Budget 2026: what are the changes to carer’s allowance and how could they affect you?

Caring for a loved one can be rewarding, but it can also be demanding, emotionally, physically and financially.

If you’re looking after a family member or friend, you may be juggling caring responsibilities with work, household bills and your own day-to-day needs.

The good news is, changes to carer’s allowance are planned to make the system fairer for unpaid carers.

Here’s what you need to know about who qualifies as a carer, the financial support available and how the proposed changes could make a difference to your finances.

What’s a carer?

A carer is someone who provides unpaid care and support to a family member or friend who has a disability, illness, mental health condition, addiction, or who needs extra help as they get older.

They provide this support without being paid to do so. This is different from someone employed to provide care or someone who volunteers in a formal role.

You don’t have to provide care around the clock to be a carer. Even if you’re balancing a job, family life and other commitments, the support you give could still count.

What financial support could you receive?

If you’re caring for someone, you may be entitled to financial assistance, benefits or other forms of support.

One option is carer’s allowance, which may be available if you spend 35 or more hours a week caring for  someone who receives certain disability benefits and you meet the other eligibility conditions.

But, the rules can be complicated, particularly if you work alongside your caring responsibilities.

That’s why it’s worth checking what you could claim rather than assuming you won’t qualify.

What’s changing?

One of the biggest concerns for unpaid carers has been the strict earnings limit attached to carer’s allowance.

This has created what is often called a ‘cliff edge’. You might work an extra shift or receive a small pay rise, only to find that you lose your allowance altogether.

Under the current rules, if you receive carer’s allowance and your earnings go even slightly over the permitted weekly limit, currently £204, you can lose your entire week’s carer’s allowance payment, currently £86.45.

Going over by just a few pence could have serious financial consequences. A carer who earned a penny over the limit for a year would breach it by 52p but would be asked to repay £4,495.40.

For people already balancing work with caring for someone they love, that can be a particularly difficult position to be in.

A fairer approach

The government has announced plans to replace this cliff-edge system with a tapered approach.

Instead of losing your entire carer’s allowance because you earn slightly too much, your payment would gradually reduce as your earnings rise above the permitted limit.

Under the proposed approach, your allowance would reduce by £1 for every additional £1 you earn above the limit.

What could this mean for you?

• More flexibility: you could have more scope to take on extra hours or accept a pay rise without automatically losing all your support.
• Less worry: going slightly over the earnings limit would no longer trigger the same sudden loss of your allowance under the proposed system.
• Greater financial security: a gradual reduction could help make it easier to balance paid work with caring responsibilities.

The changes are intended to address a long-standing problem for unpaid carers, many of whom face the difficult challenge of making ends meet while supporting someone who depends on them.

Have you been overpaid carer’s allowance?

If you’ve received an overpayment of carer’s allowance, you may be worried about how you’re going to pay the money back.

If you’re finding it difficult to repay what you owe, speak to us. We can look at what you owe and help you work out what you can afford.

Not sure what benefits you could claim?

You could be missing out on valuable financial support simply because you don’t realise you’re eligible.

Try our benefits calculator to check whether you're receiving everything you're entitled to.