Thousands of unpaid UK carers set to have debts cut or cancelled following DWP intervention
Tens of thousands of unpaid carers will have their debts canceled or significantly reduced following the government’s comprehensive review into historic overpayments.
The Department for Work and Pensions (DWP) has announced it will re-examine nearly 200,000 cases of individuals owed money due to “confusing” earnings guidance.
Of these, the government estimates that around 25,000 carers will have their debts written off, reduced or reclaimed for amounts already paid.
This widespread issue, where individuals are penalized for exceeding the carer’s allowance earnings limit by even a few pence, has been condemned as a “scandal” by campaigners.
An independent review, carried out by former charity boss Liz Sayce and published last November, concluded that many carers felt they were “treated as criminals, resulting in feelings of fear and shame”.
Ministers have since accepted 38 of 40 recommendations, which identified “ill-defined” guidance and “systemic flaws” in the carer’s allowance system between 2015 and summer 2025, preventing accurate reporting of earnings.
The government confirmed that around half of the promised changes have already been implemented, with further reforms underway to modernize benefits and prevent similar problems in the future.
Historic overpayments have led to many carers – who have to earn £151 a week or less to qualify for the benefit – unknowingly accumulating unmanageable levels of debt, resulting in some leaving their jobs.
The earnings threshold rose to £196 net per week last April and rises again to £204 net per week for 2026/27.
Carer’s allowance of £86.45 per week is paid to someone who regularly spends at least 35 hours a week caring for an ill or disabled person.
The review said the “cliff edge”, which means someone who goes just a penny over the limit loses their entire benefit, has a “serious” impact on carers and acts as a disincentive to take up paid employment.
Officials say the DWP has all the information it needs to carry out a reassessment in most cases and carers do not need to contact the department themselves.
They said the department would contact individuals if more details were needed.
Work and Pensions Secretary Pat McFadden said: “We have inherited a system that has left unpaid carers accumulating debt through no fault of their own, and we are determined to fix it.
“Carers are vital to our communities and we are committed to taking action to rebuild their trust.”
Helen Walker, chief executive of Carers UK, said hundreds of carers were suffering “serious financial hardship and emotional distress” as a result of overpayments and further reform was “sorely needed”.
“We are pleased to see this Government taking decisive action to begin to correct the failures of the past and provide carers with the compensation they deserve.
“The reassessment process is an important step in combating these systemic failures,” he said.
“As we celebrate the 50th anniversary of carer’s pay this week, it is encouraging to hear that the Government is exploring other reform options.
“This is desperately needed to ensure that the contribution of unpaid carers is appropriately supported and recognised, whilst also protecting them from financial hardship.”
Carers Trust chief executive Kirsty McHugh said the reassessment would have a “huge impact” on carers who were “punished through no fault of their own”.
“It was reassuring to see the Government accept the vast majority of recommendations in the Sayce Review, while the £75 million allocated in last year’s budget is further evidence that the Government is serious about righting these wrongs,” he said.
