Chancellor Healey to scrap carer's allowance cliff-edge in Wednesday's budget

Unpaid carers in the UK will no longer lose their entire weekly benefit if their earnings rise by just a penny, Chancellor John Healey said. He plans to announce the change in his budget on Wednesday, October 28. The move replaces the current cliff-edge rule with a tapered system that adjusts benefits gradually as income increases.

Under the current rules, a carer earning more than £204 per week forfeits their full £86.45 allowance. A carer who exceeded the limit by only one penny for an entire year would face a repayment demand of £4,495.40. Healey said the new taper will remove just one pound of allowance for every extra pound earned. This ensures carers are not financially worse off for working additional hours or accepting a pay rise.

The Department for Work and Pensions acknowledged the flaw but previously insisted it was the carer's responsibility to report changes. Many carers learned of their overpayments years later. The resulting debt traps were often enforced using laws designed for organized crime, leading some carers to fraud convictions. An independent review found that 180,000 carers accumulated £300 million in overpayment debts between 2019 and 2025.

Work and Pensions Secretary Pat McFadden said the government listened to carers' concerns. He stated the ministry intends to end the practice that leaves people poorer for taking on a few more hours. The new digital system will not be live before the end of the decade due to technical requirements.

Healey also announced other measures in the budget preview. The 55p per mile tax-free mileage rate for the first 10,000 business miles will become permanent. The rate for miles above 10,000 will rise to 35p. The Treasury estimates this will benefit roughly 3 million people. Healey is also expected to raise the national minimum wage by about 4% to £13.20 an hour.

The budget includes support for 150,000 new parents, including self-employed fathers, with parental support worth up to £194 a week. Ministers will remove import tariffs on more than 100 products, such as baked beans and chocolate. The government will also increase the number of Post Office drop boxes to 1,000 to reduce queues.

Andy Burnham, the Prime Minister, said the changes address everyday problems that cost people money. He noted that the measures will help nurses driving to work, parents with new babies, and carers picking up extra shifts. Carers UK director of policy Emily Holzhausen called the taper a practical change that gives families more choice about working and caring.