Tax Glossary

Carer's Allowance

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Last updated on:
March 17, 2024

Carer's Allowance is a financial support mechanism designed for individuals who dedicate at least 35 hours a week to care for someone. This care recipient is not required to be a family member, broadening the scope of eligibility for potential claimants.

Financial Details for 2023/24

For the tax year 2023/24, the allowance is set at £76.75 per week, with payment options available on a weekly or four-weekly basis. To qualify, applicants must have an external income of less than £139 per week after deductions for Income Tax, National Insurance, and specific work-related expenses.

Claiming the Allowance

Eligibility for Carer's Allowance is limited to one claim per carer, regardless of the number of individuals they care for. In addition to the financial benefit, claiming Carer's Allowance entitles the recipient to National Insurance credits, which can lead to further financial support and benefits, including:

  • Assistance from local councils
  • Council Tax reductions
  • Eligibility for Universal Credit for those on low incomes
  • Income support
  • Pension credit, among others

For more comprehensive information about National Insurance credits and their implications, visiting the HMRC website is recommended.

Tax Implications

While Carer's Allowance is technically subject to taxation, tax liability only arises if the recipient's total taxable income (including pensions, profits from self-employment, etc.) combined with the Carer's Allowance exceeds their Personal Allowance threshold. This nuanced approach ensures that the allowance supports those in genuine need without imposing undue financial burdens.

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