In response to growing criticism and widespread hardship among unpaid carers, the UK Department for Work and Pensions (DWP) has announced a major overhaul of its Carer’s Allowance system. This comes after it was revealed that more than 136,000 carers across the UK were hit with overpayment debts totalling over £250 million due to administrative failings and a lack of proactive checks.
What Went Wrong With Carer’s Allowance?
Carer’s Allowance is a benefit for people who provide at least 35 hours of unpaid care per week to someone with a disability or long-term illness. As of early 2025, the earnings limit for receiving the allowance was £151 per week (after tax and expenses). Exceeding this threshold—even by a small amount—could trigger full repayment of all benefits received during that period.
Many carers inadvertently went over the limit without realising it and weren’t notified by the DWP in time. One extreme example involved a carer who exceeded the limit by just £1 per week, only to later face a debt of more than £4,000.
Until recently, the DWP only investigated around 50% of the automated earnings breach alerts it received, citing cost-saving concerns. This led to thousands of unmonitored breaches and unpaid carers being left vulnerable to accumulating significant debts.
According to a report by the National Audit Office, the total outstanding Carer’s Allowance overpayment debt rose to £251.7 million by 2023–24.
DWP’s New Reform Plan
In response to the scandal, the DWP has pledged to implement several major reforms aimed at addressing systemic issues and preventing future injustices.
1. Full Review of the System
An independent review, led by Liz Sayce OBE (former head of Disability Rights UK), has been commissioned to examine:
- Why overpayments occurred
- How they can be prevented
- What support can be offered to those already affected
The government has said the review will be delivered by summer 2025. You can find more about the review on the UK Government website.
2. 100% Monitoring of Breach Alerts
Going forward, the DWP will assign more staff to ensure all alerts related to earning breaches are investigated. This should allow carers to be notified more quickly if they are at risk of exceeding the threshold, reducing the chances of mounting debts.
Details on this commitment were outlined by the DWP on The Guardian’s report.
3. Higher Earnings Threshold
The weekly earnings limit for receiving Carer’s Allowance has been increased from £151 to £196, reflecting recent changes in the National Living Wage. The DWP says that this adjustment will benefit over 60,000 carers by 2029–30.
Continuing Criticism and Unanswered Questions
Despite these improvements, campaigners and politicians have criticized the government for not doing enough to support carers who were unknowingly overpaid.
Liberal Democrat leader Ed Davey and other MPs have called on the DWP to cancel existing debts, especially in cases where carers made honest mistakes and were unaware of breaches.
Furthermore, the government continues to pursue repayment and prosecution, including for small-scale infractions, leading to widespread fear and frustration among vulnerable families. According to The Guardian, over one million unpaid carers in the UK currently live in poverty, and many say they’ve turned down pay rises or reduced work hours to avoid losing eligibility.
Conclusion
This overhaul of the Carer’s Allowance system is a significant step forward, but it may not go far enough to correct past harm. With the independent review expected to report in the summer and growing calls for further action, the government is under pressure to ensure that unpaid carers—who play a vital role in society—are treated fairly and supported adequately.
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Himanshu Sharma writes for Weekend Spy, focusing on recruitment, government schemes, and current affairs. He is dedicated to making complex information accessible to readers.
Himanshu enjoys playing chess, hiking, and trying new recipes, always seeking ways to combine his love for writing with his passion for exploration. Connect with Drop him an email at [email protected].
