Victims of carer’s allowance crisis ‘need speedier repayments’, say campaigners

Carer’s Allowance is a benefit for people who provide regular care to someone with a disability or health condition. It matters because carers may depend on this support while balancing unpaid care with part-time work. The article focuses on debts created when officials wrongly applied earnings rules to some recipients.

Generally, a person must provide at least 35 hours of care each week, and the person cared for must receive a qualifying disability benefit. The carer’s earnings must also stay within a limit after permitted deductions. Exact eligibility thresholds can change, and the article does not state them.

The reported scandal affected carers whose irregular wages were assessed unlawfully. The DWP is reviewing those cases and cancelling or reducing wrongful overpayments. This matters because an incorrect decision can turn ordinary earnings changes into large debts, causing financial hardship and long waits for correction.

The reassessment exercise covers an estimated 233,300 cases involving carers affected by the unlawful earnings guidance. These cases arose after carers with irregular part-time wages were denied the chance to average income over a year. The scale matters because each case may involve a disputed overpayment and serious financial pressure.

After five months, DWP had reviewed 2,400 cases, equal to 1.04% of the estimated caseload. It had fully repaid 100 carers, returning £40,000 in total. A further 100 carers had their overpayment debts reduced by £20,000 altogether. The average full repayment was £342.

That leaves 230,900 identified cases still awaiting review. Campaigners calculated that the current pace could take about 40 years, although DWP says it remains on track to finish by March 2029. It plans to increase project staff to 250 by next April.

The reassessment exercise is designed to correct debts created when DWP officials unlawfully changed guidance about carers’ earnings. The change affected carers with irregular wages from part-time work. They had believed their income could be averaged over a year, but the new approach exposed them to overpayment demands.

The problem began in 2020, when officials quietly changed existing guidance without advising carers or taking legal or policy advice. The DWP failed to allow annual averaging, so carers could appear to exceed an earnings limit during particular periods even when their income varied across the year. Those cases are now being reconsidered.

The exercise costs £75m and is planned to last three years. It can lead to wrongful debts being cancelled, or existing overpayment debts being reduced. Campaigners welcome the action but say other Sayce review recommendations, including some universal credit faults, still need progress.

Many carers believed they could average irregular earnings over a one-year period when their part-time wages changed from month to month. That approach reflected how their real annual income fluctuated. It mattered because a single high-earning period did not necessarily represent their overall earnings.

In 2020, DWP officials quietly changed existing guidance. They stopped allowing this averaging method, without advising carers or taking legal or policy advice. As a result, carers could be judged against an earnings limit using the wrong method. Some were treated as having received too much Carer’s Allowance and were sent overpayment demands.

The Sayce review found that this was a systemic DWP shortcoming. The reassessment exercise now examines affected cases, cancels wrongful overpayments, or reduces debts. The article reports that 100 carers had already received full repayments, while another 100 had debts reduced.

When a wrongful overpayment is left unresolved, carers continue to face a debt created by an unlawful benefits decision. The article says these debts caused financial hardship and, in the wider investigation, emotional despair. Delays matter because affected households remain uncertain about whether money will be repaid or a debt reduced.

The cases involved demands as high as £20,000, according to the Sayce review. Only 100 carers had received full repayments after five months, while 230,900 identified cases were still awaiting review. Another 100 carers had their debts reduced, but most had no resolution yet.

Campaigners say the slow pace prolongs hardship and uncertainty. Carers UK called for a realistic plan to accelerate the work. DWP says it is prioritising accuracy, recruiting and training decision makers, and intends to complete the exercise by March 2029.

When government officials create debts through an unlawful benefits decision, the DWP has to put affected people back in the position they should have been in. In this case, that means reviewing cases accurately, cancelling wrongful overpayments, making full repayments, or reducing debts. The issue matters because the errors caused hardship for unpaid carers.

The article describes specific corrective duties. DWP must reassess the identified cases, use enough trained decision makers, and explain how it will speed up the process. It has already returned £40,000 to 100 carers and reduced debts for another 100 by £20,000. It plans to increase staff to 250 by next April.

Campaigners also want political leadership. Sir Ed Davey called on the prime minister to intervene, while Helen Walker demanded a realistic acceleration plan. DWP says it remains on track to finish by March 2029 and is prioritising accuracy over speed.

Means-tested benefits use earnings limits to match support with a claimant’s financial circumstances. The basic idea is that people with higher available income may need less assistance. Limits also create a clear test for deciding whether someone remains eligible while working part time.

Income can change from week to week or month to month. If a claimant goes above the permitted limit, payments may be reduced or stopped. Money already paid can then be treated as an overpayment. For carers in this story, the key mechanism was different: DWP failed to allow irregular earnings to be averaged across a year, so temporary income patterns could trigger demands.

That is why accurate guidance matters. A lawful earnings test can adjust support fairly, but an unlawful method can create debts that do not reflect a person’s overall income. The reassessment is correcting cases affected by that specific error.