Martin Lewis confirms 'good news' for 1.4 million people claiming DWP benefit

Martin Lewis has announced that there is "good news" coming for people who claim a weekly benefit of £82 from the Department of Work and Pensions (DWP).

The money saving expert said he has had it confirmed that the government will announce a change to the earnings threshold for Carers Allowance in tomorrow's Autumn Budget statement. The Budget is set to be delivered by chancellor Rachel Reeves after PMQs in the House of Commons.

Carers Allowance is a weekly benefit of £81.90 for people who care for someone for at least 35 hours a week. If a claimant is working and earns more than £151 a week, they are not eligible for the payment.

READ MORE: DWP and HMRC benefits and pension changes expected in the Autumn Budget

According to Mr Lewis, the DWP is set to announce that the earnings threshold will rise by "over £30 extra a week" from next April, so that claimants can earn as much as £181 a week before having the benefit taken away.

Announcing the news on X, formerly Twitter, Mr Lewis told his followers: "Good news. The Carers Allowance earnings threshold will be increased from £151 to at least £181 in the Budget tomorrow, starting April 2025. So carers can earn more and still receive the allowance."

He said he is yet to hear whether the DWP plans to increase the payment rate. Ms Reeves is expected to make a decision on how much benefits paid by the DWP and HMRC will rise by next year. If September's inflation figure is used to calculate the uprating, as it usually is, payments could be rising by just 1.7 per cent.

Mr Lewis has been campaigning for the DWP to put an end to what he describes as the "cliff edge" approach to the earnings threshold for Carers Allowance. The finance expert wants to see the department replace the earnings threshold - which sees claimants lose the entirety of their payment for that week when they go over it, even by as little as 1p - with a tapered system.

Other benefits, such as Universal Credit, already use a tapered system where the payment amount decreases as earnings go up.

The DWP has come under fire in recent months for demanding carers pay back benefit overpayments, which sometimes amount to thousands of pounds. Charities have argued that the system is unfair as many carers do not realise they have gone over the earnings threshold, resulting in an overpayment.

Earlier this month, the government announced it was launching an urgent review to resolve the issue.

It came after Mr Lewis wrote to the chancellor asking her to address the "broken, old-fashioned, unjust" structure of Carers Allowance, describing the "cliff edge" approaching to stopping payments as "perverse".

He told her: "Most benefits, including Universal Credit, have a taper, so if you go over the threshold, the payment received is gradually reduced. Carer's Allowance only has a cliff-edge, leaving many to plummet off.

"Worse, the system seemingly sets people up to slip over the threshold unwittingly. Many on Carer's Allowance need to restrict any working hours to avoid hitting it (a strange disincentive to work), yet if their wage increases slightly, eg, when the annual minimum wage increases, they can fractionally bust the threshold.

"If that happens, the terrible disconnectedness and poor benefits systems mean they're often still paid the allowance for months, or even years. Then, even though they may have only earned a pound or two more, they're later asked for unaffordable £100s or £1,000s back."

Announcing the review, a spokesperson for the DWP said: "We recognise the challenges carers are facing and we are determined to provide unpaid carers with the support they need and deserve. This is why we have launched a review into Carer's Allowance overpayments to get to the bottom of how overpayments have occurred and to prevent people who devote such time and care to others from facing similar difficulties in future."