The Department for Work and Pensions has issued a statement
Thousands of unpaid carers are being chased by the DWP for benefit overpayments – with some landing debts of more than £20,000.
Official figures reveal the Department for Work and Pensions demanded the repayment of £33million from carers last year after 32,559 earnings-related overpayments, suggesting the controversial Carer’s Allowance system continues to trap thousands despite reforms. Campaigners warned the figures show the department is still operating a “business as usual” approach, leaving unpaid carers exposed to crippling debts and even potential fraud investigations.
The latest data, obtained under Freedom of Information laws, show the DWP cut both the number and value of overpayments by around 30% in 2025-26 after introducing changes designed to identify problems more quickly. But critics say the figures demonstrate that tens of thousands of carers are still being caught out by a system that has been likened to the Post Office Horizon scandal.
Perhaps most strikingly, the number of carers left owing more than £20,000 actually rose from 46 to 78 over the year. Such huge debts are likely to have built up over several years before being detected by the department, campaigners say.
More than half of all overpayments exceeded £500, suggesting around 16,000 cases went unchecked for weeks or even months before action was taken. Around 1,166 carers built up debts of more than £5,000, potentially exposing them to fraud investigations.
Carer’s Allowance is paid to people providing at least 35 hours of care a week for someone with substantial care needs. The benefit is currently worth £86.30 a week, making it one of the lowest-value state benefits.
The long-running controversy centres on the strict earnings limit attached to the benefit. If carers earn more than the threshold, they can lose their entire weekly payment rather than just the amount above the limit, allowing overpayments to mount rapidly if the breach goes unnoticed.
The DWP promised sweeping reforms nearly two years ago after widespread criticism of the system. An independent review published last December concluded that “systemic issues” inside the department, rather than deliberate wrongdoing by carers, lay behind the scandal. It described a system that was opaque, punitive and poorly managed, with serious consequences for carers’ finances and mental health.
The Government has since promised to review thousands of historical overpayment decisions and accepted most of the review’s recommendations. It has also increased the earnings threshold and pledged to investigate electronic earnings alerts more quickly to prevent debts escalating.
However, the latest figures – revealed by the Guardian – suggest significant numbers of carers are still accumulating substantial overpayments. Anna Dixon, Labour MP and chair of the All-Party Parliamentary Group on Carers, said: “I hope the Department for Work and Pensions will investigate why the numbers remain so high and be transparent with carers and parliament about the scale of this problem and what it intends to do to put it right.”
Emily Holzhausen, director of policy at Carers UK, said: “We need to see a clear explanation from the government as to why recoverable amounts for some people are so high after it made a promise to investigate 100% of VEPs. It is unacceptable this level of debt is being allowed to mount up.”
Dominic King-Carter, director of policy at Carers Trust, added: “The data bring continued uncertainty to carers who fear they will be caught up in the system. We can now see this is an even bigger challenge than we previously thought.”
The issue is particularly significant because England and Wales rely on an estimated 5 million unpaid carers to look after elderly, disabled and vulnerable relatives, with around a third claiming Carer’s Allowance.
The DWP said: “We understand the huge difference unpaid carers make and are determined to provide them with the support they need and deserve.
“That’s why we’ve taken action to fix the broken Carer’s Allowance system we inherited, including identifying and stopping overpayments more quickly through VEPs, delivering the biggest ever cash increase in the earning threshold, uprating the benefit, and accepting the vast majority of the Sayce review’s recommendations.”
