To ask the Secretary of State for Work and Pensions, (a) what assessment she has made of the potential merits for increasing the earnings limit for Carer’s Allowance, and (b) for what reason the earnings limit for Carer’s Allowance did not increase in line with CPI in April 2021.
17 June 2021
Carer’s Allowance has an earnings limit which permits carers to undertake some part-time work if they are able to do so. We know that some carers are keen to maintain contact with the labour market to benefit from greater financial independence and social interaction, so we want to encourage carers to combine some paid work with their caring duties wherever possible.
The Carer’s Allowance earnings limit is not linked to the number of hours worked or the level of “minimum wage” payments. There is no statutory requirement to review the earnings limit each year or to link it to some other factor. A number of factors are taken into account when looking at the Carer’s Allowance earnings limit to decide whether an increase is warranted and affordable, including changes to wages and work incentives and the position of the public finances.
The earnings limit has increased by nearly a third since 2010 (from £100 to £128 net earnings per week), reflecting an increase in average earnings in recent years. These increases have helped ensure that the earnings limit has maintained its value. The earnings limit did not rise in April 2021 because it wasn’t considered appropriate to increase it due to the uncertainty of the economic climate and the impact on earnings growth.
The department has been undertaking research which will touch on carers employment and potential barriers to them working. We will look at the findings from the research and other evidence and arguments with an open mind, and would consider changes to the way the earnings limit is calculated if they were deemed to be necessary and affordable.