DWP confirms new Carer’s Allowance threshold from April 2026 | Personal Finance | Finance
The Department for Work and Pensions (DWP) has confirmed that Carer’s Allowance will rise next spring, alongside an increase to the amount carers can earn without affecting their entitlement. From April 2026, weekly payments for Carer’s Allowance will increase from £83.30 to £86.45, reflecting the annual uprating for the 2026/27 financial year. Work and Pensions Secretary Pat McFadden also announced that the Carer’s Allowance earnings threshold will also increase from £196 to £204.
The earnings threshold sets the maximum someone can take home from paid employment each week while still receiving the Carer’s Allowance. Exceeding that limit, even by a small amount, can lead to payments being reduced or stopped, and in some cases has caused carers to unknowingly build up large overpayments.
Carer’s Allowance may also interact with other benefits the claimant or their cared-for person receives, and it becomes taxable if total annual income exceeds the standard £12,570 Personal Allowance, which the Chancellor recently confirmed will remain frozen until April 5, 2031.
The increase follows a significant review into long-running issues around Carer’s Allowance overpayments, the Sayce Review.
Thousands of unpaid carers in England and Wales, around 185,000 who received the benefit between 2015 and September 2025 will have their cases reassessed after it was found that unclear rules and inconsistent guidance had caused many to fall into debt.
Work and Pensions Secretary Pat McFadden, said:”Carers are vital to our communities, and when the system lets them down, we have a duty to put it right.
“The Sayce Review has shown us clearly that the guidance on earnings averaging was confusing. We inherited this mess from the previous government, but we’ve listened to carers, commissioned an independent review, and are now making good for those affected.
“Rebuilding trust isn’t about warm words – it’s about action, accountability, and making sure our support works for the people who need it most.”
Chancellor of the Exchequer Rachel Reeves said: “This will be welcome news for thousands of carers failed by the system under the previous government. We will right these wrongs, carers give so much to their families and to their local communities, and they deserve our support.”
Helen Walker, Chief Executive at Carers UK, also said: “This is the first time that the Carer’s Allowance earnings threshold has risen above £200 a week and is a welcome increase for the many people juggling work and care. The Government’s decision last year to link the earnings threshold to 16 times the National Living Wage gives carers much-needed clarity and means carers do not have to cut back their hours when the National Living Wage increases.
“Despite this increase, Carer’s Allowance remains the lowest benefit of its kind. 62% of carers receiving Carer’s Allowance live in poverty, and 90% of carers do not think the benefit offers sufficient financial support.
“Carers UK continues to call for a full review of Carer’s Allowance, including its eligibility criteria, to ensure the benefit offers carers the sustainable, long-term support they need.”
