Carer's Allowance is currently £327.60 every 4 weeks for people who care for someone for at least 35 hours per week. Around £2.34 p/hour.
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The national minimum wage for people over 21 is £11.44 p/hour which would be around £400 per week. Carers Allowance is a taxable benefit and is counted as income for other benefits like Universal Credit.
A recent study has shown that unpaid carers in England and Wales contribute £445 million to the economy every day – that’s £162 billion per year. The study says that the value of unpaid care is equivalent to a second NHS in England and Wales. Despite this, carers receive Carers Allowance which amounts to £4,258.80 per year. Because it is taxable, it is effectively treated as a wage when claiming other benefits, which many carers have to do to survive.
Tuesday 11th March 2025
Carer’s Allowance provides some financial recognition that an unpaid carer may not be able to work full-time. It is part of a range of support based on individual needs, rather than a wage.
This Government fully recognises the invaluable contribution that unpaid and family carers make in providing significant care and continuity of support to their loved ones. Unpaid carers play a vital role in the lives of their family and friends. We acknowledge the challenges they are facing, and we are determined to provide unpaid carers with the support they need and deserve. That is why we are expecting to spend around £4.2 billion this year to support them through Carer's Allowance.
Unpaid carers are overwhelmingly caring for a family member or friend, rather than someone unknown to them. The amount of unpaid caring they undertake, and its intensity, will differ from carer to carer, as will their reasons and motivation for accepting caring responsibilities. Many can successfully combine caring with some employment, so will continue to have income from paid employment. Those unpaid carers who do need financial support may be able to get help from the benefits system – and not only from Carer’s Allowance, but from a range of means-tested benefits as well.
It is important to emphasise that Carer’s Allowance is not intended to be a replacement for a wage nor payment for the services of caring and is therefore not comparable with either the National Minimum Wage or the National Living Wage. The principal purpose of Carer's Allowance is to provide a measure of financial support and recognition for people who are not able to work full time because of their caring responsibilities. It is not, and was never intended to be, a carer's wage or a payment for the services of caring. It is also not intended to replace lost or forgone earnings in their entirety and this Government has no plans to change that principle. Instead, successive Governments have supported carers through allowances and benefits as well as wider cross-government actions.
A National Insurance Class 1 credit is generally awarded for each week that Carer’s Allowance is paid to a working-age carer. Class 1 credits can help towards the conditions of entitlement to all contributory benefits, as well as the new State Pension. Receipt of Carer’s Allowance also exempts the carer from the benefit cap.
Carer’s Allowance permits carers to undertake some part-time work if they are able to do so, without this affecting their entitlement. The earnings limit recognises the benefits of staying in touch with the workplace, including greater financial independence and social interaction. From April 2025 the Carer’s Allowance Earnings limit will increase from £151 to £196 per week, the biggest increase in the limit ever, net of allowable expenses, this is pegged at 16 hours National Living Wage and will increase as the National Living Wage increases.
Carers on low incomes can claim income-related benefits, such as Universal Credit, alongside Carer’s Allowance. These benefits can be paid to carers at a higher rate than those without caring responsibilities through the carer element and the additional amount for carers respectively. Currently, the Universal Credit carer element is £198.31 per monthly assessment period. The additional amount for carers in Pension Credit is £45.60 a week. Around 880,000 (May 2024 data) carer households on Universal Credit can receive around an additional £2,400 a year through the Carer Element. The Government has chosen to focus extra support on those carers who need it most.
The Government will pay around £4.2 billion in Carer’s Allowance in 2024/2025. By 2028/29, the Government is forecast to spend just over £4.9 billion a year on Carer’s Allowance.
Department for Work and Pensions