Carer's Allowance to be abolished, says Business Secretary - but admits 'fairer' tapered system 'won't be fully operational until 2030'

Business Secretary Jonathan Reynolds has said Carer’s Allowance will be replaced by a “fairer” tapered system — but admitted the reform will not be fully operational until 2030. Under the current system, carers can lose the entire £83.30-a-week payment if they earn even slightly above the eligibility limit. Mr Reynolds told Nick Ferrari at Breakfast on LBC: "There is a particular problem with it, which is if you go one penny over the eligibility criteria, you lose the whole thing, unlike other benefits where it would taper out pound for pound."

Chancellor John Healey is expected to end the Carer's Allowance cliff edge which has penalised unpaid carers for going over their earnings limit, even by as little as a few pence per week. The sudden end in support for breaching the limit, widely described as a scandal by campaigners, will be replaced by a taper, so the benefit will decrease by £1 for every additional pound earned. Mr Reynolds added: “We’re going to look through everything we can do, big or small, to try and make a difference to people’s lives.”

Read More: Burnham forced to row back defence spending promise - as rivals call for PM to lay out plans for 3% of GDP by 2030 at Budget Read More: What could be in the Budget 2026? The options available to John Healey Ministers made the announcement as they set out a series of “everyday fixes” to help people with the cost-of-living crisis, which are expected to feature in Wednesday’s Budget. “It’s going to be a fairer system and it will taper like other benefits, so you’re not in the position where actually sometimes you weren’t even planning to go over the amount and you lose the whole thing,” he said.

“And that’s a real sense of grievance, understandably, that comes from that.” Mr Reynolds said the change would take time to introduce and was expected to be fully operational by 2030. “It will take some time to come in,” he said. “I believe it will be fully operational by 2030. I know people will want that to be sooner, but that is how that benefit is paid.” The reform forms part of a wider package of measures intended to give families and businesses “breathing space”, Mr Reynolds said.

Prime Minister Andy Burnham said: “We are taking on the big challenges facing the country but that doesn’t mean losing sight of the everyday problems that cost people money or simply aren’t fair. “If you’re a nurse driving for work, a parent spending those precious first weeks with your new baby, or an unpaid carer picking up an extra shift, these changes will make life a little easier and put more money back in your pocket.” Mr Burnham, who is now in his 100th day in office, has announced a series of steps to help people and businesses with living costs since he came to power.

These include cutting VAT on energy bills this winter, and slashing business rates for pubs and clubs. The Prime Minister said the Government will “go further to give families and businesses the breathing space they need” at the Budget on Wednesday.