Big Changes for Carers Announced in the 2024 UK Budget: Higher Earnings Limit for Carer's Allowance and New Support Measures

The recent budget announcement by the Chancellor, Rt Hon Rachel Reeves MP, brought some significant changes for carers across the UK. Starting in April 2025, working carers will have a higher earnings limit, enabling them to earn more while still receiving Carer's Allowance, along with additional support initiatives aimed at easing financial burdens.

1. Carer's Allowance Earnings Limit Increase: A Major Milestone

In a historic move, the earnings limit for Carer's Allowance will increase from £151 to £196 per week, in line with the rising National Living Wage, which will be £12.21 per hour in 2025. This update allows carers to earn more while retaining their Carer's Allowance benefits, providing an annual increase in allowable earnings by over £2,300. For the first time in nearly five decades, the earnings threshold will align with wage increases, removing the need for carers to reduce working hours to remain eligible.

This change is expected to benefit 60,000 additional carers, enabling them to stay in the workforce while fulfilling their caregiving responsibilities and providing essential financial support.

2. Carers in Poverty: The Continuing Need for Support

Despite these positive developments, many carers continue to face financial challenges. Carer's Allowance remains the lowest benefit of its kind, at just £81.90 per week for those providing at least 35 hours of care. With over a million carers across the UK living in poverty, additional steps are necessary to address these issues, including a proposed full review of Carer’s Allowance and other support programs.

Helen Walker, CEO of Carers UK, has urged the government to further address these challenges, stating that nearly half of carers receiving the allowance struggle to meet basic expenses, highlighting the urgency of continued reforms.

3. Additional Government Support for Carers and Households

To further assist carers and other low-income families, the government will extend the Household Support Fund through 2025-26. This fund provides crucial help with essential costs such as food and utilities, especially important for unpaid carers who may face heightened living expenses.

The government has also announced a £600 million grant for local authorities to bolster social care services, an area critical to the well-being of carers and the individuals they support. However, Carers UK advocates for a long-term solution, urging the government to introduce a comprehensive plan to sustainably support NHS and social care services.

4. Winter Fuel Payment and Pension Credit Update

Although pensioners receiving Pension Credit will see an increase in the Winter Fuel Payment due to a 4.1% rise in the Pension Credit Standard Minimum Guarantee, there was disappointment over the lack of specific winter heating support for unpaid carers. Carers UK has called attention to the additional costs faced by carers during the colder months and the need for tailored support.

Final Thoughts

The budget brings positive news for working carers, particularly those balancing paid work and caregiving. With the increased earnings threshold, 60,000 more carers can receive Carer’s Allowance, making it easier to remain in the workforce. While this change will ease financial pressures, the need for further reforms in support and services for carers remains crucial.