The Chancellor, John Healey, will use Wednesday's Budget to end the carer's allowance "cliff-edge", he has told the Guardian. Carers who earn over the weekly limit would lose £1 of allowance for each £1 earned above it, rather than the whole payment.
"So at this budget on Wednesday, we're ending that cliff-edge."
Under the current rules, earning over the £204 weekly limit costs a carer the entire £86.45 allowance for that week, the Guardian reports.
The paper says a carer who went over the limit by 1p a week for a year would owe £4,495.40, when the total excess was 52p. That figure checks out. Fifty-two weeks at £86.45 comes to £4,495.40.
An independent government-commissioned review found about 180,000 carers built up overpayment debts totalling £300m between 2019 and 2025, the Guardian reports. Debts were typically £2,000 to £5,000 and reached £20,000 in some cases.
The Work and Pensions Secretary, Pat McFadden, said: "We have listened to [carers'] concerns about the cliff-edge built into the system".
Carers UK policy director Emily Holzhausen and Carers Trust chief executive Kirsty McHugh welcomed the change, and McHugh urged wider modernisation. Campaigners say the technical demands of the new digital system mean it will not be in place before the end of the decade. No cost to the Exchequer has been given.