The UK government’s Autumn Budget 2024 introduces several measures that directly or indirectly affect carents. Here’s a breakdown of the key points from the budget report and what they may mean for you:
1. Increased Carer’s Allowance Earnings Limit
What’s Changing: The government is raising the Carer’s Allowance Weekly Earnings Limit to the equivalent of 16 hours at the National Living Wage (NLW).
Details:
• Increase of £45 per week in the earnings limit.
• Enables over 60,000 more carers to access Carer’s Allowance between April 2025 and March 2030.
• 70% of Carer’s Allowance recipients are women, supporting them to start work or increase working hours.
• Largest increase to the earnings limit since Carer’s Allowance was introduced in 1976.
What This Means for Carents:
• Greater Flexibility to Work: You can work more hours or take higher-paying jobs without losing your Carer’s Allowance.
• Improved Financial Security: Increased earnings can help manage living costs while continuing your caregiving responsibilities.
• Supporting Women Carers: As a significant proportion of carers are women, this change particularly enhances financial independence for female carents.
• Access for More Carers: An estimated 60,000 additional carers will become eligible for Carer’s Allowance, providing crucial financial support.
• Understanding the Numbers:
• The 60,000 figure represents the number of carers expected to successfully claim Carer’s Allowance between April 2025 and March 2030.
• Calculated by forecasting employment inflows and identifying carers whose earnings fall between the previous and new earnings limits.
• A take-up assumption was applied to estimate the likelihood of eligible carers making a claim.
2. Independent Review of Carer’s Allowance Overpayments
What’s Happening: An independent review will examine overpayments of Carer’s Allowance to understand how they occur and how to prevent them.
What This Means for Carents:
• Improved Processes: The review aims to streamline the system, reducing the risk of overpayments and the stress they cause.
• Future Support: The government will explore additional ways to help carers into work, potentially leading to more supportive policies and resources.
3. Support with Cost of Living
• Household Support Fund Extension:
• £1 billion allocated to extend the Household Support Fund in England and Discretionary Housing Payments in England and Wales for 2025-26.
• Purpose: To help low-income households facing hardship with essentials like food, energy, and water.
What This Means for Carents:
• Financial Assistance: If you’re experiencing financial hardship, you may access additional support to help manage essential costs.
• Application Through Local Authorities: Funds are distributed by local councils, so check with your local authority for eligibility and application details.
4. Changes to Universal Credit (UC)
• Fair Repayment Rate:
• A new cap on debt repayments through UC at 15% of the standard allowance.
• Benefit to 1.2 million households, with an average of £420 more per year.
What This Means for Carents:
• Increased Monthly Income: If you’re repaying debts through UC deductions, you’ll retain more of your UC each month.
• Support for Families: Around 700,000 families with children will benefit, potentially easing financial pressures on carents supporting both elderly relatives and children.
5. Uprating of Working-Age Benefits
What’s Changing: All working-age benefits will increase by 1.7% for 2025-26, in line with the September 2024 Consumer Price Index (CPI).
What This Means for Carents:
• Slight Increase in Benefits: If you receive benefits like Carer’s Allowance or UC, you can expect a modest increase in payments.
6. State Pension and Pension Credit Increases
• State Pension Triple Lock Maintained:
• Basic and new State Pensions will increase by 4.1% from April 2025.
• Pension Credit Standard Minimum Guarantee:
• Will also increase by 4.1% from April 2025.
• What This Means for Your Elderly Relatives:
• Increased Income: Your loved ones receiving State Pension or Pension Credit will see higher payments, potentially reducing financial strain.
• Indirect Benefit to Carents: Increased financial independence for your relatives may ease the financial responsibilities you shoulder.
7. National Living Wage (NLW) Increase
What’s Changing: NLW will rise by 6.7% to £12.21 per hour from April 2025.
What This Means for Carents:
• Higher Earnings Potential: If you’re working, you may benefit from increased wages.
• Impact on Care Costs: If you employ paid carers or use care services, costs may rise due to increased wages in the care sector.
8. Fuel Duty Freeze
What’s Happening: Fuel duty will be frozen at current levels for one year, extending the 5p cut and cancelling the planned inflation-based increase for 2025-26.
What This Means for Carents:
• Cost Savings: Helps keep the cost of petrol and diesel down, beneficial if you frequently drive for caregiving duties.
9. Help to Save Scheme Extension
What’s Changing: The Help to Save scheme is extended until April 2027, with eligibility extended to all UC claimants who are in work from April 2025.
What This Means for Carents:
• Savings Opportunity: If you’re on UC and working, you can benefit from government bonuses on your savings, helping build financial resilience.
10. Additional Points
• Household Impact: According to the government’s distributional analysis, households in the lowest income deciles will benefit most from the budget’s policy decisions.
Business Impacts:
• Employer National Insurance Contributions (NICs): Increased rate may affect employers, including those who hire carers.
• Employment Allowance Increase: Small businesses benefit from increased allowance, potentially offsetting NICs rise.
Summary for Carents:
• Enhanced Support for Carers:
• The increase in the Carer’s Allowance Earnings Limit provides greater flexibility and financial security.
• More carers, particularly women, will be able to work or increase their hours without losing their allowance.
• Financial Assistance:
• Extensions of support funds and freezes on fuel duty help manage living expenses.
• Uprated benefits and increased State Pension provide modest boosts to income.
• Opportunities for Savings and Debt Management:
• The Help to Save scheme offers a way to build savings with government support.
• Changes to UC repayments allow you to retain more of your income each month.
Action Points:
• Review Eligibility:
• Check if you qualify for increased Carer’s Allowance under the new earnings limit starting from April 2025.
• Consider how the NLW increase may affect your earnings and eligibility.
• Access Support Funds:
• Contact your local authority to learn about the Household Support Fund and how it may assist you.
• Plan for Benefit Changes:
• Anticipate the increases in benefits and adjust your budgeting accordingly.
• Stay Informed:
• Keep an eye out for further government announcements on support for carers.
• Participate in consultations or reviews when possible to voice your experiences and needs.
Note: While the budget introduces positive changes for carers, it’s essential to consider how increased wages (e.g., NLW rise) might affect costs for care services you use. Balancing these factors will help you make informed decisions in your caregiving role.
We’re Here to Help
At Carents, we’re dedicated to supporting you with up-to-date information and resources. If you have questions or need assistance navigating these changes, please reach out or join our community discussions.
References:
• HM Treasury. (2024). Autumn Budget 2024.
• Department for Work and Pensions. (2024). Carer’s Allowance Statistics.
