Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, whether her Department plans to review the structure of the earnings limit for Carer’s Allowance to reduce the risk of significant overpayments resulting from minor threshold breaches.

The weekly earnings limit in Carer’s Allowance (CA) was increased to £196 net earnings in April 2025. This is the largest cash increase ever since CA was introduced in 1976 and the highest percentage increase since 2001. Over 60,000 additional people will be able to receive CA between 2025/26 and 2029/30 as a result. Going forward the earnings limit will be pegged to 16 hours work at National Living Wage (NLW) levels, and in future it will increase when the NLW increases. This will provide more certainty on the hours they can work for those unpaid carers with a job on the NLW.

As my Rt hon friend the member for Leeds West (the Chancellor of the Exchequer) said at the Autumn Budget, we also need to look at the current “cliff edge” earnings rules. A taper, for example, could further incentivise unpaid carers to do some work. It could also reduce the risk of significant overpayments. However, introducing a taper in CA is not without challenges and could significantly complicate the benefit as it currently stands and would mean a major rebuild of the CA computer system. DWP is undertaking some scoping work to see whether an earnings taper in CA might be a feasible option in the longer term. But any taper will be several years away.