Government Review of Carer’s Allowance Cases Underway Amid Repayment Demands
Thousands of unpaid carers will continue to face substantial and potentially unjust benefit repayment demands as the government initiates a review aimed at addressing welfare injustices compared to the Post Office scandal.
On Monday, ministers will commence an audit of over 200,000 historical carer’s allowance benefit cases. An estimated 25,000 carers who have been issued unlawful overpayments since 2015 are expected to have their repayment debts either cancelled or reduced as a result of this review.
This reassessment exercise represents a significant move by the government to "put right" systemic injustices that caused hundreds of thousands of vulnerable carers to accumulate debts up to £20,000 through no fault of their own.
However, the government has acknowledged that its current “business as usual” policies on overpayment recovery will remain in effect during the comprehensive overhaul of the benefit, meaning that carer’s allowance penalties will continue to be enforced.
Moreover, it remains unclear how ministers intend to compensate thousands more carers who were unlawfully issued overpayment demands due to longstanding system faults linking universal credit and carer’s allowance, or those who were wrongly instructed to repay money after officials lost evidence that they had reported changes in earnings.
Approximately 22,500 carer’s allowance claimants were issued with overpayments in the three months following the publication of an independent review, according to a report released this month.
This includes a backlog of overpayments identified in 2025, which were sent to about 1,400 carers in January despite officials knowing that the decisions to penalise carers were based on unlawful and discredited earnings-averaging guidance. This guidance had been formally discontinued by the Department for Work and Pensions (DWP) in September.
The government took action last year after a investigation revealed that senior welfare officials and Conservative ministers had for years ignored evidence that carers were unfairly pushed into debt and ill health, and in some cases convicted of fraud, due to failings in the carer’s allowance system.
The two-year, £75 million reassessment exercise, which will focus solely on cases where carers were unlawfully prevented from averaging their annual earnings to avoid earnings penalties, was welcomed by Dr. Ros Altmann, the author of the independent government-commissioned review into carer’s allowance overpayments.
Her critical report, published in November, found that errors at the DWP caused avoidable hardship and distress to hundreds of thousands of carers and resulted in hundreds of millions of pounds of public money being misspent.
The report revealed that one in five unpaid carers who claimed carer’s allowance and worked part-time were hit with overpayments totaling more than £300 million between 2019 and 2024 alone, with hundreds receiving criminal convictions for fraud.
“I’m pleased [the DWP] are getting going with the reassessment exercise. That it is happening is the result of everything carers have worked for and has been reporting on.”
The welfare secretary, 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.”
While ministers have acknowledged the need to reform carer’s allowance, the DWP leadership has struggled to convince MPs and campaigners that it has fully committed to reform and to gain the trust of carers. Dr. Altmann herself has expressed frustration at what she described as the presence of "institutional resistance" within the department.
Helen Walker, the chief executive of Carers UK, commented:
“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.”
Kirsty McHugh, the chief executive of the Carers Trust, added:
“It’s heartening to see the government do the right thing by acknowledging its mistakes and now getting on with returning money to carers who were penalised for no fault of their own. This is an important first step in sorting out the myriad problems with this archaic benefit.”
