Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment her Department has made of the potential impact of (a) the carer's allowance earnings cap on people looking to accept a wider range of employment and (b) her Department's policy of immediately terminating that benefit in the event that someone breaches the income cap through (i) receipt of a tax rebate and (ii) other genuine means.

The Carer’s Allowance weekly earnings limit is designed to allow carers to combine their caring responsibilities with some paid employment where they can. It is set at a level that aims to encourage those who give up full time work in order to undertake caring responsibilities, to maintain a link with the labour market through part time work.

The £132 limit, which has increased by around a third since 2010, is a net figure which is the figure left once any Income Tax, National Insurance contributions and other allowable payments and expenses are deducted from met earnings. So some people can earn more than £132 a week gross and still retain Carer’s Allowance.

When calculating earnings for Carer’s Allowance purposes, any amount by way of a refund of income tax is disregarded.

Once earnings exceed £132 a week (or on a weekly average where possible for those with fluctuating earnings) then there is no longer an entitlement to Carer’s Allowance and it will cease.