The DWP confirmed it will review thousands of Carer’s Allowance cases (Image: Getty)
Some 200,000 people who owed money as a result of “confusing” earnings guidance for Carer’s Allowance will have their cases reviewed again, the Department for Work and Pensions said.
The Government estimated that about 25,000 carers among these will have their debts cancelled or reduced, or receive refunds for money they have already repaid. Carer’s Allowance, which is £86.45 a week, is paid to someone who spends at least 35 hours a week regularly caring for someone with an illness or disability. However, someone earning just a penny over the minimum earnings threshold lost their entire allowance, which campaigners have branded a “scandal”.
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Historic overpayments led to many carers unwittingly racking up unmanageable levels of debt, and some quit their jobs as a result.
The so-called “cliff edge” had a “severe” impact on carers, and acted as a disincentive to take on paid work, according to an independent review led by former charity boss Liz Sayce last November. It concluded that many carers felt they were “treated as criminals, with resulting feelings of fear and shame”.
Carers previously had to earn £151 a week or less to qualify for the allowance, which rose to £196 a week last April, and again to £204 net per week for 2026/27.
Ministers accepted 38 out of 40 recommendations in the report, which found that between 2015 and summer 2025, Carer’s Allowance guidance was “ill-defined”, while “systemic flaws” prevented many from properly reporting their earnings.
The Government said about half of the promised changes have already been made, with further reforms under way to modernise the benefit and prevent similar problems in future.
Officials said that DWP has all the information it needs to carry out the reassessment in most cases, and that carers do not need to contact the department themselves. The department will contact people if any further details are needed, they said.
Work and Pensions Secretary Pat McFadden said: “We inherited a system that left unpaid carers building up debt through no fault of their own, something we’re determined to put right. Carers are vital to our communities and we are committed to taking action to rebuild their trust.”
Carers UK chief executive Helen Walker said hundreds of carers had suffered “severe financial strain and emotional distress” as a result of the overpayments and that further reform was “sorely needed”.
“We are pleased to see this Government taking decisive action to start putting right the failings of the past and provide carers with the redress they deserve. The reassessment process marks an important step in tackling these systemic failures,” she said.
“As we mark the 50th anniversary of carer’s allowance this week, it is encouraging to hear that the Government is also exploring further options for reform.
“This is sorely needed to ensure that it properly supports and recognises the contribution of unpaid carers, while protecting them from financial hardship.”
Carers Trust chief executive Kirsty McHugh said the reassessment would have a “huge impact” on carers “who were penalised for no fault of their own”.
“It has been reassuring to see the Government accept the vast majority of the recommendations of the Sayce Review, whilst the £75 million allocated by last year’s budget is further evidence the Government is serious about righting these wrongs,” she said.
