The Department for Work and Pensions (DWP) demanded repayment of £33 million from unpaid carers last year, with some individuals facing debts exceeding £20,000. Official figures obtained under Freedom of Information laws show 32,559 earnings-related overpayments were identified in 2025-26, despite promised reforms to the Carer's Allowance system.
More than half of all overpayments exceeded £500, affecting around 16,000 cases that went unchecked for weeks or months. Some 1,166 carers accumulated debts over £5,000, potentially exposing them to fraud investigations. The number of carers owing more than £20,000 rose from 46 to 78 over the year.
Systemic Issues Persist Despite Reforms
The DWP reduced both the number and value of overpayments by around 30% in 2025-26 after introducing changes to identify problems more quickly. However, campaigners argue the figures demonstrate tens of thousands of carers are still being caught by a system likened to the Post Office Horizon scandal.
Carer's Allowance is paid to people providing at least 35 hours of care weekly for someone with substantial needs. The benefit is worth £86.30 a week, one of the lowest state benefits. The controversy centres on a strict earnings limit: if carers earn above the threshold, they lose the entire weekly payment rather than just the excess, allowing overpayments to mount rapidly.
The DWP promised sweeping reforms nearly two years ago after widespread criticism. An independent review published last December concluded that 'systemic issues' inside the department, not deliberate wrongdoing by carers, lay behind the scandal. It described the system as opaque, punitive and poorly managed, with serious consequences for carers' finances and mental health.
Government Promises vs Reality
The Government pledged to review thousands of historical overpayment decisions and accepted most of the review's recommendations. It increased the earnings threshold and promised faster electronic earnings alerts to prevent escalating debts. However, the latest figures suggest significant numbers of carers still accumulate substantial overpayments.
Anna Dixon, Labour MP and chair of the All-Party Parliamentary Group on Carers, said: 'I hope the Department for Work and Pensions will investigate why the numbers remain so high and be transparent with carers and parliament about the scale of this problem and what it intends to do to put it right.'
Emily Holzhausen, director of policy at Carers UK, said: 'We need to see a clear explanation from the government as to why recoverable amounts for some people are so high after it made a promise to investigate 100% of VEPs. It is unacceptable this level of debt is being allowed to mount up.'
Dominic King-Carter, director of policy at Carers Trust, added: 'The data bring continued uncertainty to carers who fear they will be caught up in the system. We can now see this is an even bigger challenge than we previously thought.'
Impact on Unpaid Carers
England and Wales rely on an estimated 5 million unpaid carers to look after elderly, disabled and vulnerable relatives, with around a third claiming Carer's Allowance. The DWP said: 'We understand the huge difference unpaid carers make and are determined to provide them with the support they need and deserve. That's why we've taken action to fix the broken Carer's Allowance system we inherited, including identifying and stopping overpayments more quickly through VEPs, delivering the biggest ever cash increase in the earning threshold, uprating the benefit, and accepting the vast majority of the Sayce review's recommendations.'
