Government U-Turn on Carer's Allowance Debts
The Department for Work and Pensions (DWP) has announced a major overhaul, pledging to reassess the cases of 300,000 benefit claimants following a damning independent review. This decision comes after a year-long investigation uncovered widespread maladministration within the Carer's Allowance system, which plunged hundreds of thousands of unpaid carers into debt and hardship over the last decade.
A System Plagued by Confusion and Error
The review, led by disability expert Liz Sayce, exposed a system riddled with flaws. Carers were hit with harsh repayment demands, sometimes for thousands of pounds, for unknowingly breaching a strict earnings limit by minuscule amounts—in some cases, by as little as one penny. The DWP has now accepted most of the recommendations from the report, admitting to significant failures.
Many carers faced repayments of up to £20,000, with the situation leading to severe anxiety, ill-health, and even bankruptcy for some. The review concluded that these overpayments were typically the result of official error, not deliberate wrongdoing by the carers, who often felt they were being treated like criminals.
The 'Cliff-Edge' Rule and Its Consequences
The core of the problem lies in the Carer's Allowance's "cliff-edge" rule. The allowance is £83.30 a week, but if a carer's earnings exceed the £196-a-week threshold by even a penny, they must repay the entire week's allowance. This punitive rule, combined with the DWP's failure to warn carers in real-time despite having access to their wage data, meant many only discovered they owed money years later.
Currently, 144,000 carers are repaying more than £251 million in overpayments. Total overpayments since 2019 are estimated at a staggering £357 million. The government will now reassess all Carer's Allowance overpayments dating back to 2015, focusing on cases where fluctuating part-time earnings led to carers being incorrectly deemed to have breached the threshold.
Campaigners Welcome Move But Demand More
Welfare Secretary Pat McFadden stated that ministers are now "making good for those affected," blaming the previous government for the mess. However, campaigners argue the move does not go far enough, as the government has dismissed calls for compensation for those who suffered severe stress and financial ruin.
Charities like Carers UK and Carers Trust welcomed the review's findings, stating it recognised "the gravity of system failures." The scandal has been repeatedly compared to the Post Office Horizon debacle, with internal warnings allegedly being ignored for years while families were taken to court and pursued by debt collectors.
The DWP now faces immense pressure to implement this overhaul swiftly and ensure that the families who bear the nation's care burden are never again left to foot the bill for government errors.
