Around 25,000 unpaid carers could see their Carer’s Allowance debts reduced, cancelled entirely, or receive refunds following a major DWP review into system failures.
Thousands of unpaid carers who were instructed to repay substantial sums after falling foul of confusing earnings regulations are set to have their debts reduced, written off, or reimbursed.
Carer’s Allowance is worth £86.45 a week and is awarded if you care for someone at least 35 hours a week and they claim certain benefits, such as Personal Independence Payment.
However, many individuals were told to repay thousands of pounds to the Department for Work and Pensions (DWP) and left facing serious financial hardship after unwittingly breaching a “cliff edge” earnings threshold.
It is possible to work while claiming Carer’s Allowance — but should your earnings exceed the limit, even by as little as £1, you forfeit your entire entitlement to the benefit.
Charities condemned the system as unnecessarily complicated, particularly in cases where a person’s wages vary from one week to the next, reports the Mirror.
The earnings threshold previously stood at just £151 a week, calculated after tax, National Insurance, pension contributions and allowable expenses.
It was raised to £196 in April 2025, then to £204 in April 2026. The Department for Work and Pensions (DWP) has now revealed it will review over 200,000 cases.
The department confirmed that approximately 25,000 carers could have their debts reduced, cancelled entirely, or receive refunds where money has already been repaid.
In the majority of instances, carers will not need to contact the DWP directly and will only be approached if further information is required. The action follows ministers accepting 38 out of 40 recommendations put forward by the independent Sayce Review into Carer’s Allowance overpayments in November 2025.
The review discovered that between April 2015 and September 2025, guidance on averaging irregular and fluctuating earnings was ambiguous and failed to accurately reflect the law.
It concluded that carers balancing paid employment with caring responsibilities had accumulated debts unknowingly, in what was characterised as a systemic failure.
Secretary of State Pat McFadden said: “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, said: “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.
“Carers UK has been campaigning on the issue of Carer’s Allowance overpayments for more than seven years, and during that time we have heard from hundreds of carers who have experienced severe financial strain and emotional distress as a result.
“As we mark the 50th anniversary of Carer’s Allowance this week, it is encouraging to hear that the government is also exploring further options for reform.
“This is sorely needed to ensure that it properly supports and recognises the contribution of unpaid carers, while protecting them from financial hardship.”



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