Between May 2024 and February 2025, the number of outstanding Carer’s Allowance overpayment debts rose by over 9,000, with a staggering 143,922 carers now affected. This comes after a 71% increase in overpayment cases between 2018-19 and 2023-24, where the number of affected individuals rose from 80,169 to 136,730. The problem is not new, but it is rapidly escalating, causing significant financial and emotional strain on families.
The DWP is currently reviewing all possible cases of overpayments, with extra staff being drafted in to ensure that all alerts are checked promptly. The charity Carers UK, alongside 107 other organisations, has called for a halt to the creation of new overpayment debts until the independent review—led by Liz Sayce OBE—has concluded and its recommendations are implemented.
How Overpayments Happen
Carer’s Allowance is available to those who spend at least 35 hours a week caring for someone. The current rate is £81.90 per week, with an earnings limit of £151 per week. If a carer exceeds this earnings threshold—even by a single penny—they must repay the entire Carer’s Allowance for that week. This is known as the “cliff-edge” rule.
Many carers are unaware they have breached the earnings limit, especially if their income fluctuates or if they take on extra work to make ends meet. The DWP’s system is designed to flag potential overpayments, but delays in processing these alerts have led to overpayments accumulating over years, sometimes reaching as much as £20,000.
The Impact on Carers
The financial burden of repaying these debts is immense. Carers UK reports that overpayments can range from £150 to £20,000, with the average debt being around £4,000. Many carers are already living in poverty, and the added stress of debt repayment can have a devastating effect on mental health and family life.
Some carers have left employment altogether, fearing further overpayments and the stress of dealing with the DWP. The debts also impact entire households, including children and disabled family members, as carers are forced to cut back on essential spending to meet repayment demands.
Government Response and Review
In October 2024, the government announced an independent review of Carer’s Allowance overpayments, led by Liz Sayce OBE. The review aims to assess how overpayments have accrued on such a vast scale and to recommend changes to the system.
The DWP is now bringing in additional staff to review all overpayment cases. Currently, only half of the alerts generated by the DWP’s internal database are being reviewed, but with the addition of 20 new staff members to a team of just over 70, the aim is to review 100% of alerts. Recent evaluations show that 67% of investigated alerts uncover overpayments, 28% result in no change, and 5% lead to arrears being reimbursed to carers.
The DWP has stated that it is committed to working with individuals to negotiate manageable and sustainable repayment arrangements. However, charities argue that the current system is fundamentally unfair and that urgent reforms are needed to protect carers from further hardship.
Calls for Reform
Carers UK and over 100 other organisations have written to the Secretary of State for Work and Pensions, Liz Kendall, calling for:
-
A halt to the creation of new overpayment debts until the independent review has concluded and its recommendations are implemented.
-
The publication of the final report in early summer and swift implementation of its recommendations.
-
The write-off of existing substantial overpayment debts where carers could have been notified sooner by the DWP.
They argue that the current system penalises carers for trying to balance paid work and unpaid care, and that the “cliff-edge” rule is causing unnecessary hardship. Many carers are forced to choose between poverty and debt, and the lack of transparency around how earnings are averaged is causing further confusion and distress.
Carer’s Allowance Overpayments
| Period | Number of Outstanding Overpayment Debts | Notes |
|---|---|---|
| May 2024 | ~134,000 (approx.) | Baseline before recent increase |
| February 2025 | 143,922 | Increase of over 9,000 in 9 months |
| 2018-19 | 80,169 | Start of significant rise |
| 2023-24 | 136,730 | 71% increase over 5 years |
| Current (June 2025) | ~144,000 (est.) | Number continues to rise |
| Average debt | ~£4,000 | Range: £150–£20,000 |
Carer’s Allowance Scheme Details
| Scheme Feature | Details |
|---|---|
| Eligibility | Care for someone 35+ hours/week |
| Weekly Rate | £81.90 |
| Earnings Limit | £151 per week |
| Overpayment Rule | Must repay entire week’s allowance if over limit by even £0.01 |
| Notification | Carers must inform DWP of changes in circumstances |
| Current Review | Independent review led by Liz Sayce OBE |
FAQs
1. Why are so many carers being asked to repay Carer’s Allowance?
Many carers have unknowingly exceeded the earnings limit, and the DWP’s system has been slow to flag these overpayments, leading to debts accumulating over years.
2. What is the “cliff-edge” rule?
If a carer earns even a penny over the £151 weekly limit, they must repay the entire Carer’s Allowance for that week, which can result in significant debts for small oversights.
3. What is being done to help affected carers?
The government has launched an independent review and is increasing staff to process overpayment cases. Charities are calling for a halt to new debts and for existing debts to be written off where the DWP could have notified carers sooner.
Read More July 2025 DWP Benefits & Pension Payments Schedule + Cost‑of‑Living Support Guide