The limit, in plain English
- £204 a week net from 6 April 2026 (2025/26 was £196). The limit is now pegged to 16 hours at the National Living Wage — a real improvement, because it rises automatically when the NLW rises instead of trapping carers who got a pay rise.
- It is assessed on your net earnings — what's left after the deductions below — not your gross pay.
- You must also still care 35+ hours a week for someone on a qualifying disability benefit — the earnings limit is on top of that, not instead of it.
The cliff edge
£1 over = the whole week’s £86.45 gone
There is no taper. Earning £205 in a week doesn’t cost you £1 — it costs you the entire week’s Carer’s Allowance. The danger weeks are the irregular ones: overtime, bonuses, extra shifts, holiday pay, a fifth payday in a month. The government has said it is exploring a taper, but none exists yet — until it does, plan hours around the limit and check any one-off payments before accepting them.
What gets deducted before the limit
Your countable earnings are your gross pay minus:
- Income tax and National Insurance;
- Half of any pension contributions you make (workplace or personal) — the most under-used lever: putting more into your pension can legitimately bring you back under the limit while building your retirement;
- Some care costs — if you pay someone (not a close relative) to look after the person you care for, or your children, while you work, part of those costs can be deducted.
The pension trick — legitimate and DWP-recognised
Earning slightly over the limit? Increasing your pension contribution reduces countable earnings at 50p per £1 contributed. A carer £8 over could fix it with a £16/week pension contribution — keeping £86.45/week of Carer’s Allowance AND saving for retirement. Check the maths for your case with Carers UK first.
The overpayment scandal — and the review
- For years, carers who unknowingly crossed the limit (often by pennies) were hit with demands for thousands of pounds — because the cliff edge clawed back whole weeks, sometimes years later.
- In November 2025 the DWP announced it would review Carer’s Allowance overpayments going back to 2015, after findings that many arose from unclear DWP guidance rather than deliberate non-disclosure — with debts to be reduced, cancelled or refunded case by case.
- If you have an overpayment demand: don’t just pay. Ask the DWP for the full calculation, get free advice (Carers UK 0808 808 7777, Citizens Advice), and ask for your debt to be considered under the review. You can also ask for affordable repayments meanwhile.
Do this now
Check your latest payslip: is your net weekly figure under £204? If you’re close, list your irregular-pay risks (overtime, bonuses, 5-week months) and consider the pension-contribution route.
Report any earnings change to the DWP promptly — and if an old overpayment letter is sitting in a drawer, call Carers UK on 0808 808 7777 before paying anything.
How it fits with other benefits
- Universal Credit: CA counts as income, but UC’s carer element doesn’t require CA at all — and has no earnings limit. Some working carers are better off on the UC carer element alone; check both routes.
- State Pension: CA overlaps with it — if your pension is higher, you get underlying entitlement instead of payment, which can still unlock extra Pension Credit.
- Scotland: the equivalent is Carer Support Payment, with the same earnings rules.
- Caring counts towards your National Insurance record even when CA isn’t payable.