Glossary · UK
What is Carer's Allowance?
A taxable benefit for people who spend at least 35 hours a week caring for someone with a qualifying disability benefit, subject to an earnings limit; receiving it can reduce the cared-for person's means-tested benefit entitlement through an overlapping-benefit rule.
Full Definition
Carer's Allowance is a taxable benefit paid to people who spend at least 35 hours a week caring for someone who receives a qualifying disability benefit, such as the daily living component of Personal Independence Payment, Attendance Allowance, or the middle or higher rate care component of Disability Living Allowance. Unlike the disability benefits it depends on, Carer's Allowance is not paid to the disabled person themselves but to the carer, and while it is not affected by savings, it is subject to an earnings limit -- the carer can work and still claim, but if their net earnings from employment or self-employment exceed the weekly threshold after allowable deductions such as income tax, National Insurance, and half of any pension contributions, entitlement is lost entirely for that week rather than tapering down gradually. Carer's Allowance counts as taxable income and must be declared, and it interacts with other benefits through an "overlapping benefits" rule: it cannot usually be paid in full alongside certain other income-replacement benefits the carer might also be entitled to in their own right, such as the State Pension, contribution-based Jobseeker's Allowance, or contribution-based Employment and Support Allowance, if those already meet or exceed the Carer's Allowance rate. Importantly, an award of Carer's Allowance to the carer can reduce the severe disability premium or addition within the cared-for person's own means-tested benefits (such as Pension Credit or income-related ESA), because that premium is specifically designed for people who live alone with no one receiving Carer's Allowance for looking after them, so claiming Carer's Allowance is not always financially beneficial to the household as a whole and needs checking carefully before applying. Worked example: a carer looks after their disabled adult child, who receives the enhanced daily living component of PIP, for around 40 hours a week and also works 10 hours a week earning below the weekly earnings limit after deductions; they successfully claim Carer's Allowance, which is paid weekly and counts as taxable income against their personal allowance, but because their child had been receiving an extra severe disability premium within their own Pension Credit award (available only because no one was claiming Carer's Allowance for them), that premium is removed once the parent's Carer's Allowance claim starts, so the family needs to weigh the new Carer's Allowance income against the reduction in the child's separate benefit before deciding whether to proceed.