Key facts
- Scores of unpaid carers were asked to repay over £20,000 in the last year.
- A total of £33m in overpayments were demanded from carers in 2025-26.
- There were 32,559 carer's allowance overpayments recorded in 2025-26.
- An independent review identified systemic issues and poor leadership by the DWP as root causes.
- The number of carers with debts exceeding £20,000 increased from 46 to 78 year-on-year.
Scores of unpaid carers faced demands to repay sums exceeding £20,000 last year, with hundreds more at risk of prosecution, indicating ongoing problems with the carer's allowance system. New figures reveal that £33m in overpayments were demanded in 2025-26, stemming from 32,559 cases, despite reforms introduced over a year prior. These high overpayment levels suggest that tens of thousands of carers continue to be affected by a system with penalties that campaigners describe as discredited and outdated.
Campaigners have expressed concern over the persistent high levels of overpayments, warning that carers remain vulnerable under a system that is not fit for purpose. Labour MP Anna Dixon, chair of the all-party parliamentary group on carers, called the situation shocking and urged the Department for Work and Pensions (DWP) to investigate the reasons for the high numbers and be transparent with the public.
Ministers had previously pledged to address long-standing benefit flaws that led to hundreds of thousands of carers unfairly accumulating large debts and, in some instances, criminal records. These flaws included severe "cliff edge" penalties and the unlawful use of internal guidance that prevented averaging irregular earnings. An independent review in December highlighted "systemic issues" and poor DWP leadership as the primary causes of the scandal, stating that the opaque and punitive system negatively impacted carers' health.
While the DWP has committed to reassessing and reimbursing overpayments related to the unlawful averaging policy, it has yet to detail compensation for those punished despite following reporting rules or those affected by universal credit issues. The latest figures show a 30% reduction in the total number and value of earnings-related overpayments in 2025-26. However, the number of carers with extreme debts over £20,000 rose to 78 from 46, suggesting these debts went undetected for years. Over half of all overpayments exceeded £500, indicating delays in detection and action.
In response to the ongoing issues, ministers directed the DWP to investigate 100% of all alerts from April 2025 to identify potential overpayments quickly. However, progress appears slow. The DWP's past reluctance to fully or promptly check electronic alerts, known as Verify Earnings and Pensions (VEPs), was a key factor in the carer's allowance scandal. Emily Holzhausen of Carers UK stated it is unacceptable for recoverable amounts to be so high, especially after promises to investigate all VEPs. Dominic King-Carter of Carers Trust noted the data reveals a larger challenge than previously understood, causing continued uncertainty for carers. A DWP spokesperson acknowledged the contributions of unpaid carers and stated the department is committed to providing support. They highlighted actions taken to fix the carer's allowance system, including faster identification of overpayments via VEPs, increased earning thresholds, benefit uprating, and acceptance of most recommendations from the Sayce review.