You can absolutely work while claiming Carer’s Allowance — you just need to stay within the earnings limit. Here’s how it works.
The Basic Rules
To claim Carer’s Allowance while working, you must:
- Earn no more than £151 per week (net, after allowable deductions)
- Provide at least 35 hours of care per week to the person you look after
- Not be in full-time education (21+ hours per week of supervised study)
You can work any number of hours — there’s no hourly restriction. It’s only the earnings that matter.
How the Earnings Limit Works
The £151 limit is your net earnings — not your gross pay. You can deduct:
| Deduction | What It Means |
|---|---|
| Income Tax | Tax deducted from your pay |
| National Insurance | Employee NI contributions |
| Pension contributions | Up to 50% of your net earnings |
| Care costs while working | What you pay someone to look after the person you care for, or a child under 16, while you’re at work |
Example — Employed
| Item | Amount |
|---|---|
| Gross weekly pay | £200 |
| Minus Income Tax | -£12 |
| Minus National Insurance | -£8 |
| Minus pension contribution | -£10 |
| Minus care costs while at work | -£25 |
| Net earnings for CA | £145 ✅ (under £151) |
Example — Self-Employed
For self-employment, net earnings = gross income minus allowable business expenses, tax, NI, and pension contributions.
What Counts as Earnings
Included
- Wages or salary (employed)
- Self-employment profits
- Statutory Sick Pay
- Statutory Maternity/Paternity Pay
- Bonuses and commission
- Tips (if declared)
Not Included
- Carer’s Allowance itself
- Other benefits (Universal Credit, Housing Benefit, etc.)
- Pension income
- Investment income (dividends, interest, rent)
- One-off payments (redundancy, compensation)
- Occupational sick pay from a previous employer
Staying Under the Limit
Strategies That Work
Adjust your hours: If you’re paid hourly, calculate exactly how many hours keep you under £151 net. Build in a buffer.
Maximise pension contributions: Pension contributions up to 50% of net earnings are deductible. If you’re slightly over the limit, increasing pension contributions can bring you back under — and you’re saving for retirement.
| Gross Weekly Pay | Without Extra Pension | With Extra Pension (£20/week) |
|---|---|---|
| £190 | Net £157 ❌ | Net £137 ✅ |
| £200 | Net £165 ❌ | Net £145 ✅ |
Claim care costs: If you pay anyone to care for the person you look after (or a child) while you work, this is deducted from your earnings. Keep receipts.
Salary sacrifice: If your employer offers salary sacrifice for pension, childcare vouchers, or cycle-to-work, this reduces your gross pay before the calculation.
What to Watch Out For
Holiday pay and bonuses: A week where you receive holiday pay or a bonus on top of normal wages could push you over the limit for that week.
Irregular hours: If your hours vary, track your earnings carefully each week. One week over the limit means losing that week’s Carer’s Allowance.
The cliff edge: If you earn £151.01 in a week, you lose the entire £81.90 payment for that week. There’s no taper or gradual reduction.
What Happens If You Go Over
Occasional Breach
If you go over the limit in a single week (e.g., due to a bonus), you lose Carer’s Allowance for that week only. You must report it, but it doesn’t necessarily affect future weeks.
Regular Breach
If your earnings regularly exceed £151:
- You’ll lose Carer’s Allowance
- You may be asked to repay any overpayment
- Consider claiming underlying entitlement instead (see below)
Reporting Changes
You must report earnings changes to the Carer’s Allowance Unit:
- Phone: 0800 731 0297
- Online: through your gov.uk account
- Report within one month of the change
Underlying Entitlement
If you earn over £151/week and can’t receive Carer’s Allowance payments, you may still have underlying entitlement. This means:
- You don’t receive Carer’s Allowance payments
- But having the entitlement can increase other benefits you receive
- Universal Credit includes a carer element (£198.31/month) that doesn’t depend on the £151 limit
- Council Tax Reduction, Housing Benefit, and Pension Credit may all be enhanced
This is particularly valuable if you’re on Universal Credit — the carer element is worth more than Carer’s Allowance itself.
Carer’s Allowance and Other Benefits
Benefits Affected by Carer’s Allowance
| Benefit | Effect |
|---|---|
| Universal Credit | Carer element added (£198.31/month). CA is deducted pound for pound, but carer element more than compensates |
| State Pension | Carer’s Allowance earns NI credits towards your State Pension |
| Council Tax | Carer’s discount may apply |
| Income Support | Carer premium added |
| Pension Credit | Carer addition included |
The Person You Care For
The person you care for must receive one of:
- PIP daily living component (either rate)
- Attendance Allowance (either rate)
- DLA middle or highest rate care component
- Armed Forces Independence Payment
- Constant Attendance Allowance
National Insurance Credits
Even if you earn under the tax threshold, claiming Carer’s Allowance gives you Class 1 NI credits that count towards your State Pension. This is one of the most valuable hidden benefits of the claim — it protects your pension record during your caring years.