The Department for Work and Pensions has announced a major review of Carer's Allowance cases after an official investigation revealed systemic failures that left hundreds of thousands of unpaid carers facing devastating debt and financial hardship.
Systemic Failure Admits DWP
In a rare admission of widespread administrative failure, the DWP has accepted the majority of recommendations from an independent review conducted by disability expert Liz Sayce. The year-long probe uncovered that carers were required to repay penalties of up to £20,000 for accidentally breaching strict earnings limits by even a single penny.
The report revealed that administrative errors and 'maladministration' within the department led to carers being hit with repayment demands running into thousands of pounds. Many carers endured ill-health, anxiety, and bankruptcy as a direct result of these DWP mistakes.
Devastating Impact on Carers
At least 144,000 carers are currently repaying more than £251 million in overpayments, with total overpayments since 2019 estimated at £357 million. The investigation found that the DWP's failure to provide timely alerts meant some carers only discovered years later that they owed substantial sums.
Numerous carers described feeling treated like criminals, despite the review confirming that mistakes were almost always the result of official errors rather than deliberate wrongdoing. The so-called 'cliff-edge' rule means that exceeding the £196-a-week earnings threshold by even 1p triggers repayment of the full week's £83.30 allowance.
Government Response and Compensation Row
Welfare Secretary Pat McFadden stated that ministers were now "making good for those affected" and acknowledged inheriting "this mess from the previous Government." The Government plans to reassess all Carer's Allowance overpayments dating back to 2015, focusing on cases where part-time earnings caused claimants to be wrongly judged as exceeding the threshold.
However, campaigners have warned that the measures fall short, noting that no compensation will be offered to carers whose lives were upended by the debacle. This decision has been criticised despite widespread disruption that saw carers dragged through courts and debt collection proceedings.
Recent tribunal decisions in favour of carers Andrea Tucker and Nicola Green concluded that the DWP had misapplied its own rules on fluctuating earnings, casting doubt on years of prior decisions. Liz Sayce commented: "This wasn't wilful rule-breaking - it simply wasn't clear what earnings fluctuations carers should report."
Charities including Carers UK and Carers Trust welcomed the findings but warned that much work remains to fix a system that has mislabelled countless carers as overpaid for nearly a decade. The DWP now faces intense pressure to implement reforms quickly and ensure carers who shoulder the nation's care burden are not penalised for Government errors in the future.
