DWP earnings rule change coming on Monday means thousands more qualify for £333 monthly benefit

Changes to the Carer's Allowance earnings threshold will come into force from April 7, with 60,000 more people eligible to claim the benefit as a result

A significant change to a DWP benefit will take effect from Monday, April 7, making thousands eligible for an additional £333 per month.

The Carer's Allowance earnings threshold is set to change, as stated by the DWP, allowing 60,000 more individuals to claim the benefit and enabling claimants to earn more before losing their entitlement.

The benefit, a weekly payment of £83, is given to those who care for someone for 35 hours or more a week. Eligibility does not require living with or being related to the person being cared for.

At present, the earnings limit for Carer's Allowance, which determines how much a carer can earn while still claiming the benefit, is £151 per week. If a carer earns more than this amount, they cannot claim the benefit payment for that week.

However, this threshold will increase to £196 per week from Monday, reports the Manchester Evening News, allowing carers to earn up to £45 a week more and still be eligible for the payments.

According to the DWP, the new earning limit while claiming the benefit will enable an additional 60,000 people to receive the weekly payments. From next week, the earnings threshold will rise to the equivalent of 16 hours a week at the National Living Wage.

The government has announced that this change represents the largest increase to the benefit since its introduction in 1976. This means a carer can earn over £10,000 a year while still receiving the weekly payments.

In October 2024, the government initiated an independent review into Carers Allowance overpayments, spearheaded by Liz Sayce OBE. This follows criticism of the Department for Work and Pensions for its 'cliff edge' approach to the benefit, which results in carers losing their entire entitlement if they exceed the weekly limit.

The DWP has faced backlash for demanding thousands in repayments from carers who unknowingly surpassed the earnings threshold, sometimes by a mere £1. The review's findings are anticipated in early summer 2025.

From this month, rates of Carer's Allowance have seen an increase in line with inflation, along with other DWP benefits. Welfare benefit rates, including Personal Independence Payment (PIP) and Universal Credit, are also set to rise this month by nearly 2 per cent.

DWP and HMRC benefit payments are adjusted annually in accordance with the inflation rate from the previous September. In September 2024, the inflation rate was confirmed at 1.7 per cent, as per the consumer price index.

Simultaneously, the State Pension increases by whichever is highest out of inflation, average wage growth between May and July, or 2.5 per cent - a policy known as the triple lock. This year, state pension rates will see a 4.1 per cent increase in line with average earnings growth.

The DWP benefit increase means that from this month, Carer's Allowance will be £83.30 a week, up from £81.90 a week.

Carers UK has expressed mixed feelings about recent government decisions affecting carers. While they appreciate the increase in the earnings threshold for Carer's Allowance, they are worried about the impact of proposed changes to Personal Independence Payments (PIP) unveiled last month.

The charity warns that alterations to PIP, which is crucial for qualifying for Carer's Allowance, could result in 150,000 carers being deprived of financial aid.

Helen Walker, chief executive of Carers UK, commented on the situation: "Unfortunately, we are looking at a game of two halves. Last year in the 2024 Autumn Budget we welcomed news that the limit on Carer's Allowance would rise, which is a much-needed step forward, helping carers in employment on a low income to increase their earning potential.

"We know that the earnings limit is a barrier to taking on more work for carers. Some have cut back hours, switched jobs or even given up work completely. This will make a notable difference to many, but these changes now take place against the concerning backdrop of new welfare reforms announced in the 2025 Spring Statement.

"Carers' benefits are long overdue for reform. We welcome the rise in the earnings limit whilst acknowledging that many carers remain under huge financial pressure, including those who are not able to combine caring with paid work due to the intensity of their caring role. A full review of Carer's Allowance, including the eligibility criteria, is needed urgently to ensure it provides adequate, long-lasting support."