Millions of people in the UK are unpaid carers, looking after a family member, friend, or neighbour who is disabled, elderly, or seriously ill. Carer's Allowance is the main state benefit for them, yet many eligible carers don't know they qualify, and some who do claim face the frustrating 'cliff edge' earnings trap. Here's how Carer's Allowance works in 2026/27.
What Is Carer's Allowance?
Carer's Allowance is a weekly benefit paid to people who spend at least 35 hours per week caring for someone with a disability. From April 2026, it's worth £86.45 per week (£4,495.40 a year). It's a taxable benefit — it counts as income for tax purposes and is included in any benefit calculations. Despite being one of the lowest-paid benefits in the UK, it's still worth claiming if you're eligible, as it can also 'passport' you to other entitlements including carers' premium in means-tested benefits and — importantly — Class 1 NI credits that count towards your State Pension.
- Weekly rate (2026/27): £86.45/week = £4,495.40/year
- Taxable: counts as income for tax and benefit purposes
- Provides NI credits (Class 1) — counts towards State Pension
- Passports to carer premium in other means-tested benefits
- Can be backdated up to 3 months if you were eligible earlier
Who Qualifies for Carer's Allowance?
To qualify for Carer's Allowance, you must: care for someone for at least 35 hours per week; be caring for someone who receives a qualifying disability benefit (the most common being Disability Living Allowance middle/highest rate care component, Personal Independence Payment daily living component, Attendance Allowance, or Armed Forces Independence Payment); be aged 16 or over; normally live in England or Wales (in Scotland you apply for Carer Support Payment instead); and not be in full-time education or studying 21 hours a week or more. Crucially, you cannot earn more than the earnings limit: £204 a week (2026/27) after tax, National Insurance and allowable expenses.
- 35+ hours caring per week
- Person cared for must receive qualifying disability benefit
- Qualifying benefits: DLA (middle/high care), PIP daily living, Attendance Allowance
- Aged 16+, living in England or Wales (Scotland has Carer Support Payment)
- Not in full-time education or studying 21+ hours a week
- Net earnings of £204/week or less (2026/27)
The Earnings Trap
The Carer's Allowance earnings threshold is one of the most politically debated aspects of the benefit. You lose all Carer's Allowance for any week your net earnings go over £204 (2026/27). There's no tapering, so a carer with net earnings of £204 a week receives the benefit in full, but one with £205 receives nothing. For part-time carers who work, staying under the threshold requires careful planning. 'Net earnings' are calculated after deducting tax, NI contributions, half of your pension contributions, some work expenses, and paid care costs for the person you care for or your children while you work (up to half of your earnings). Increasing pension contributions is the most effective legitimate way to reduce net earnings below the threshold.
- Cliff edge above £204/week net earnings (2026/27)
- No tapering — all or nothing
- Net earnings: after tax, NI, half of pension contributions, work expenses and some care costs
- Pension contributions reduce net earnings — consider increasing contributions
- Salary sacrifice pension also reduces gross earnings used in calculation
How Carer's Allowance Affects Other Benefits
Carer's Allowance interacts with other benefits in complex ways. If you receive Universal Credit, the 'carer element' (£209.34 a month in 2026/27) is added if you care for someone at least 35 hours a week, whether or not you claim Carer's Allowance — but the Carer's Allowance itself is counted as income against Universal Credit, so the net gain is smaller than it appears. If you're on Pension Credit, claiming Carer's Allowance triggers the carer premium, which adds £48.15 a week to your Pension Credit (2026/27). If your own State Pension is £86.45 a week or more, you may have an 'underlying entitlement' to Carer's Allowance — meaning you don't receive the payment (because State Pension overlaps with it) but you can still qualify for the carer premium in means-tested benefits such as Pension Credit.
- Universal Credit: carer element (£209.34/month in 2026/27) added when eligible
- Pension Credit: carer additional amount (£48.15/week in 2026/27) triggered by Carer's Allowance
- State Pension: 'underlying entitlement' can still unlock the carer premium even if no CA is paid
- Check for overlapping benefits with a free welfare benefits calculator
- MoneyHelper, Turn2Us, and EntitledTo all have free calculators
Frequently Asked Questions
Can I claim Carer's Allowance if I'm working?
Yes, as long as your net earnings are £204 a week or less (2026/27) and you meet the other criteria.
Does the person I care for have to live with me?
No — the person cared for can live elsewhere. What matters is that you spend at least 35 hours per week caring for them.
Can two people claim Carer's Allowance for the same person?
No — only one carer can claim Carer's Allowance for the same disabled person, even if multiple people are involved in their care.
What if the person I care for goes into hospital?
You must report it to the Carer's Allowance Unit. Payments can carry on for a while, but they stop if the person's qualifying disability benefit stops, which for adults usually happens after 28 days in hospital.
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