What does the budget announcement mean for carers?
In the Autumn Budget 2024, the Chancellor, Rachel Reeves MP, confirmed carers working and claiming Carer’s Allowance can now take on additional hours to earn up to £196 per week from April 2025, or over £10,000 a year.
We welcome what is the biggest increase to the earnings limit since the introduction of Carer’s Allowance. Carers in receipt of Carer’s Allowance will be able to work up to 16 hours every week at National Living Wage from April 2025.
Starting in April, the National Living Wage will increase to £12.21 per hour. This change means that carers will see an extra £45 each week, which adds up to an annual total of £2,340. They will still be eligible for the Carer’s Allowance as well. From April 2025, the new earnings limit will be set at £196 per week, allowing carers to earn up to £10,192 per year.
This is the first adjustment to the National Living Wage in decades, and it aims to address the concerns many have about having to reduce their working hours due to wage increases. We hope this brings some peace of mind to carers and helps them maintain their livelihoods.
Key facts
Earnings limit in Carer’s Allowance
- Current: £151 per week
- From April 2025: £196 per week
Number of hours those receiving Carer’s Allowance can work if they earn National Living Wage
- Current: 13.2 hours a week
- After April 2025: 16 hours a week
Carers in poverty
Support through Carer's Allowance is crucial for those who cannot manage both work and care. However, it remains the lowest benefit of its kind, at only £81.90 per week. Many carers are facing financial struggles due to high living costs and significant inflation. Currently, 1.2 million carers in the UK are living in poverty and urgently need help.
DHSC funding on social care
The Government is supporting local authorities with at least £600 million of new grant funding for social care.
Household Support Fund
The Household Support will l be extended for 2025-26 as a lifeline for lower income families needing additional support. Unpaid carers are mentioned in the Household Support Fund guidance as one of the groups able to access assistance through the Fund.
Winter Fuel Payment
The Pension Credit Standard Minimum Guarantee will increase by 4.1% from April 2025. This will mean that more of the poorest pensioners will become eligible to receive Pension Credit and therefore the Winter Fuel Payment.
Unfortunately, there are no mitigations for unpaid carers missing out on Winter Fuel Payments this winter, which will affect carers without support for rising heating costs.
Department of Education
Department for Education will receive £6.7bn, a 19% real-terms increase. That includes £1.4bn to rebuild schools in the greatest need. The schools budget will increase by £2.3bn to support the hiring of teachers. There will be £2.1bn for school maintenance, a £300m increase. This investment should positively impact young carers and carers in education.
* Source: Carers UK Autumn Briefing
Helen Walker, Chief Executive at Carers UK, said:
“It’s fantastic to hear that the Government will increase the earnings threshold for Carer’s Allowance allowing 60,000 more carers juggling work and care to access this benefit. It’s the largest increase in the earnings limit for Carer’s Allowance since it was introduced in 1976.
“Carers working and claiming Carer’s Allowance can now take on additional hours to earn up to £196 per week from April 2025, or over £10,000 a year. This is a vital poverty prevention measure helping many carers, particularly women, stay in the labour market. It will make a noticeable difference for many, and for the first time in decades, carers will not lose out as the National Living Wage rises. It will help to put much needed cash into the pockets of working carers who do so much to look after their disabled, ill and older relatives.
“Many carers are still struggling with their finances whilst providing so much for society. In addition to today’s announcement, we need to see a full review of Carer’s Allowance as the lowest benefit of its kind at only £81.90 per week for providing a minimum of 35 hours of care. 45% of carers receiving Carer’s Allowance are struggling to make ends meet and urgent steps must be taken to further tackle poverty for carers and their families.”