Chancellor John Healey has announced plans to end the Carer's Allowance earnings cliff edge, replacing it with a taper so that unpaid carers no longer lose their entire allowance for earning a penny over the weekly limit.
Under the new system, only £1 of support will be withdrawn for every additional £1 earned above the limit. Carers currently lose the whole £86.45 weekly payment if their earnings go above £204 a week, even by a few pence, a rule that has left many facing overpayment demands running into thousands of pounds.
The change is expected to take effect from the 2030-31 financial year, once new systems are in place to handle earnings information automatically. Until then, the current rules remain in force.
Five everyday fixes
The taper is one of five measures unveiled by the Treasury ahead of Wednesday's Budget. The Chancellor is locking in the 55p-a-mile tax-free rate for the first 10,000 business miles and raising the rate above that from 25p to 35p, which the Treasury says will benefit around three million employees and self-employed people who use their own vehicles for work.
Parental pay will be extended to more than 150,000 additional parents a year, including self-employed fathers and partners who have previously missed out, giving eligible parents two weeks of support currently worth up to £194 a week.
The government will also remove import tariffs on more than 100 products, including baked beans, chocolate and gherkins, and on fertiliser and kerosene heating oil. Together with suspensions already in place, the Treasury says households could save up to £21 a year on their food shop.
Self-service Post Office parcel drop boxes will be expanded to 1,000 by the end of the financial year, alongside upgrades to 600 branches.
John Healey: 'We can act where we can make a difference'
"Today's everyday fixes are just a small part of what we are doing to give families a bit of breathing space," Healey said. "Conflict in the Middle East and Europe is hitting families here at home through higher everyday costs. We can't control global events, but we can act where we can make a difference."
Carers' organisations welcomed the move. Carers UK, which has campaigned for a taper for many years, said the cliff edge was one of the most punitive rules in the benefits system.
