Unpaid carers face ‘benefits cliff edge’ under universal credit, say MPs

Carers could lose almost £65 a week in Carer's Allowance if they move into paid employment or take on more hours.

The Work and Pensions Select Committee has warned that many of the UK’s 6.5 million carers face losing almost £65 a week under Universal Credit, with MPs urging the UK Government to remove the “cliff-edge” that will deter carers from looking for work or increasing hours worked.

Under the new system, which sees a number of existing social security benefits and tax credits replaced with a single payment, family carers face losing eligibility for Carer’s Allowance if they earn more than £120 a week.


MPs claim this is “a clear contradiction to Government’s stated aims of ‘making work pay’“, with those affected immediately missing out on £64.60 per week in Carer’s Allowance as soon as they exceed the £120 a week earnings threshold.

Those affected also face the enviable decision of having to choose between losing Carer’s Allowance or losing free childcare for their three or four-year-old, the cross-party Committee says, because Universal Credit rules require them to work a minimum 16 hours a week.

The Committee argues that whilst the roll-out of Universal Credit still has a way to go, it may disincentivise work for carers unless ministers recognise the problem and make changes.

It is believed that carers save the UK economy an estimated £132 billion a year, due to providing unpaid care for family members and love-ones which would otherwise have to be paid for by the state.

“They are indispensable to the person they care for and vital to society”.

According to the Commitee’s report published today, around 1 in 9 working people have to juggle care with paid work. However, only a third of working age carers are currently in full-time work, compared with almost half of non-carers.

“One in six carers have at some point given up work to take on caring responsibilities, and almost three million have reduced their working hours”, MPs claim, with a large number of carers already believing that juggling caring and work is too difficult and not worth the effort.

The Committee says that more carers more carers could be encouraged to enter, or stay in, employment if they were able to convince employers of the benefits of flexible working, or were better supported when forced to take time off for appointments and emergencies.

However, under existing legislation they are required to have worked for the same employer for a minimum of six months before they can request flexible working patterns.

They can also made to sacrifice annual leave or sick days in the event of having to take time off work to fulfil caring responsibilities, the Commitee says.

MPs have called on the UK Government to (as quoted):

  • withdraw Carer’s Allowance gradually as income rises, in line with the Universal Credit taper system.
  • link the earnings threshold is to rises in the National Living Wage
  • allow carers to request flexible working from day 1 of their employment
  • when resources allow, introduce a statutory 5 days paid carer’s leave
  • act as model-employer itself: at present just six government departments are members of the Employers for Carers forum and only five have specific carer policies

Frank Field MP, Chair of the Work and Pension Committee, said: “Carers are heroic and undervalued. They are a great untapped resource for our high employment, low productivity economy – and a sorely unrecognised one.

“They contribute hundreds of billions of pounds in unpaid work to our economy which is not counted on any Treasury balance sheet.

“Ensuring work pays and that employers adapt to accommodate caring is not just good for the carers: it is necessary for the whole economy. Government should lead on both practice and policy.”

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