The Department for Work and Pensions (DWP) has initiated a comprehensive review of Carer’s Allowance that could result in substantial modifications to how the benefit operates for hundreds of thousands of unpaid carers.

The six-week call for evidence, which started on July 7, is inviting submissions from carers, charities and organisations on how to update Carer’s Allowance for the first time since its introduction by the DWP in 1976.

Amongst the suggestions under consideration are substituting the existing earnings ‘cliff edge’ with a taper, enhancing support for carers whose income fluctuates from week to week and examining rules that restrict how much paid employment carers can undertake while retaining their benefit.

Currently, people claiming Carer’s Allowance can earn up to £204 a week after certain deductions while continuing to receive the benefit. Should they earn beyond that threshold, they risk losing their entitlement.

The UK Government raised the weekly earnings threshold to a record £204 earlier this year, permitting carers to earn approximately £10,000 annually while continuing to claim Carer’s Allowance, reports the Daily Record.

Nevertheless, DWP maintains the existing system no longer accommodates modern employment patterns and can generate difficulties for carers with variable earnings, leaving some confronting unexpected overpayments and debts.

The review follows the independent Sayce Review, which determined the current earnings regulations were antiquated and that ambiguous guidance on variable income had contributed to carers inadvertently accumulating debts. Minister for Social Security and Disability Sir Stephen Timms said: “Unpaid carers are the backbone of our communities – quietly providing support that makes an enormous difference to the lives of those they love.

“They deserve a system and level of support that properly reflects the contribution they make, and we are determined to deliver that. This call for evidence is our commitment to going further – and to making sure carers’ voices shape every step of what comes next.”

The DWP is also examining whether amendments should be made to regulations surrounding working hours to better accommodate contemporary caring responsibilities.

Earlier this year, the Department initiated a reassessment of approximately 200,000 Carer’s Allowance cases. Roughly 25,000 carers are anticipated to have debts reduced, cancelled or refunded following the exercise.

From next week, new regulations will also guarantee that any refunds issued to carers will not impact entitlement to Universal Credit, Pension Credit or Housing Benefit.

Emily Holzhausen CBE, Director of Policy and Public Affairs at Carers UK, welcomed the review. She said: “We need to see further reform to Carer’s Allowance because the current system is outdated and no longer reflects the realities of caring today.

“This includes inflexible rules around the earnings limit which are hard to navigate for carers with fluctuating earnings and can dissuade some from claiming what they are entitled to altogether.”

Kirsty McHugh, chief executive of Carers Trust, described it as “incredibly encouraging” that the Government had pledged to review the benefit.

She said the organisation hoped the review would represent “a real step change in the way carers are supported”. The call for evidence closes on August 18, 2026, and the feedback will help inform future reforms to Carer’s Allowance. The consultation can be accessed on GOV. UK.