Carers play a vital role in society, often providing unpaid care to family members or friends who are ill, disabled, or elderly. If you’re one of them, it’s natural to wonder what financial help is available to you — and specifically, “is Carer’s Allowance means tested?”
This comprehensive guide explains everything you need to know about Carer’s Allowance, how it works, and how your income and savings may (or may not) affect your entitlement. Whether you’re new to the benefits system or reviewing your eligibility, you’ll find answers here.
What Is Carer’s Allowance and Who Is It For?
The Purpose of Carer’s Allowance in the UK
Carer’s Allowance is a non-means-tested benefit designed to support people who spend a significant amount of time caring for someone else. It’s provided by the Department for Work and Pensions (DWP) to help relieve financial pressure on unpaid carers who are unable to work full-time due to their responsibilities.
This benefit recognises the value of unpaid care and ensures carers receive some level of income if they meet the criteria.
Who Qualifies as a Carer?
You may qualify if:
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You care for someone who receives a qualifying disability benefit (e.g., PIP, Attendance Allowance).
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You provide at least 35 hours of care per week.
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You earn £151 or less per week (after deductions).
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You’re aged 16 or over, live in the UK, and meet residency requirements.
You don’t need to be related to or live with the person you care for.
Overview of Carer’s Allowance Payment (2025 Rate)
As of 2025, Carer’s Allowance pays £81.90 per week. It’s usually paid every 4 weeks, and you can choose to receive it directly into your bank or building society account.
Is Carer’s Allowance Means Tested?
What Does “Means Tested” Actually Mean?
When a benefit is means tested, it means your income, savings, or both are assessed to determine how much you receive — or if you qualify at all. Benefits like Universal Credit, Pension Credit, and Housing Benefit are all means tested.
The Official Answer: Is Carer’s Allowance Based on Income or Savings?
No, Carer’s Allowance is not means tested. It does not take your savings into account and doesn’t assess household income.
However, it does have an earnings limit — and that’s where many people get confused.
Difference Between Means-Tested and Non-Means-Tested Benefits
| Type | Savings Counted? | Earnings Considered? | Household Income Counted? |
|---|---|---|---|
| Means Tested | ✅ Yes | ✅ Yes | ✅ Yes |
| Non-Means Tested | ❌ No | ✅ Sometimes | ❌ No |
Carer’s Allowance falls under non-means-tested, meaning your individual earnings matter, but savings and partner’s income do not.
Why Carer’s Allowance Is Considered a Non-Means-Tested Benefit?
Despite having an earnings threshold, the benefit remains non-means-tested because:
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It only considers your own earnings, not overall income.
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Savings, investments, or other capital are not factored in.
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There is no tapering based on income — you’re either eligible or not.
What Are the Income Limits for Carer’s Allowance?
Weekly Earnings Limit Explained?
You can work and still claim Carer’s Allowance as long as your net earnings don’t exceed £151 per week (after tax, National Insurance, and expenses such as pension contributions or travel between jobs).
If you earn just £1 over, you lose your entire allowance.
What Counts as “Earnings” According to the DWP?
Earnings include:
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Wages or salary from employment
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Profits from self-employment
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Overtime and bonuses
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Some benefits in kind (like company cars)
Not included:
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PIP or DLA payments
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Child Benefit
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Occupational pensions
How Self-Employment or Pensions Are Treated?
If you’re self-employed:
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Only your profits after expenses count.
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You can deduct “reasonable business expenses.”
If you’re retired:
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Your pension income doesn’t count toward the earnings limit, but may affect other benefits (like Pension Credit).
Does Income from Investments or Savings Matter?
No, investment income — such as dividends, interest, or rental income — is not counted. Your eligibility is based on earned income, not capital.
How Does Carer’s Allowance Affect Other Benefits?
Overlapping Benefits Rule (e.g. State Pension)
If you get another income-replacement benefit, such as a State Pension, you usually can’t be paid Carer’s Allowance in full. This is due to the overlapping benefits rule.
