Carer's Allowance and Universal Credit Deduction for Kinship Carers

If you are a kinship carer looking after a child who receives Disability Living Allowance at the middle or high care rate, you may qualify for Carer's Allowance. But here is the trap that catches thousands of carers every year: Carer's Allowance of £86.45 per week is deducted pound-for-pound from your Universal Credit. You claim it, DWP takes it straight back off your UC award, and you end up with roughly the same total income — but now with an extra benefit to report changes for.

The UC Carer Element works differently, and understanding the distinction matters.

How the Deduction Works

Carer's Allowance is classified as unearned income for Universal Credit purposes. When DWP calculates your UC award each assessment period, they subtract the full amount of any Carer's Allowance you received. At £86.45 per week (roughly £374.62 per month), that wipes out almost all of the gain.

Meanwhile, the UC Carer Element — £209.34 per month in 2026/27 — is added to your UC maximum award when you report your caring role and meet the criteria. It is not deducted from anything. It simply increases the total UC you receive.

So Why Claim Carer's Allowance at All?

There are two situations where claiming Carer's Allowance alongside UC still makes sense:

National Insurance credits. Carer's Allowance gives you Class 1 NI credits toward your State Pension. If you are under State Pension age and not working enough to earn NI credits through employment, these credits protect your pension record.

The Benefit Cap exemption. If your household UC award is being capped (£1,835/month outside London, £2,110.25/month in London for families), having an underlying entitlement to Carer's Allowance lifts the cap entirely — even though the payment itself is deducted from UC.

The Earnings Trap

Carer's Allowance has a strict net earnings limit of £204 per week. Earn a penny over that, and you lose the entire benefit — not a gradual taper, but a cliff edge. The UC Carer Element has no separate earnings threshold. Your earnings reduce your UC through the standard 55p-per-pound taper, but the Carer Element itself stays in your award as long as you provide 35 or more hours of care per week.

For kinship carers who work part-time around school hours, this makes the UC Carer Element significantly more flexible.

What Kinship Carers Should Do

If the child you care for receives DLA Middle or High Care (or PIP Daily Living), report your caring role through your UC journal. DWP should add the Carer Element to your award. Whether you also claim Carer's Allowance separately depends on whether you need the NI credits or the Benefit Cap exemption.

If you are over State Pension age, you may be able to get an extra amount in Pension Credit if you qualify for Carer's Allowance.

Our kinship financial help guide includes a worked example showing the exact monthly difference between claiming Carer's Allowance with UC versus relying on the Carer Element alone, plus a decision tree for when claiming both makes sense.

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