The Department for Work and Pensions (DWP) has made changes to its benefits overhaul to prevent a sudden loss of income for 150,000 carers. The adjustments offer carers some time to adapt to the upcoming cuts in benefits.
Transition Period for Carers
Carers will now have around three months to adjust to the changes that affect their Carer’s Allowance, which is given to individuals who care for a family member, friend, or neighbour with a disability.
This is part of the DWP’s broader changes under the new Universal Credit and Personal Independence Payment (PIP) Bill, which includes tighter eligibility requirements for PIP and a freeze on the incapacity payment added to Universal Credit.
As a result of these changes, some individuals may no longer qualify for Carer’s Allowance. To be eligible, carers must provide a minimum of 35 hours of care weekly to someone receiving PIP’s daily living element or a similar benefit. If a claimant loses their PIP under the new eligibility criteria, someone else will not be able to claim Carer’s Allowance for them.
Double Impact on Some Households
The new legislation could also create a double income loss for certain households. Disabled couples or relatives receiving PIP may currently claim Carer’s Allowance for each other if they have different disabilities. However, if one person loses their PIP entitlement, their carer could no longer claim the allowance.
In families where multiple people claim Carer’s Allowance for taking care of a parent or sibling, the change could affect various household members. Importantly, the allowance cannot be claimed for the same individual by multiple carers.
DWP Projections and Transitional Period
DWP projections indicate that by 2029/2030, 150,000 carers will lose their eligibility for Carer’s Allowance. This includes an expected 10,000 carers losing their allowance in 2026/2027, when the PIP eligibility changes take effect in November 2026.
However, in response to concerns, the DWP has introduced a 13-week transitional period for those who lose their allowance. During this time, carers will continue to receive Carer’s Allowance for an additional 13 weeks, providing them time to adjust their finances, access employment support, and explore alternative income sources to mitigate the loss.
Carer’s Allowance in Numbers
Currently, more than one million people in the UK claim Carer’s Allowance, with 30,177 of them living in Birmingham, the highest number in any local authority area.
The weekly Carer’s Allowance rate is £83.30, totaling £333.20 every four weeks. If the claimant is also receiving Universal Credit, this allowance is offset by a deduction of approximately £360.97 per month.
However, there is no financial benefit in receiving both Carer’s Allowance and Universal Credit. The Universal Credit Carer’s Element, worth £201.68 per month, can help offset the loss, but if the Carer’s Allowance is removed, the recipient will also lose eligibility for the Carer’s Element.
Impact of Losing Carer’s Allowance
Losing Carer’s Allowance or the Universal Credit Carer’s Element will also result in no exemption from the benefit cap, which could further impact the household’s finances. According to DWP projections, the overall impact of these changes will be small, but still significant for those affected.
The DWP’s revisions to its benefits reforms aim to provide carers with a fair adjustment period. By introducing a 13-week transitional period, the government seeks to alleviate the financial strain on those who will lose their entitlement to Carer’s Allowance.
However, these changes still represent a significant shift, especially for families with multiple carers or individuals who rely on PIP benefits.
FAQs
How long will carers have to adjust after losing their Carer’s Allowance?
Carers will have a 13-week transitional period to adjust to the loss of their Carer’s Allowance, during which time they will continue to receive the allowance.
What happens if a person loses their PIP benefit?
If a person loses their PIP benefit, their carer will no longer be eligible to claim Carer’s Allowance for them, affecting the household’s income.
How much is Carer’s Allowance worth?
Carer’s Allowance is calculated at £83.30 per week, totaling £333.20 every four weeks. If the person also receives Universal Credit, this may be offset by a deduction of approximately £360.97 per month.