £10,192 |
Who Qualifies for Carer’s Allowance in 2025?
To qualify for Carer’s Allowance, you must meet the following criteria as of 2025:
- Be aged 16 or over.
- Provide at least 35 hours of unpaid care per week for one person.
- The person you care for must receive a qualifying disability benefit such as:
- Personal Independence Payment (PIP) daily living component,
- Disability Living Allowance (DLA) at the middle or highest care rate, or
- Attendance Allowance.
- Earn no more than £196 per week after specific deductions (previously £151).
- Not be in full-time education (studying less than 21 hours per week).
- Usually live in England, Scotland, or Wales for at least two of the last three years.
- Not be subject to immigration control.
It is important to note that the earnings limit applies to net earnings after deductions including tax, National Insurance contributions, 50% of pension contributions, and certain allowable work-related expenses (such as travel costs between workplaces, specialist clothing, or necessary work equipment). Childcare or care costs may also be deductible up to 50% of earnings if the carer pays for care services (excluding care provided by close family members).
How Does the Earnings Limit Work?
The earnings limit of £196 per week means carers can earn up to that amount after deductions and still receive Carer’s Allowance. This is particularly beneficial for carers who balance employment with their caring responsibilities.
Allowable deductions from gross earnings include:
- Income tax and National Insurance contributions.
- Half of pension contributions (occupational or personal).
- Work-related expenses like specialist clothing or travel costs between workplaces.
- Business costs for self-employed carers related exclusively to their work.
For example, if a carer’s gross pay is £220 but after deducting £30 for tax, £10 for pension, and £5 for work-related expenses, the net earnings would be £175, making them eligible to claim Carer’s Allowance.
Impact on Other Benefits
While Carer’s Allowance provides essential income, it is a taxable benefit and may affect other benefits received by the carer or the person cared for. For instance, it could reduce Universal Credit entitlement or certain means-tested benefits. Nonetheless, some carers may be eligible for a Carer’s Premium or additional elements within Universal Credit.
The payment cannot be received concurrently with State Pension, but if the carer’s State Pension is less than the Carer’s Allowance weekly rate, they can receive a top-up.
How to Apply for Carer’s Allowance?
Claiming Carer’s Allowance is straightforward and can be done online through the official government service. Applicants will need:
- Their National Insurance number.
- Details about their caring responsibilities and the person they care for.
- Information regarding earnings and employment.
Applications can also be backdated up to three months if eligible. It is advisable for carers to apply promptly once they meet eligibility criteria.
Summary of 2025 Carer’s Allowance Key Facts
| Feature | Details |
|---|---|
| Weekly Payment | £83.30 (from April 2025) |
| Earnings Limit | £196 per week (net, from April 2025) |
| Weekly Minimum Care Hours | 35 hours |
| Age Requirement | 16 or older |
| Qualifying Benefits | PIP, DLA, or Attendance Allowance |
| Payment Frequency | Weekly or every 4 weeks |
| Impact on Other Benefits | May reduce some means-tested benefits |
Frequently Asked Questions (FAQs)
1. Can I claim Carer’s Allowance if I am also working part-time?
Yes. With the earnings limit increase in 2025, you can earn up to £196 per week after deductions and still receive Carer’s Allowance.
2. How many hours of care do I need to provide to qualify?
You must provide at least 35 hours of unpaid care per week for one person.
3. Will Carer’s Allowance affect my other benefits?
It may affect some benefits like Universal Credit, but you may also qualify for a Carer’s Premium or other support. It’s best to check how your benefits are impacted.
4. Is Carer’s Allowance taxable?
Yes, Carer’s Allowance is considered taxable income.
5. Can I claim Carer’s Allowance for more than one person?
No. You can only receive one Carer’s Allowance payment even if you care for more than one qualifying person.
