The government will abolish a controversial benefits rule that caused unpaid carers to lose significant sums when they earned just above a weekly threshold, the Guardian can reveal. Chancellor John Healey is set to announce a new digital taper for carer’s allowance in Wednesday’s budget, effectively ending what campaigners and officials have described as a punitive "cliff-edge" in the system.
Under the existing arrangement, carers who exceeded a prescribed earnings limit could see their carer’s allowance withdrawn abruptly, sometimes resulting in penalties running to thousands of pounds. Critics have long argued that the mechanism discouraged additional work and left vulnerable households exposed to sudden income shocks.
The digital taper will phase out the benefit more gradually as recipients’ earnings increase, allowing carers to earn above the current weekly threshold without an immediate and total loss of carer’s allowance. Details of the technical design, including how income will be assessed and over what period the taper will operate, are expected to be set out by the chancellor when he delivers the budget.
The policy shift follows a Guardian investigation that highlighted the scale of the financial harm caused by the rule. The paper said the change will remove one of the most feared and criticised administrative practices in the UK benefits system. The government has framed the move as a modernization of benefit administration, using digital tools to create a smoother, more responsive interface between earnings and support.
Advocates for carers and welfare reformers have long campaigned for a system that avoids abrupt losses of entitlement; the new taper is intended to address those concerns by reducing the incentive to limit paid work to retain means-tested support. The budget announcement will be watched closely for the precise implementation timetable and any additional measures aimed at supporting unpaid carers.
Further details are expected when the chancellor presents the full budget, which will include the legislative and operational steps required to introduce the digital taper and to ensure recipients are informed and protected during the transition.