Thousands of unpaid carers to face DWP repayment demands during overhaul | Carer’s allowance
Thousands of unpaid carers will continue to face burdensome and potentially unfair benefit repayment claims as a government initiative is launched to fix welfare injustices that have been compared to the Post Office scandal, it has emerged.
Ministers will launch an audit of more than 200,000 past carer’s allowance benefit cases on Monday, with an estimated 25,000 carers who were illegally overpaid since 2015 likely to have their repayment debts canceled or reduced as a result.
The so-called revaluation exercise marks a major step in the government’s attempt to “fix” the systemic injustices that have left hundreds of thousands of vulnerable carers with debts of up to £20,000 through no fault of their own.
However, the government has acknowledged that current “business as usual” overpayment recovery policies will be maintained while the full overhaul of the benefit is completed, so carer’s allowance penalties will continue to apply.
Moreover, it is still unclear how ministers will compensate thousands of carers who have been illegally overpaid due to long-running system errors linking universal credit and carer’s allowance, or who have been wrongly told to repay money after authorities lost evidence that they had reported a change in their earnings.
Nearly 22,500 care benefit claimants were overpaid in the three months after an independent review was published. freedom of information request It was published this month.
These include a pile of overpayments identified in 2025 and handed out by authorities to around 1,400 carers in January despite knowing that their decision to penalize carers was based on illegal and discredited earnings averaging guidance, which was officially stopped by the Department for Work and Pensions (DWP) in September.
The government took action last year after an award-winning Guardian investigation revealed that senior welfare officials and Conservative ministers had ignored warnings for years that carers were being unfairly driven into debt and their health suffered, and in some cases were convicted of fraud because of glitches in the carer’s allowance system.
The £75 million two-year reassessment, which will focus solely on cases where carers have been unlawfully prevented from averaging their annual earnings to avoid earnings penalties, has been welcomed by Liz Sayce, author of the government-commissioned independent review into carer allowance overpayments.
Its scathing report, published in November, found that system failures and management shortcomings at the DWP had caused avoidable hardship and distress to hundreds of thousands of carers and resulted in hundreds of millions of pounds of public money being wasted.
It has been revealed that one in five unpaid carers claiming carer’s allowance and working part-time were exposed to overpayments totaling more than £300 million between 2019 and 2024 alone, with hundreds receiving criminal convictions for fraud.
Disability rights expert Sayce said: “I’m delighted [the DWP] We are starting the re-evaluation work. “The fact that this is happening is the result of everything carers have been working on and everything the Guardian has reported on.”
Social care minister Pat McFadden said: “We have inherited a system that has caused unpaid carers to accumulate debt through no fault of their own, which we are determined to fix. That’s why we’ve accepted the vast majority of the recommendations of the Sayce review and are now starting to implement them.”
While ministers have been clear that carer allowance needs to be reformed, the DWP hierarchy has struggled to convince MPs and campaigners that it has the credibility to fix benefits and gain the trust of carers. Sayce himself expressed frustration with the presence of “resistance forces” in the department.
Helen Walker, chief executive of Carers UK, said: “We are pleased to see this government taking decisive action to start to fix the failings of the past and provide carers with the compensation they deserve. The reassessment process marks an important step in tackling these systemic failures.”
Kirsty McHugh, chief executive of the Carers Trust, said: “It is encouraging to see the government doing the right thing by admitting its mistakes and now starting to return money to carers who have been punished through no fault of their own. This is an important first step in solving the numerous problems with this legacy benefit.”
