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<p>The primary purpose of Carer's Allowance is to provide a measure of financial support
and recognition for people who give up the opportunity of full-time employment in
order to provide regular and substantial care for a severely disabled person. It is
not, and was never intended to be, a carer’s wage or a payment for the services of
caring, nor is it intended to replace lost or forgone earnings in their entirety.</p><p>
</p><p>The earnings limit for Carer's Allowance is a net figure which is the figure
left once income tax, National Insurance contributions and half of any contributions
to an occupational or personal pension are deducted from earnings. There are also
a number of other deductions which can be made that mean that people can earn significantly
more than £110 per week and still be eligible for Carer's Allowance.</p><p> </p><p>The
Carer's Allowance earnings limit is not linked to the number of hours worked. Instead,
it is set at a level that aims to encourage those who give up full time work in order
to undertake caring responsibilities to maintain a link with the labour market through
part time work.</p><p> </p><p>Whilst the Government does not link the earnings limit
to any other particular factor (including the National Living Wage), we do keep it
under regular review and increase it when it is warranted and affordable, and this
will continue to be our approach. Most recently in April 2015 the earnings limit was
increased by 8% to £110, far outstripping the general increase in earnings.</p><p>
</p><p>For those carers working around 16 hours a week on a low income and receiving
Working Tax Credit, Carer's Allowance is taken fully into account as income. That
means that any loss in Carer's Allowance is likely to be offset by an increase in
Working Tax Credit, and this is one of the changes of circumstances that results in
an immediate change to Tax Credits. Going forward the earnings taper in Universal
Credit will help ensure that people are always better off in work.</p>
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