TL;DR
Carer's Allowance has an earnings limit as well as a caring requirement. For 2026/27 you cannot be paid Carer's Allowance if you earn more than £204 a week after allowable deductions, up from £196 in 2025/26. Allowable deductions include income tax, National Insurance, half of any pension contributions, and some care costs that let you work. The limit is a cliff edge, so earning even a small amount over it means losing the whole week's payment.
Last reviewed 30 June 2026
The earnings limit for 2026/27
Carer's Allowance is not fully means-tested, because your savings do not affect it, but it does have a strict earnings limit. For 2026/27 you cannot be paid Carer's Allowance if you earn more than £204 a week after allowable deductions, up from £196 in 2025/26. This sits alongside the requirement to care for someone for at least 35 hours a week.
What counts as earnings
Earnings means money from employment or self-employment. It does not include money from occupational or personal pensions, which are not treated as earnings for Carer's Allowance, nor does it include most other benefits. For self-employed carers, earnings are worked out from profit after allowable business expenses, which can be averaged over a period to give a weekly figure.
The deductions you can make
You do not count your gross pay. You can deduct income tax and National Insurance, and half of any contributions you make to an occupational or personal pension. You can also deduct certain care costs that allow you to work, such as paying someone other than a close relative to care for the disabled person or for a child, up to half of your remaining net earnings. Work expenses that are wholly, exclusively and necessarily incurred in your job can also be taken off.
Why it is a cliff edge
The earnings limit is a hard cliff edge rather than a gradual taper. If your earnings after deductions are at or below £204 a week, you keep all of your Carer's Allowance. If they are even a small amount above it, you lose the whole week's payment, not just the excess. This is why careful budgeting around the limit matters, particularly for carers with variable hours.
The overpayment risk
The cliff edge has historically led to serious overpayment problems, where carers unknowingly went slightly over the limit and built up large debts that the DWP later sought to recover. A review found the department had acted unfairly in many such cases. The safest approach is to keep clear records of your earnings and to report any change in pay or hours to the Carer's Allowance Unit promptly.
Managing earnings around the limit
If you are close to the limit, it is worth checking exactly how your earnings are calculated, including which deductions apply, before taking on extra hours. In some cases increasing pension contributions or accounting for allowable care costs can keep you within the limit. Where earning above the limit is unavoidable, you may still be able to protect your State Pension through Carer's Credit, or receive support through the Universal Credit carer element, which has no earnings limit of its own.
Related guides
Disclaimer: This article is general information and not financial or welfare advice. Rates and rules are set by the DWP and can change each April. For help working out your earnings, contact a free adviser such as Citizens Advice or Carers UK. Figures are from the GOV.UK source below.
Frequently asked questions
What is the Carer's Allowance earnings limit for 2026/27?
You cannot be paid Carer's Allowance if you earn more than £204 a week after allowable deductions, up from £196 in 2025/26.
What can I deduct from my earnings?
Income tax, National Insurance, half of any pension contributions, some care costs that allow you to work, and work expenses that are wholly, exclusively and necessarily incurred in your job.
Does my pension count as earnings?
No. Occupational and personal pension income is not treated as earnings for Carer's Allowance.
What happens if I earn just over the limit?
You lose the whole week's Carer's Allowance, not just the excess, because the limit is a cliff edge rather than a taper.
What if I have to earn above the limit?
You may still protect your State Pension through Carer's Credit, or get support through the Universal Credit carer element, which has no earnings limit of its own.
