Martin Lewis says Budget will bring major benefit change for 1.4 million people

Martin Lewis has said that the working threshold for Carer's Allowance is set to increase in the Labour Budget. The Money Saving Expert founder announced that he had received confirmation from the government that the threshold would rise "by £30".

Currently, individuals can only claim the Department for Work and Pensions (DWP) carers benefit if they earn less than £151 per week after tax, National Insurance, pension contributions, and allowable expenses. However, if earnings exceed this threshold, the entire entitlement to the benefit is lost and must be repaid, even if it's only £1.

According to Money Saving Expert Martin, the government will announce that this limit will increase to "at least £181" in the Budget, with the new rate taking effect in April 2025. This change will allow carers to earn more from work while still claiming the benefit, impacting approximately 1.4 million people who receive the benefit.

In his post, Martin stated: "Good news. The Carers Allowance earnings threshold will be increased from £151 to at least £181 in the #Budget, starting April 2025. So carers can earn more and still receive the allowance. PS I've written at least £181 as it's currently £151 and the confirmation is it'll rise 'over £30 extra a week' - we think as its based on min wage hours it'll be £183, but that isn't confirmed."

While Martin Lewis has stated that this is "confirmed," the Department for Work and Pensions (DWP) has yet to release any official statement on the matter. The Money Saving Expert founder also mentioned he is "still waiting to hear" if there will be an increase in the Carer's Allowance benefit, which is currently at £81.90 a week, and whether the "cliff edge" would be replaced with a tapering system, reports the Mirror.

This change would mean that individuals wouldn't lose the entire benefit when their earnings exceed the working limit.

Martin Lewis, along with numerous charities and campaigners, has criticized the abrupt cut-off nature of the Carer's Allowance. He has previously described the benefit as "perverse" highlighting that unlike most benefits, such as Universal Credit which tapers off as income increases, "Carer's Allowance only has a cliff-edge, leaving many to plummet off."

The inflexibility of the rules has been a concern for claimants with variable work hours who might inadvertently breach the threshold. Those who do can be required to repay the DWP and, in some cases, face prosecution for benefit fraud.

Earlier this year, the Guardian shed light on the issue, prompting carers to come forward with their experiences. As of May 14, 2024, the DWP was in the process of reclaiming funds from 134,800 individuals who had received excess Carer's Allowance.