- In 2026/27 you can get Carer's Allowance of £86.45 a week if your earnings are £204 or less a week after tax, National Insurance and expenses.12
- Expenses you can take off include half of your pension contributions, and some care costs while you are at work, up to 50% of your earnings.1
- It is a cliff edge: earn over £204 in a week and you get no Carer's Allowance for that week, not a reduced amount.6
- Savings do not count. Carer's Allowance is not means-tested, so money in the bank does not affect it.5
What counts towards the £204 limit?
The limit is about earnings from a job or from self-employment. Start with your gross pay, then take off:1
| Income Tax and National Insurance | Taken off |
| Pension contributions | Half taken off |
| Equipment you need for the job, and travel between workplaces your employer doesn't pay | Taken off |
| Care costs while you work (not paid to a close relative) | Up to 50% of earnings |
| Business costs (self-employed) | Taken off |
Care costs means paying someone to look after the person you care for, or your children, while you are at work. They only count if that person is not your spouse or partner, parent, child or sibling.1
If your earnings go up and down, DWP can average them over a period instead of looking at each week on its own. After the Sayce review found that unclear guidance on averaging had left carers with overpayments, DWP updated that guidance.6
Worked example: earning just over the limit
Priya works part time and earns £230 a week before deductions. Over a year that is £11,960, below the £12,570 Personal Allowance, and £230 a week is below the £242 a week point where employee National Insurance starts, so nothing is deducted for tax or National Insurance.10 She pays £12 a week into her workplace pension.
| Gross earnings a week | £230.00 |
| Less half of £12 pension contribution | -£6.00 |
| Earnings for Carer's Allowance | £224.00 |
| Over the £204 limit, so Carer's Allowance | £0.00 |
| Now add: £25 a week to a childminder for her children while she works | -£25.00 |
| Earnings for Carer's Allowance | £199.00 |
| Carer's Allowance a week | £86.45 |
The childminder cost is allowed because it is under half of her earnings and is not paid to a close relative. Without it, Priya would lose £86.45 a week by earning £20 over the limit, which is why it is worth declaring every allowable expense when you claim.
What happens if I go over £204 in a week?
You are not entitled to Carer's Allowance for that week. There is no taper, so £205 of earnings can cost you the whole £86.45.6 Tell the Carer's Allowance Unit about any change in your earnings straight away, because payments made when you were over the limit are an overpayment you may have to pay back.
On 7 July 2026 the government opened a call for evidence, which closed on 18 August 2026, on modernising the earnings limit, including whether an earnings taper should replace the cliff edge and whether the rules on working hours should change. No change has been announced yet, so the £204 cliff edge still applies.6
Do savings affect Carer's Allowance?
No. The conditions for Carer's Allowance are about caring, age, education, where you live and your earnings. There is no savings or capital test, so savings of any amount do not stop it.51
Savings can still matter for other benefits you claim alongside it. Universal Credit is not paid if you have more than £16,000, and Pension Credit counts savings above £10,000.
Does a pension count as earnings?
The £204 limit applies to earnings from work: the only income test in the law is whether you are in gainful employment, so a private or workplace pension you draw is not counted as earnings.5 The State Pension works differently, because it overlaps with Carer's Allowance.
You cannot get the full amount of both Carer's Allowance and your State Pension. If your State Pension is £86.45 a week or more, you will not get a Carer's Allowance payment. If it is less, Carer's Allowance tops it up to £86.45.1
It can still be worth claiming at State Pension age: if your State Pension is more than £86.45, your Pension Credit can go up instead, through the £48.15 a week carer amount.18
Who else can get Carer's Allowance?
As well as the earnings rule, you must be 16 or over, spend at least 35 hours a week caring, not be in full-time education or studying for 21 hours a week or more, and have been in England, Scotland or Wales for at least 2 of the last 3 years. The person you care for must get a qualifying benefit, such as PIP daily living, Attendance Allowance or DLA at the middle or highest care rate.1
You do not have to be related to, or live with, the person you care for. If you live in Scotland, you apply for Carer Support Payment instead.21
Is Carer's Allowance taxable, and can it be backdated?
Carer's Allowance is on HMRC's list of taxable benefits, but you only pay tax on it if your income is over the Personal Allowance.72
You can backdate a claim by up to 3 months. When you apply, have your latest payslip ready and details of any expenses, such as pension contributions or the cost of care for your children.3
Earning too much for Carer's Allowance? Check Universal Credit
If your earnings are over £204 a week, you may still get the Universal Credit carer element of £209.34 a month. It has no earnings limit, although your earnings reduce Universal Credit through the 55% taper.9
If you do get Carer's Allowance and Universal Credit, your Universal Credit is reduced by the amount of your Carer's Allowance.4
- Carer's Allowance: £86.45 a week, paid weekly in advance or every 4 weeks.28
- Earnings limit: £204 a week after tax, National Insurance and expenses.1
- Half of pension contributions, and care costs up to 50% of earnings, can be deducted.1
- Over the limit in a week means no Carer's Allowance that week.6
- Not means-tested: savings do not count.5
- Backdating up to 3 months; in Scotland, claim Carer Support Payment.3