Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment he has made of the potential merits of increasing the weekly earning limits for Carers Allowance.

Many carers who are receiving Carer’s Allowance are also in households receiving Universal Credit, whose structure of tapers and work allowances (where applicable) effectively takes precedence over the earnings rules in Carer’s Allowance for these carers. This helps ensure that, if they wish to work, carers on the lowest incomes are better off doing so. There is, however, no requirement for those caring for 35 hours or more a week to undertake work search whilst receiving Universal Credit. In work or out of work, these carers may also receive the Universal Credit Carer Element, worth around an additional £2,000 a year.

Some carers may not be able to receive Universal Credit, for example due to their levels of household capital or income. These carers may only be receiving Carer’s Allowance. This is not means-tested and not based on National Insurance contributions. It has an earnings limit which permits carers to undertake some part-time work if they are able to do so. This recognises the benefits of staying in touch with the workplace, including greater financial independence and social interaction.

We know that some carers who are above Universal Credit thresholds are keen to maintain contact with the labour market, so we want to encourage carers in this position to combine some paid work with their caring duties wherever possible. That is why we regularly increase the earnings limit when it is warranted and affordable. The Carer’s Allowance earnings limit is currently £132 a week. Subject to Parliamentary approval, this will increase to £139 a week from April 2023. This will mean that the earnings limit will have increased by over one third since 2010.

It should be noted that Carer’s Allowance is devolved to the Scottish Parliament. While the Scottish Government builds its capacity to replace it with Scottish Carer’s Assistance, DWP Ministers have agreed that DWP will administer Carer’s Allowance on behalf of the Scottish Ministers under an agency agreement. For as long as that agreement is in place, the Scottish Ministers need to ensure that Carer’s Allowance rules and rates in Scotland maintains legislative parity with Carer’s Allowance in England and Wales.