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Carers UK response to earnings limit rise

Carers UK has welcomed a rise in the earnings limit, but says carers are still being “trapped” by benefits rule.

Carers UK has welcomed the Government announcement that from April 2018 the earnings threshold for Carer’s Allowance will be raised to £120 a week as any increase can make some difference.  However, this still falls short of what is needed for those who need to work 16 hours in order to access other financial help from Government.

Each year, with the uprating of the National Living Wage, Carers UK hears from carers whose earnings rise over the earnings threshold by just a matter of pence and who are forced to choose between giving up work, reducing their hours or losing their benefits.

The earnings limit is currently £116 per week after deductions and will rise to £120 after deductions from April 2018.   If the carer earns even one pence over this rate after deductions they lose 100% of their main benefit, Carer’s Allowance, which will be worth £64.60 from next April 2018. While Carer’s Allowance is the lowest benefit of its kind, it can help offset the extra costs of caring and the huge loss of earnings that many carers face.

For some carers, they need to work a minimum of 16 hours a week in order to access tax credits.   However, with the welcome rise in the National Living Wage rising to £7.83, this will take them over £5 per week over the limit and many carers again face the impossible situation of either cutting their working hours or losing thousands of pounds a year in financial support from Carer’s Allowance.

Emily Holzhausen OBE, Director of Policy and Public Affairs, said:

“Carers UK is pleased by the increase in the earnings threshold, which will allow carers to benefit from modest wage increases. However, this still falls around £5 short of what is needed for carers to retain working tax credits. Carers make a huge contribution to our society and many are forced to reduce their working hours or leave work altogether to care around the clock for older, disabled or seriously ill loved ones. For carers who are able to combine caring with a few hours of low paid work, the earnings limit has caused serious problems.”

Carers often find it difficult to find jobs with the right number of hours that they are able to fit around their caring responsibilities, often turning down extra hours or promotion because they face losing essential support from Carer’s Allowance. Carers also receiving Working Tax Credit are often hit the hardest. If they cut their working hours in order to stay under the Carer’s Allowance earnings limit, they would instead lose thousands of pounds in tax credits.

Carers UK is also urging the Government to put in place a long-term solution so that this conflict does not arise again in the future. It is an opportunity for Government to include this change in the cross-Government Carers Action Plan which will be published in the New Year.

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