The Government has opened a six-week call for evidence on reforming Carer’s Allowance, raising questions over how the benefit system supports people balancing paid work with unpaid caring responsibilities.
The Department for Work and Pensions said the evidence call, launched on 7 July, will examine how to modernise the earnings limit, reduce the impact of the current cliff edge, improve predictability for carers with varying incomes, and better support people managing both work and care.
The review follows the Sayce Review, which found that unclear guidance on averaging fluctuating earnings had left some carers building up debts without realising. It also found that the earnings limit had failed to keep pace with modern working patterns.
The Government has already increased the weekly earnings limit to £204 and said carers can now earn around £10,000 a year while retaining support. The new call for evidence will examine whether to introduce an earnings taper and whether to change rules that cap how many hours a carer can work before losing the benefit.
The evidence call is open to carers, people with care needs, carers’ organisations, and others with experience of the system. It will close on 18 August 2026 and will inform future changes to Carer’s Allowance.
Sir Stephen Timms, Minister for Social Security and Disability, said: “Unpaid carers are the backbone of our communities — quietly providing support that makes an enormous difference to the lives of those they love.
“They deserve a system and level of support that properly reflects the contribution they make, and we are determined to deliver that.
“This call for evidence is our commitment to going further — and to making sure carers’ voices shape every step of what comes next.”
The DWP said it has also launched a reassessment exercise covering 200,000 cases, with around 25,000 cases expected to see debts reduced, cancelled, or refunded. New capital disregard regulations coming into force next week will ensure those refunds do not affect entitlement to Universal Credit, Pension Credit, or Housing Benefit.
Emily Holzhausen CBE, Director of Policy and Public Affairs at Carers UK, said: “We need to see further reform to Carer’s Allowance because the current system is outdated and no longer reflects the realities of caring today. This includes inflexible rules around the earnings limit which are hard to navigate for carers with fluctuating earnings and can dissuade some from claiming what they are entitled to altogether.
“We welcome the government’s call to gather further evidence around this and its acknowledgement that Carer’s Allowance, which was first introduced 50 years ago, should be a priority for change to better support those who contribute so much to society. Caring is not a one-size-fits-all experience, and so it’s important that the government hears from as many people as possible on this topic in the next six weeks.”
The review extends a live policy debate over how caring responsibilities intersect with employment rights, benefits, and workforce participation. The Government is already consulting on new carers’ rights and employment reform, including possible paid carer’s leave and return-to-work protections.
The benefit review is separate from workplace leave reform, but the two are closely connected. Many carers do not move cleanly between full employment and no employment. They may work variable hours, reduce hours temporarily, take irregular shifts, or pause work during a crisis before returning. A rigid earnings cliff edge can make that movement harder to manage, especially where pay fluctuates from week to week.
Caring responsibilities are becoming a structural workforce issue. An ageing population, pressure on health and social care services, and longer working lives mean more employees will have care commitments during mid-career and senior-career stages. The loss of experienced staff creates recruitment costs, knowledge gaps, and management disruption, particularly in roles where replacement is difficult.
The current debate also reflects a wider reassessment of income security. Employment law changes, predictable-hours proposals, tipping rules, and discussions around carers’ leave all point towards a labour market in which volatility is being challenged more directly. The Carer’s Allowance review adds welfare design to that same agenda.
A taper could reduce the risk that carers lose support abruptly after small changes in income. It could also make extra hours more viable where carers are able to work but cannot commit to predictable full-time employment. The administrative design will be critical. A taper that is difficult to understand or report could simply replace one problem with another.
Predictability is equally important. Workers with fluctuating hours, variable pay periods, overtime, bonuses, or seasonal employment can struggle to know whether they will breach earnings rules. That uncertainty can discourage people from taking work, accepting shifts, or progressing in employment, even where they would otherwise be able to do so.
Payroll systems, advisers, and support organisations will need clear rules if reforms proceed. Any change will need guidance on gross earnings, deductions, averaging, overpayments, and reporting responsibilities. Without that clarity, carers may continue to face debt risk and employers may struggle to support staff who are trying to remain in work.
The policy choice is not only about the level of benefit. It is about whether the system recognises the reality of modern work and care. The Government’s evidence call gives carers, employers, advisers, and support organisations a chance to shape that design before changes are proposed.
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