Scores of carers overpaid more than £20,000 last year despite reforms

Data shows 32,559 earnings-related overpayments in 2025-26 after DWP’s measures to end carer’s allowance scandal

Scores of unpaid carers were hit with demands to repay sums of more than £20,000 and hundreds more put at risk of prosecution last year as a result of official failures in what appear to be continuing problems with carer’s allowance.

New figures showed carers were asked to repay £33m in 2025-26 as a result of 32,559 earnings-related overpayments, despite the introduction of measures over a year ago designed specifically to prevent carers falling foul of the system.

The large number of overpayments indicates tens of thousands of carers continue to suffer under the government’s “business as usual” policy of maintaining the current discredited system’s penalties while gradually introducing reform.

While ministers insist they are reducing carers’ exposure to punishing benefit injustices, the new figures suggest progress in tackling problems often compared to the Post Office scandal is slow, and that carers are continuing to pay a high price.

Campaigners said it was unacceptable that overpayment levels were so high and warned that carers faced continued jeopardy under what remained a fundamentally outdated system unfit for the modern world.

The Labour MP Anna Dixon, the chair of the all-party parliamentary group on carers, said it was shocking unpaid carers were still being hit with large overpayment debts and left to shoulder the consequences of official failures.

She added: “I hope the Department for Work and Pensions (DWP) 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.”

Ministers vowed nearly two years ago, in the wake of an award-winning Guardian investigation, to correct longstanding benefit flaws and injustices that led over many years to hundreds of thousands of carers unfairly acquiring huge debts and, in some cases, criminal records.

These included draconian “cliff edge” penalties that could land a carer with a £4,488 bill for earning 1p a week more than earnings rules over a year, and the introduction of internal guidance that unlawfully prevented carers from averaging irregular earnings to enable them to stay within weekly earnings rules.

An independent review of carer’s allowance overpayments published in December found “systemic issues” and poor leadership by the DWP, rather than carer negligence or fraud, was at the root of the scandal.

It found the mass issuing of overpayments through an opaque, shambolic and punitive system profoundly affected the health of many carers who found themselves at the “whim of a faceless machine”.

The DWP has since promised to reassess and reimburse tens of thousands of overpayments issued as a result of the unlawful averaging policy. But it has yet to explain how it will compensate carers punished even after they followed earnings reporting rules, and those who fell foul of problems with universal credit.

The latest overpayment figures, acquired under freedom of information, show the DWP reduced both the total number and cash value of overpayments incurred by carers for earnings-related rule breaches by about 30% in 2025-26.

But the number of carers accruing extreme debts of more than £20,000 rose year on year from 46 to 78, suggesting these overpayments had only been recently identified after going undetected by the DWP for the best part of five years.

The data also showed more than half of all overpayments were for more than £500, suggesting about 16,000 overpayments went unchecked for at least six weeks, and in many cases for several months, before action was taken. Approximately 1,166 carers accrued over £5,000 in overpayments, potentially opening them up to fraud investigations.

Ministers ordered the DWP to investigate 100% of all alerts from April 2025, in theory enabling potential earnings overpayments to be spotted within days and carers swiftly contacted to prevent debts accruing. But progress appears to be slow.

The DWP’s dogged prior refusal to carry out full or timely checks of electronic alerts, called Verify Earnings and Pensions, or VEPs, despite the known devastating impact on carers, was a key element of the carer’s allowance scandal.

Any major reform of adult social care under the new prime minister, Andy Burnham, will have to clarify the role and levels of state support for unpaid carers. The care system currently relies on about 5 million unpaid carers in England and Wales to provide regular care for frail, elderly and disabled loved ones. About a third of these claim carer’s allowance, which at £86.30 a week is the lowest-value state benefit.

Last year’s independent review of carer’s allowance overpayments confirmed widespread views that the 50-year-old benefit was no longer fit for purpose, and in many respects incorporated perverse design and administrative features that actively undermined the lives of carers who relied on it. Earlier this month the DWP announced a call for evidence on ways to modernise carer’s allowance.

“We need to see a clear explanation from the government as to why recoverable amounts for some individuals 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,” said Emily Holzhausen, the director of policy at Carers UK.

Dominic King-Carter, the director of policy at Carers Trust, said: “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.”

A DWP spokesperson 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.”