DWP Carer's Allowance 2026: 3 Major Updates Every Unpaid Carer Must Know
The Department for Work and Pensions (DWP) has officially confirmed the new rates for Carer's Allowance, along with a critical increase to the weekly earnings limit, set to take effect from April 2026 for the 2026/2027 financial year. As of today, December 19, 2025, these figures represent the most current and vital financial updates for the over one million unpaid carers across the UK who rely on this essential benefit.
This comprehensive update is essential reading for anyone claiming Carer's Allowance, as it details not only the monetary increase but also the significant rise in the threshold you can earn without losing entitlement. Furthermore, it covers the ongoing and highly sensitive reassessment process related to the decade-long Carer’s Allowance overpayment scandal, a key issue that will continue to dominate headlines into 2026.
The New Carer's Allowance Figures for 2026/2027
The annual uprating of DWP benefits is a crucial moment for claimants, and the 2026/2027 financial year brings a confirmed increase for Carer's Allowance. The new figures are based on the Consumer Price Index (CPI) rate of inflation, ensuring the benefit keeps pace with the rising cost of living, although many charities continue to argue the allowance remains fundamentally too low.
Weekly Payment Rate Rises to £86.45
The main Carer's Allowance payment is set to increase by 3.8% from April 2026.
- Current Weekly Rate (2025/2026): £83.30
- New Weekly Rate (2026/2027): £86.45
- Weekly Increase: £3.15
This uprating is a standard, inflation-linked increase. For a carer receiving the allowance every four weeks, the payment will increase from £333.20 to £345.80. This rise is designed to offer a modest boost to the financial stability of unpaid carers, who provide vital support for at least 35 hours a week to someone receiving a qualifying disability benefit.
Crucial Changes to the Weekly Earnings Limit
Perhaps the most significant change for working carers is the confirmed increase to the weekly earnings limit. This threshold is the maximum amount a carer can earn from paid work after deductions (like tax, National Insurance, and half of any pension contributions) without losing their entitlement to Carer's Allowance.
The DWP has officially confirmed a new, higher threshold from April 2026, a move that is expected to benefit over a million carers and allow more people to work part-time without jeopardising their benefit claim.
The New Earnings Threshold in Detail
- Current Weekly Earnings Limit (2025/2026): £196
- New Weekly Earnings Limit (2026/2027): £207
- Weekly Increase: £11
This £11 increase to the earnings limit is a crucial adjustment, particularly as it helps counter the impact of rising National Living Wage rates. Without this increase, many part-time working carers would have been pushed over the limit, forcing them to choose between their caring responsibilities and essential income. The new £207 limit provides a small but necessary buffer.
The Overpayment Scandal: What Carers Must Know for 2026
A major cloud hanging over the Carer's Allowance system is the ongoing scandal concerning massive overpayments, which has seen tens of thousands of carers unknowingly accumulate debts often reaching thousands of pounds. This issue is set to be a focal point for the DWP and claimants well into 2026.
The DWP has acknowledged the scale of the problem, with estimates suggesting up to 185,000 unpaid carers who received the allowance between 2015 and September 2025 may have been affected by overpayments due to small breaches of the earnings limit. The government has set aside significant funds to address the administrative failures that caused the issue.
The Reassessment Exercise and Key 2026 Dates
The DWP has committed to a comprehensive reassessment exercise for up to 145,000 cases where overpayments occurred. The key update for 2026 is the timeline for this review.
- Information Expected: Details on how the reassessment exercise will work in practice are expected to be published in early 2026.
- Current Advice: The government has advised carers who are currently being told to repay a debt to continue doing so, but they have also stated that they are not currently pursuing new overpayment debts.
- Independent Review: An independent review into the DWP's handling of the overpayments is ongoing, and its findings will likely shape future policy and the debt collection process in 2026 and beyond.
Carers who are worried about a potential overpayment should check their earnings carefully against the new £207 limit from April 2026 and ensure they report any changes in their circumstances immediately to the DWP to avoid future debt. The issue highlights a fundamental flaw in the system's ability to track small earnings changes, and pressure remains on the DWP for a long-term fix.
Related Benefit Upratings for Carers and Future Reforms
The increases for Carer's Allowance are mirrored in other carer-related benefits, providing a wider financial uplift for those supporting disabled or ill relatives. These changes are also part of the annual DWP uprating process.
Universal Credit Carer Element Increase
Claimants receiving Universal Credit (UC) who are also caring for someone for at least 35 hours a week are entitled to the Carer Element. This element is also increasing from April 2026:
- Current Weekly Carer Element (2025/2026): £201.68
- New Weekly Carer Element (2026/2027): £209.34
This increase of £7.66 per week is a significant boost for Universal Credit claimants, helping to recognise the essential role of unpaid carers within the welfare system.
What About Future Reforms and PIP?
The DWP has faced calls for more fundamental reform of the Carer's Allowance, including increasing the payment to a more substantial level, or linking it to the National Living Wage. While the 2026 uprating is standard, the debate over the adequacy of the allowance continues.
Regarding other key disability benefits, the government has confirmed that there will be no immediate changes to Personal Independence Payment (PIP) or other disability benefits. Any major future changes to PIP will only be introduced after Autumn 2026, following the ongoing consultation on disability benefits reform. This means the immediate eligibility requirements for Carer's Allowance, which depends on the cared-for person receiving a qualifying benefit like PIP, remain stable for the 2026/2027 period.
In Scotland, a different system is already being rolled out. The Scottish Government is replacing Carer's Allowance with the Carer Support Payment, and in 2026, they are moving away from the twice-yearly payment system to a weekly payment model, though paid every four weeks, offering a different structure of support to Scottish carers.
Summary of Key Takeaways for Unpaid Carers
The DWP updates for the 2026/2027 financial year bring clarity and a modest financial increase for unpaid carers. The main points to remember are: The weekly Carer's Allowance payment rises to £86.45, and the vital weekly earnings limit increases to £207. Crucially, all carers must stay informed about the impending details of the overpayment reassessment exercise expected in early 2026. Staying compliant with the new earnings limit is the best way to safeguard your entitlement and avoid future overpayment issues.
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