The Department for Work and Pensions (DWP) has announced a major policy shift that will bring relief to thousands of unpaid carers across the UK. The government department has pledged to review all Carer's Allowance overpayment cases linked to confusing earnings rules that were in place from 2015 until the summer of 2025.
Addressing Systemic Failures
This significant move comes in response to the independent Sayce Review, which uncovered that unclear guidance on averaging fluctuating earnings prevented carers from understanding what changes to their pay needed to be reported to the DWP. The review found that this lack of clarity meant tens of thousands of people, who were juggling 35 hours of care with paid work, built up substantial debts without realising they had breached the weekly earnings limit.
Work and Pensions Secretary Pat McFadden stated: "Carers are vital to our communities, and when the system lets them down, we have a duty to put it right. The Sayce Review has shown us clearly that 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 Through Action
The review concluded that repeated failures by previous ministers and welfare officials had pushed hundreds of thousands of unpaid carers into debt and distress, while also leading to hundreds of millions of pounds of taxpayers’ money being wasted. The government has now committed to fixing these inherited system failures as part of its Plan for Change.
Most carers will have their cases reassessed automatically without needing to contact the DWP. Importantly, the department has confirmed that carers who have already repaid their debts will still be able to have their cases reassessed, with further details on the process to be announced shortly.
Government Commitment to Change
Chancellor of the Exchequer Rachel Reeves described the announcement as "welcome news for thousands of carers failed by the system under the previous government." She added: "We will right these wrongs. Carers give so much to their families and to their local communities, and they deserve our support."
Independent reviewer Liz Sayce, whose report contained 40 recommendations - the vast majority of which have been accepted by the government - commented: "My review found that overpayment debt has had major impacts on carers’ health, finances and family well-being, and been a disincentive to work. I’m glad Government now plans to review cases and cancel or reduce debts affected by flawed guidance. This wasn’t wilful rule-breaking – it simply wasn’t clear what earnings fluctuations carers should report."
The DWP has also tackled the backlog of earnings data, which should prevent people from suddenly facing large debts going back years in the future.
