Carers' Allowance Scandal Prompts Major Government U-Turn
The government has pledged to reassess all cases involving unpaid carers who were slapped with massive debts due to systemic failures in the benefits system. This follows a damning independent review published on Tuesday that found the Department for Work and Pensions issued flawed guidance to thousands of people claiming Carer's Allowance.
The 'Cliff Edge' Rule That Created Massive Debts
Carer's Allowance, currently worth £83.30 per week, is paid to individuals who provide at least 35 hours of weekly care. To qualify, their other earnings must not exceed a specific threshold, which was £151 per week between 2015 and summer 2025. The system operated a "cliff edge" limit, meaning carers had to repay the entire weekly allowance if their earnings exceeded the threshold by even a single penny.
This rule caused debts to rapidly accumulate into thousands of pounds for many carers. The earnings threshold has since increased to £196 per week from April this year.
Lives Turned Upside Down by DWP Letters
The review, led by disability rights expert Liz Sayce, concluded that many carers felt "treated as criminals, with resulting feelings of fear and shame." The report found the DWP "failed to act systematically on previous reports" that could have prevented these overpayments.
Carer Emma Martin described feeling sick when a letter from the DWP arrived at her home in 2015 demanding £1,500. "I literally just got a letter dropped on my front doorstep," she told The Mirror. Martin, who cares for her 28-year-old daughter Mia who has autism and epilepsy, had exceeded the earnings limit by a "silly amount" for a few months while working part-time as a nursery teacher.
"It could have only been 50p. But for that 50p they would take the whole month's carers' allowance away," she explained, adding she received no prior warnings from the DWP.
Government Pledges to 'Right These Wrongs'
The DWP has accepted that unpaid carers were let down by confusing rules. Where overpayments are found to be lower than originally calculated, carers will have their debts reduced or cancelled entirely, with any money already repaid being refunded.
Chancellor Rachel Reeves stated: "We will right these wrongs, carers give so much to their families and to their local communities, and they deserve our support."
Work and Pensions Secretary Pat McFadden acknowledged: "Carers are vital to our communities, and when the system lets them down, we have a duty to put it right. We inherited this mess from the previous government, but we've listened to carers, commissioned an independent review, and are now making good for those affected."
Liz Sayce commented: "My review found that overpayment debt has had major impacts on carers' health, finances and family well-being. I'm glad government now plans to review cases and cancel or reduce debts affected by flawed guidance."
Helen Walker, Chief Executive of Carers UK, welcomed the announcement as "a really important day for carers," while Liberal Democrat leader Sir Ed Davey called for an apology and compensation for those affected.
