Some people were ordered to repay thousands of pounds to the DWP and pushed into serious debt after they breached an earnings threshold
Thousands of unpaid carers who were ordered to repay thousands of pounds after falling victim to confusing earnings rules are set to have their debts reduced, cancelled, or refunded.
Carer’s Allowance is worth £86.45 a week and is awarded if you care for someone at least 35 hours a week and they claim certain benefits, such as Personal Independence Payment.
But some people were ordered to repay thousands of pounds to the Department for Work Pensions (DWP) and pushed into serious debt after they unknowingly breached a “cliff edge” earnings threshold.
You can work and claim Carer’s Allowance at the same time – but if your earnings go over the limit, even by just £1, you lose your entitlement to Carer’s Allowance.
This was slammed by charities as being difficult to follow, especially in incidences where someone’s wages fluctuate from week to week.
The earnings limit used to be just £151 a week after tax, National Insurance, pension contributions and allowable expenses.
It was raised to £196 in April 2025, then to £204 in April 2026. The Department for Work and Pensions (DWP) has now revealed it will review over 200,000 cases.
The department said around 25,000 carers could see their debts reduced, cancelled entirely, or receive refunds where money has already been repaid.
In most cases, carers should not need to get in contact with the DWP and will only be contacted if the department needs more details.
The move follows ministers’ acceptance of 38 of the 40 recommendations made by the independent Sayce Review into Carer’s Allowance overpayments in November 2025.
The review found that between April 2015 to September 2025, guidance on how to average irregularly fluctuating earnings was unclear and did not accurately reflect the law.
It said carers juggling paid work alongside care had built up debts without realising, in what was described as a failure of the system.
Secretary of State Pat McFadden said:“We inherited a system that left unpaid carers building up debt through no fault of their own, something we’re determined to put right.
“That’s why we accepted the vast majority of the Sayce Review’s recommendations and are now getting to work implementing them, kicking off the reassessment exercise to review cases impacted by unclear guidance.
“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: “We are pleased to see this government taking decisive action to start putting right the failings of the past and provide carers with the redress they deserve. The reassessment process marks an important step in tackling these systemic failures.
“Carers UK has been campaigning on the issue of Carer’s Allowance overpayments for more than seven years, and during that time we have heard from hundreds of carers who have experienced severe financial strain and emotional distress as a result.
“As we mark the 50th anniversary of Carer’s Allowance this week, it is encouraging to hear that the government is also exploring further options for reform.
“This is sorely needed to ensure that it properly supports and recognises the contribution of unpaid carers, while protecting them from financial hardship.”
