Does Carer’s Allowance Affect Universal Credit? Everything You Need to Know in the UK

If you’re a carer in the UK, it’s likely you’re juggling more than just your caregiving responsibilities—you’re probably managing a tight budget and trying to understand how various benefits interact. A common question is: “Does Carer’s Allowance affect Universal Credit?” The short answer is yes, it can. But there’s also good news: the carer element within Universal Credit may help to offset the impact.

In this blog, we’ll break down how Carer’s Allowance and Universal Credit work together, how your payments may be affected, and what you can do to avoid overpayments or missed entitlements.

What Is Carer’s Allowance and Who Can Claim It?

Quick Definition and Purpose of Carer’s Allowance

Carer’s Allowance is a benefit for people who provide unpaid care for someone with a disability or serious health condition. You must care for someone for at least 35 hours a week, and they must be receiving a qualifying benefit such as PIP, DLA, or Attendance Allowance.

Basic Eligibility Criteria for Carer’s Allowance in 2025

To qualify, you must:

• Be 16 or over

• Not be in full-time education

• Not earn more than £151 per week (after allowable deductions)

• Be caring for someone who gets a qualifying disability benefit

How Much Is Carer’s Allowance Per Week and Is It Taxable?

Yes, Carer’s Allowance is taxable and counts as income in most benefit assessments, including Universal Credit.

This means if you’re earning more than £151 a week (after tax, National Insurance, and allowable expenses), you’ll lose your entitlement.

What Is Universal Credit and How Is It Calculated?

Overview of Universal Credit and Who Can Apply

Universal Credit (UC) is a means-tested benefit for people who are on a low income or out of work. It combines several previous benefits into one monthly payment and is designed to support basic living costs.

Income and Benefit Interactions Within Universal Credit

Universal Credit is calculated based on:

• Your household income

• Your savings

• Your housing situation

• Any other benefits you receive (like Carer’s Allowance)

The Taper Rate and How It Affects Your UC Payments

If you earn money, your Universal Credit amount is reduced gradually by a taper rate—currently 55p for every £1 earned over your work allowance (if applicable). But Carer’s Allowance is counted in full as unearned income, which directly reduces your UC payment by the same amount.

So, Does Carer’s Allowance Affect Universal Credit Payments?

How Carer’s Allowance Is Treated as Income in UC

Yes, Carer’s Allowance affects Universal Credit because it is treated as unearned income. This means that if you receive £81.90/week in Carer’s Allowance, your Universal Credit payment will be reduced by £81.90/month.

Why Your UC Amount Might Be Reduced

The system considers you’re receiving additional financial support, so your Universal Credit is adjusted accordingly. However, this does not mean you lose more than you gain—especially if you qualify for the carer element.

The Role of the “Carer Element” in Balancing the Deduction

If you qualify as a carer, Universal Credit may include a carer element, which increases your maximum UC award and helps to balance the deduction caused by receiving Carer’s Allowance.

Here’s a comparison table to show how the numbers can work:

Note: Figures are simplified and may vary depending on other elements such as childcare, housing, or work allowances.

What Is the Carer Element in Universal Credit?

Eligibility for the Carer Element

To qualify, you must:

• Be caring for a severely disabled person at least 35 hours a week

• Not be paid as a professional carer

• Not be in full-time education

How Much Is the Carer Element Worth in 2025?

This is added to your maximum UC award, not deducted.

Can You Receive Both Carer’s Allowance and Carer Element Together?

Yes, and you should apply for both if you’re eligible. However, remember that Carer’s Allowance is deducted from UC, while carer element increases your award. They effectively cancel each other out to some extent.

How to Report Carer’s Allowance to Universal Credit

When and How to Inform DWP

Once you’re approved for Carer’s Allowance, you should report the change immediately in your Universal Credit online journal.

What Documents or Details You May Need

• Confirmation letter from the DWP about Carer’s Allowance

• Your National Insurance number

• The date your Carer’s Allowance claim started

Keeping Your Online UC Journal Updated

Use your journal to:

• Report changes in your caring hours

• Notify about employment income changes

• Record any communication with the DWP

Common Questions Around Carer’s Allowance and Universal Credit

Will I Lose Universal Credit If I Get Carer’s Allowance?

No, you won’t lose UC, but it will be reduced by the amount you receive in Carer’s Allowance. You may still be better off overall due to the carer element.

Can I Work and Still Get Both Benefits?

Yes, but keep in mind:

• Carer’s Allowance has an earnings cap of £151/week

• Universal Credit allows higher earnings but is subject to the taper rate

Does Claiming Carer’s Allowance Affect Other Benefits Like Housing or Council Tax Support?

Yes. Council Tax Reduction, Housing Benefit, and other means-tested benefits may be affected because Carer’s Allowance counts as income. Always report changes to your local authority.

Tips for Managing Your Benefits Without Losing Out

To avoid confusion or overpayments, follow these steps:

• ✅ Use a benefits calculator like EntitledTo or Turn2us

• ✅ Track all income, including freelance or part-time earnings

• ✅ Seek free advice from charities such as Citizens Advice, Scope, or Carers UK

• ✅ Keep your Universal Credit journal updated

• ✅ Understand the rules for overlapping benefits

Conclusion: Know Your Rights When Claiming Carer’s Allowance and Universal Credit

While Carer’s Allowance does affect Universal Credit, understanding the rules can help you make informed decisions. The deduction might seem like a drawback, but the carer element within Universal Credit ensures that carers aren’t penalised for doing one of society’s most important jobs.

If you’re a carer, it’s essential to claim everything you’re entitled to—and to do it the right way. Knowing how Carer’s Allowance interacts with Universal Credit is the first step in making sure your household stays financially supported while you care for a loved one.