Unpaid carers to have benefit overpayments reviewed - and maybe cancelled

Unpaid carers who fell into debt because of unclear benefits guidance will have their cases looked at again.

If you claimed carer’s allowance and earned even a penny over the weekly limit of £151, you may have been asked to repay the full amount.

But an independent review has found that the guidance on claiming the carer’s allowance between 2015 and summer 2025 was unclear and confusing.

This meant many claimants didn’t know when they breached the weekly earnings limit.

As a result, people balancing 35 hours of care alongside paid work accidentally built up overpayments and were later told they owed money to the government.

Government ‘wants to put things right’

The government has accepted the review’s findings and said cases will be reassessed to check if overpayments were correctly calculated.

If it’s found that carers were overcharged, debts will be reduced or completely cancelled.

Anyone who has already repaid money will be refunded.

“Carers are vital to our communities, and when the system lets them down, we have a duty to put it right,” said work and pensions secretary Pat McFadden.

“The guidance on earnings averaging was confusing. 

“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.

“Rebuilding trust isn’t about warm words - it’s about action, accountability, and making sure our support works for the people who need it most.”

What do I need to do if I’m affected?

In most cases, you won’t need to do anything.

The Department for Work and Pensions (DWP) will automatically reassess your case and contact you if your overpayment is reduced or refunded.

If you’ve already paid off your overpayment, you’ll still be included in the review. 

The government says it will release more details on how people can check their case or request an additional review soon.

Improvements have already been made

The government says it has already made immediate improvements following the review, including:

• updating internal guidance so staff correctly record and explain decisions about fluctuating wages
• hiring more staff to deal with earnings notifications quickly, helping prevent debts from building up
• making sure letters are easier to understand and clearer about what needs reporting

“This wasn’t wilful rule-breaking,” said Liz Sayce, who led the review.

“It simply wasn’t clear what earnings fluctuations carers should report.

“I’m pleased DWP has tackled the backlog of earnings data, so people shouldn’t suddenly face large debts going back years.”