However, you may receive an underlying entitlement, which could increase other benefits like:
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Housing Benefit
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Council Tax Reduction
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Pension Credit
Impact on Universal Credit, Housing Benefit, and Income Support
Receiving Carer’s Allowance can:
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Add the Carer Element to your Universal Credit, increasing your monthly payment
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Reduce Housing Benefit if total income rises
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Affect Income Support eligibility
Each case is different, so it’s best to use a benefits calculator or speak with Citizens Advice.
Underlying Entitlement Explained
Even if you’re not paid Carer’s Allowance because of another benefit, you may have “underlying entitlement” — this ensures your carer status is recognised, potentially increasing other benefit amounts.
Can You Get Carer’s Allowance If You Have Savings?
DWP Policy on Savings for Carer’s Allowance
The DWP does not consider savings when determining your eligibility for Carer’s Allowance. Whether you have £100 or £100,000 in the bank, it makes no difference.
Comparison with Universal Credit and Pension Credit
| Benefit | Savings Considered? | Effect of Savings |
|---|---|---|
| Carer’s Allowance | ❌ No | No effect |
| Universal Credit | ✅ Yes | Over £6,000 starts affecting payments |
| Pension Credit | ✅ Yes | Reductions start at £10,000+ |
This makes Carer’s Allowance more accessible than other benefits for carers with savings.
When Savings Might Affect Other Linked Benefits?
Savings could indirectly impact you if you’re also on:
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Housing Benefit
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Pension Credit
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Council Tax Support
That’s because these linked benefits are means tested, unlike Carer’s Allowance itself.
Common Misconceptions About Carer’s Allowance
“Carer’s Allowance Depends on Household Income”
False. Only your own net earnings matter. Your partner’s income does not affect your claim.
“Savings Will Stop Me from Claiming”
False. Carer’s Allowance is not affected by savings.
“You Can’t Work and Get Carer’s Allowance”
Also false. You can work, but your net earnings must be £151 or less per week.
Real-World Examples and Case Scenarios
Case 1: Employed Carer with Low Income
Sarah, a part-time care assistant earning £120/week, cares for her mum 40 hours a week. She qualifies for full Carer’s Allowance because her earnings are under the limit.
Case 2: Carer on Pension with Savings
David, age 68, receives State Pension and has £50,000 in savings. He doesn’t get paid Carer’s Allowance due to overlapping benefits but receives underlying entitlement, which increases his Pension Credit.
Case 3: Self-Employed Carer Supporting a Relative
Aisha runs a small online shop and cares for her disabled brother. Her business earns £200/week gross but only £100 after expenses — she qualifies for Carer’s Allowance.
Helpful Table: Means-Tested vs Non-Means-Tested Benefits
| Benefit Name | Means Tested? | Based on Income? | Based on Savings? | Notes |
|---|---|---|---|---|
| Carer’s Allowance | ❌ No | ✅ Yes (earnings only) | ❌ No | Must provide 35+ hrs of care |
| Universal Credit | ✅ Yes | ✅ Yes | ✅ Yes | Fully income and capital tested |
| PIP | ❌ No | ❌ No | ❌ No | Assessed based on health conditions |
| Pension Credit | ✅ Yes | ✅ Yes | ✅ Yes | Reduces above £10,000 in savings |
Frequently Asked Questions
Can I claim Carer’s Allowance if I have a pension?
Yes, but if you get State Pension, it may overlap with Carer’s Allowance. You might get underlying entitlement, which can increase other benefits.
Will having savings stop my Carer’s Allowance?
No, savings are not considered at all for this benefit.
How often is Carer’s Allowance paid?
Usually every 4 weeks, directly into your bank account.
Can I get Carer’s Allowance and work part-time?
Yes — as long as your net weekly earnings stay under £151.
Final Thoughts: Understanding the Role of Income in Carer’s Allowance
To wrap it up, Carer’s Allowance is not means tested, but it does have an earnings cap that determines eligibility. Your savings, partner’s income, and household financial situation are not assessed.
I’m Laura Wilson, a passionate blogger and content creator with a deep interest in business, finance, and entrepreneurship. I’ve had the opportunity to write for several premium blogs, sharing insights & practical advice for individuals & small businesses. I’m the founder and publisher of ukbusinessmag.co.uk, where I focus on creating valuable, easy-to-understand content to help UK startups & SMEs grow.
