Tens of thousands of unpaid carers across England and Wales are being hit with unexpected debt demands from the Department for Work and Pensions (DWP) — with some being told to repay up to £20,000. The overpayments were caused by system errors and a failure to properly check earnings under Carer’s Allowance rules.
Charities, politicians, and carers themselves are calling for urgent reforms, with many saying they were unaware they had breached the weekly earnings limit, which now stands at £196.
What Is the Issue With Carer’s Allowance Overpayments?
Carer’s Allowance is a benefit for those providing unpaid care for someone for at least 35 hours a week. To qualify, your weekly earnings must not exceed a set limit — previously £151, but increased to £196 in April 2024, the largest rise in nearly 50 years.
However, the Verify Earnings and Pensions (VEP) system used by the DWP, which flags potential earnings breaches, only investigated around 50% of alerts. This means that many carers who unknowingly earned a few pounds over the limit were not warned early — and instead built up debts over time.
The Financial Impact on Carers
If a carer breaches the weekly earnings limit by even £1, they must repay the entire weekly Carer’s Allowance of £83.30 for that week — not just the amount over the limit.
This leads to what’s been described as a “cliff-edge” penalty. For example:
Earning £1 over the limit each week for a year would trigger a demand to repay £4,330.
Some carers, unaware for years, are now being told to repay up to £20,000 in total.
Charities and MPs Call for Urgent Action
Carers UK, who analysed the figures shared with The Guardian, revealed that £357 million in overpayments had been made over the last six years.
Liberal Democrat leader Ed Davey called the situation a “scandal” and said all historic overpayment debts should be written off.
Labour MP Sir Stephen Timms admitted that alerts had been ignored but confirmed the Government now plans to review 100% of VEP alerts moving forward to prevent more carers from falling into debt.
DWP’s Response and Promised Improvements
A DWP spokesperson claimed that the Carer’s Allowance overpayment rate is now the lowest on record. However, they acknowledged issues and promised:
More staff to process all future earnings alerts
Extra funding and resources to prevent overpayments
A commitment to ensuring carers get the right support
Despite this, there has been no indication that past overpayments will be waived.
Why This Matters to Carers
Carers, often saving the government money by providing unpaid support, are now facing sudden financial hardship — all for minor or unintentional earnings breaches. Many weren’t notified until years later, by which time their debts had grown into thousands of pounds.
This situation has caused mental stress, confusion, and hardship for carers who are already stretched thin emotionally and financially.
What Carers Should Do Now
If you receive Carer’s Allowance:
Track your earnings weekly, especially if you’re close to the limit (£196).
Report any changes in income to the DWP immediately.
Check your Universal Credit and employment income statements for discrepancies.
If you’re contacted about an overpayment, you can appeal or request a review.
Seek advice from Citizens Advice or Carers UK if you’re struggling with a repayment demand.
This overpayment crisis is a wake-up call for both the government and carers. While the DWP plans to fix its monitoring system, the damage is already done for many — with tens of thousands now facing crippling debt due to system failure. Calls to write off these debts are growing, as is pressure to design a fairer and more transparent benefit system. For now, carers must remain vigilant about their earnings and seek help if they’re affected.
FAQs
Why are carers being told to repay Carer’s Allowance?
Carers are being told to repay Carer’s Allowance because they unknowingly earned over the weekly earnings limit. The DWP’s system missed or delayed acting on alerts, causing overpayments to build up over time.
What is the earnings limit for Carer’s Allowance in 2024?
The earnings limit for Carer’s Allowance is £196 per week as of April 2024. If you earn even £1 over this limit, you may be ineligible and required to repay the full benefit for that week.
How much could carers be asked to repay?
Some carers are being asked to repay between a few hundred pounds and up to £20,000, depending on how long they exceeded the earnings limit without it being flagged by the DWP.
Can carers appeal the overpayment demand?
Yes, carers can request a mandatory reconsideration or appeal the decision. It’s advisable to seek help from Citizens Advice or Carers UK for support with the process.
What is the DWP doing to fix the issue?
The DWP is increasing staffing and committing to review 100% of earnings alerts to catch future overpayments early. However, they have not confirmed if past overpayments will be written off.
