The UK government has initiated a significant review of Carer's Allowance, inviting unpaid carers, individuals with care needs, and relevant organisations to contribute their views on potential reforms. The six-week call for evidence, which began on 7 July 2026, aims to gather insights into modernising the benefit system, which has remained largely unchanged since its inception half a century ago. This move is intended to address long-standing issues, particularly concerning the earnings limit and its impact on carers with fluctuating incomes.
The current system, inherited from previous administrations, has been criticised for its outdated structure, as highlighted in the landmark Sayce Review. This review identified problems such as unclear guidance on averaging fluctuating earnings, which led to carers accumulating debts unknowingly, and an earnings limit that failed to keep pace with contemporary working patterns. In response, the government has already taken steps, including increasing the weekly earnings limit to a record £204, allowing carers to earn approximately £10,000 annually while retaining their support. Guidance has also been updated, and a reassessment exercise is underway for 200,000 cases, with around 25,000 expected to see debts reduced, cancelled, or refunded.
This latest call for evidence signals a deeper commitment to reform, exploring the potential introduction of an earnings taper and modifications to rules that cap the number of hours a carer can work before losing their benefit. These changes are designed to better reflect modern caring patterns and provide greater flexibility. Sir Stephen Timms, Minister for Social Security and Disability, emphasised the government's determination to deliver a system that properly acknowledges the crucial contribution unpaid carers make to communities.
Emily Holzhausen CBE, Director of Policy and Public Affairs at Carers UK, welcomed the government's initiative, stating that the current system is outdated and does not reflect the realities of modern caring. She highlighted the inflexibility of earnings limits as a particular concern, noting that it can be difficult for carers with fluctuating incomes to navigate and may even deter some from claiming their rightful entitlement. Carers Trust CEO Kirsty McHugh echoed these sentiments, noting that a major review of Carer's Allowance has been a long-standing demand from carers and their network.
The consultation period will conclude on 18 August 2026, with the gathered evidence set to inform future legislative changes. The government's goal is to develop a Carer's Allowance system that is fair, modern, and dependable for those who rely on it most, ensuring that carers' voices are central to the reform process. New capital disregard regulations are also set to come into force next week, ensuring that any refunds from the reassessment exercise do not affect entitlement to Universal Credit, Pension Credit, or Housing Benefit.