Unpaid UK carers who have part-time jobs will be forced to reduce their working hours for the fourth consecutive year as the earnings threshold for receiving Carer’s Allowance fails to keep pace with the National Living Wage.

Carer’s Allowance is set to rise with inflation to £76.25 in April 2023. The earnings threshold for claiming the allowance will increase by 5.5% to £139 per week.

However, the National Living Wage is also due to rise at far higher rates – by 9.7% to £10.42 per hour in April 2023.

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This means that the number of hours unpaid carers will be able to work receiving the National Living Wage, while also claiming Carer’s Allowance, will decrease from 13 hours 53 minutes at present to 13 hours 20 minutes in April 2023.

Over the last four years, the number of hours carers have been able to work alongside receiving Carer’s Allowance has shrunk from just under 15 hours a week in 2019 to roughly 13 hours and 20 minutes from next April 2023. This represents a loss of 1 hour 40 minutes a week. Over a year this amounts to a loss of 12 days of paid work.

The low earnings threshold is forcing carers to work fewer hours in order to keep claiming Carer’s Allowance. Currently, the benefit has no taper and is not pegged to the National Living Wage. Carers UK is calling for the earnings threshold to be raised to at least 21 hours per week and for increases to be set in legislation to automatically rise along with increases to the National Living Wage.

Helen Walker, chief executive of Carers UK, said: “While we welcome the Carer’s Allowance earnings limit going up in April, the 5.5% rise does not match the 9.7% rise in the National Living Wage, meaning the reality for many unpaid carers is that they have no choice but to work less at a time when many need to work more.

“With more than a million labour market vacancies, the government should be maximising opportunities for carers to work alongside caring, but the punitive earnings limit stops them from being able to do so. Carers need a solution to the sharp cliff edge of the Carer’s Allowance earnings threshold that currently means earning even £1 over the threshold sees a 100% loss of benefit.

“This move does not do nearly enough to help unpaid carers make ends meet during a difficult cost-of-living crisis.

“The DWP has carried out research on Carer’s Allowance and the earnings limit and we urge them to publish it as soon as possible so that the design of this benefit can be improved for carers.”

Alongside campaigning to increase the level of the earnings limit, Carers UK’s recent research has highlighted the additional costs and financial stress carers are faced with, as well as the challenges of Carer’s Allowance being the lowest benefit of its kind. Carers UK is calling for additional urgent help for carers over the winter to help them manage, as well as a longer-term review of Carer’s Allowance to modernise and improve it.

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