Thousands of Unpaid Carers to Have Debts Cancelled After DWP Review
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. This follows a Department for Work and Pensions (DWP) review that will examine over 200,000 cases, with around 25,000 carers potentially benefiting from the reassessment exercise.
Confusing Earnings Rules Led to Serious Debt
Carer's Allowance is worth £86.45 a week and is awarded to individuals who care for someone at least 35 hours a week, provided the person they care for claims certain benefits like Personal Independence Payment. However, many carers were pushed into serious debt after unknowingly breaching a "cliff edge" earnings threshold. You can work and claim Carer's Allowance simultaneously, but if your earnings exceed the limit, even by just £1, you lose your entitlement entirely.
Charities have long criticised this system as being difficult to follow, particularly for those with fluctuating weekly wages. The earnings limit was previously set at £151 a week after tax, National Insurance, pension contributions, and allowable expenses. It was increased to £196 in April 2025 and then to £204 in April 2026, but the confusion persisted for many.
DWP Review and Implementation of Recommendations
The DWP has now revealed it will review cases impacted by unclear guidance on how to average irregularly fluctuating earnings. This move comes after ministers accepted 38 of the 40 recommendations from the independent Sayce Review into Carer's Allowance overpayments in November 2025. The review found that between April 2015 and September 2025, the guidance did not accurately reflect the law, leading to carers building up debts without realising it—a failure described as systemic.
In most cases, carers should not need to contact the DWP and will only be reached out to if the department requires additional details. The reassessment aims to provide redress for those affected by past errors.
Government and Charity Responses
Secretary of State Pat McFadden stated, "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, expressed relief at the government's decisive action. "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," she said. Walker added that Carers UK has campaigned on this issue for over seven years, hearing from hundreds of carers who faced severe financial strain and emotional distress.
As the 50th anniversary of Carer's Allowance is marked this week, Walker noted it is encouraging that the government is exploring further reform options. "This is sorely needed to ensure that it properly supports and recognises the contribution of unpaid carers, while protecting them from financial hardship," she concluded.
