DWP set to give 150,000 Brits three-month warning before slashing benefits

The Department for Work and Pensions (DWP) has announced that it will introduce a grace period for around 150,000 people who are set to lose their entitlement to Carer’s Allowance under the new Universal Credit and Personal Independence Payment Bill

The Department for Work and Pensions (DWP) has revised its benefits revamp, ensuring that 150,000 carers won’t be hit with an immediate income drop.

Instead, individuals will be granted roughly three months to adjust to the loss of their allowance for caring for a partner, relative, neighbour or friend with a disability.

The DWP’s fresh Universal Credit and Personal Independence Payment Bill will tighten eligibility for PIP and freeze the incapacity payment that can be added to Universal Credit. This will subsequently lead to some people losing their entitlement to Carer’s Allowance.

To be eligible for Carer’s Allowance, one must provide care for at least 35 hours a week to someone who is on PIP’s daily living component or a similar benefit.

Hence, if a claimant loses their PIP payment under the new eligibility alterations, another person cannot claim Carer’s Allowance for looking after them, as reported by Birmingham Live, reports Cambridgeshire Live.

Some disabled couples or relatives on PIP are able to claim Carer’s Allowance for each other if they have different disabilities, so this could result in a double income drop for some households.

This could even escalate further in some cases, where multiple family members receive Carer’s Allowance for caring for either a parent or sibling. However, it cannot be claimed for the same person.

Projections from the Department for Work and Pensions (DWP) indicate that by 2029/2030, a staggering 150,000 individuals will lose their entitlement to Carer’s Allowance. This includes an initial 10,000 in 2026/2027 following the implementation of changes to the Personal Independence Payment (PIP) in November 2026.

In a modification to the proposed legislation, the DWP has incorporated a 13-week transitional period for those who lose their Carer’s Allowance. This provision allows them to continue receiving the allowance for an additional 13 weeks, offering a window to restructure their finances, seek job support, and explore alternative income streams to offset the loss.

At present, over a million people are claiming Carer’s Allowance, with Birmingham topping the list of claimants at 30,177, the highest figure in any local authority area across Britain.

Carer’s Allowance is disbursed at a weekly rate of £83.30, amounting to £333.20 every four weeks when credited into accounts. If a claimant also receives Universal Credit, a monthly deduction of £360.97 is applied, effectively cancelling out any financial advantage from receiving both concurrently.

However, this can be partially offset by applying for the Carer’s Element within Universal Credit, which totals £201.68 per month.

It’s important to note that eligibility for the UC Carer’s Element ends once a person loses their Carer’s Allowance.

Moreover, the termination of Carer’s Allowance and/or the Universal Credit Carer’s Element means that individuals will no longer be exempt from the benefit cap. The Department for Work and Pensions (DWP) has forecasted that this knock-on effect will likely have a “small impact.”

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