New DWP crackdown to hit thousands of workers with £4,330 debt bills over £1 breach
Thousands of unpaid carers face fresh debt demands from the Department for Work and Pensions (DWP) as the Government launches a major crackdown on overpayments of Carer’s Allowance.In a significant policy shift, the DWP has announced it will now investigate 100 per cent of earnings breach alerts related to Carer’s Allowance.After years of reviewing only 50 per cent of the earnings alerts it received from HMRC, the DWP’s new approach aims to curb overpayments and notify carers more quickly when they exceed income thresholds. However, critics warn the change could trigger a wave of backdated debt demands.Carer’s Allowance, currently worth £83.30 per week, is available to those who spend at least 35 hours a week providing unpaid care. To qualify, carers must not earn more than £196 per week after deductions. However, breaching this threshold by even a few pence means the entire weekly benefit must be repaid.Many unpaid carers, often balancing part-time work alongside their caring responsibilities, are unaware when they exceed the earnings limit. According to Carers UK, delays by the DWP in flagging these breaches have led to overpayments accumulating over long periods — leaving households facing large debts that can affect not only carers but also their children and disabled relatives.Critics have accused the DWP of operating a system akin to the "lottery," where some carers are alerted to earnings breaches within weeks, while others unknowingly build up years of overpayments — sometimes as high as £20,000 — before facing sudden repayment demands. The Guardian previously revealed that for six years, the department only investigated half of the alerts it received, leading to widespread debt among carers. According to the National Audit Office, 144,000 people are now repaying more than £250 million in overpayments.Helen Walker, Chief Executive of Carers UK, said: "Currently carers can lose a year’s Carer’s Allowance (£4,331.60) for exceeding the earnings threshold by as little as £52 annually (£1 a week). Carers make an invaluable contribution, and the Government could be doing more to reduce the hardship they are facing because of a fundamentally unfair system."While campaigners welcome the DWP’s new pledge to review 100 per cent of alerts, many warn the change comes too late for those already burdened by long-standing debts.Walker said: "As the DWP works to clear the current backlog, the human cost of a system which needed an overhaul years ago will still continue to rise. Sadly, clearing the backlog is likely to result in a further rise in overpayments debts."A DWP spokesperson confirmed that the department is bringing in additional staff to help clear the backlog of Carer’s Allowance overpayment and underpayment cases. They said: "We will agree affordable repayment plans and, when issuing debt management notifications, signpost to independent advice services."However, critics including Liberal Democrat leader Sir Ed Davey have called for the debts to be scrapped entirely stating: "It is totally unacceptable that more and more carers are being caught up in this scandal, so long after it was exposed."The Government has so far resisted calls for leniency. In a letter to charities last week, social security minister Sir Stephen Timms said there would be no pause on repayment demands, fines, or potential prosecutions during the backlog clearance. Timms said: "Carer’s Allowance alerts have been coming in to the department, but many haven’t been processed. In future, we plan to act on all of them. This will be an important step in reducing overpayments."He added: "We are delivering on the change we promised when elected by drafting in extra staff. Reviewing 100 per cent of alerts will allow us to tackle overpayments when they arise, rather than waiting until carers have built up large debts."Carers UK analysis of the Census 2021 in England and Wales found that nearly 2.5m people in employment are providing unpaid care in England and Wales, with 433,000 of those providing significant levels of unpaid care. People in employment providing unpaid care are more likely than those without caring responsibilities to be working part-time. Some 38 per cent of carers in employment are working part-time compared with 29 per cent of non-carers in employment.
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Thousands of unpaid carers face fresh debt demands from the Department for Work and Pensions (DWP) as the Government launches a major crackdown on overpayments of Carer’s Allowance.
In a significant policy shift, the DWP has announced it will now investigate 100 per cent of earnings breach alerts related to Carer’s Allowance.
After years of reviewing only 50 per cent of the earnings alerts it received from HMRC, the DWP’s new approach aims to curb overpayments and notify carers more quickly when they exceed income thresholds. However, critics warn the change could trigger a wave of backdated debt demands.
Carer’s Allowance, currently worth £83.30 per week, is available to those who spend at least 35 hours a week providing unpaid care. To qualify, carers must not earn more than £196 per week after deductions. However, breaching this threshold by even a few pence means the entire weekly benefit must be repaid.
Many unpaid carers, often balancing part-time work alongside their caring responsibilities, are unaware when they exceed the earnings limit.
According to Carers UK, delays by the DWP in flagging these breaches have led to overpayments accumulating over long periods — leaving households facing large debts that can affect not only carers but also their children and disabled relatives.
Critics have accused the DWP of operating a system akin to the "lottery," where some carers are alerted to earnings breaches within weeks, while others unknowingly build up years of overpayments — sometimes as high as £20,000 — before facing sudden repayment demands.
The Guardian previously revealed that for six years, the department only investigated half of the alerts it received, leading to widespread debt among carers. According to the National Audit Office, 144,000 people are now repaying more than £250 million in overpayments.
Helen Walker, Chief Executive of Carers UK, said: "Currently carers can lose a year’s Carer’s Allowance (£4,331.60) for exceeding the earnings threshold by as little as £52 annually (£1 a week). Carers make an invaluable contribution, and the Government could be doing more to reduce the hardship they are facing because of a fundamentally unfair system."
While campaigners welcome the DWP’s new pledge to review 100 per cent of alerts, many warn the change comes too late for those already burdened by long-standing debts.
Walker said: "As the DWP works to clear the current backlog, the human cost of a system which needed an overhaul years ago will still continue to rise. Sadly, clearing the backlog is likely to result in a further rise in overpayments debts."
A DWP spokesperson confirmed that the department is bringing in additional staff to help clear the backlog of Carer’s Allowance overpayment and underpayment cases.
They said: "We will agree affordable repayment plans and, when issuing debt management notifications, signpost to independent advice services."
However, critics including Liberal Democrat leader Sir Ed Davey have called for the debts to be scrapped entirely stating: "It is totally unacceptable that more and more carers are being caught up in this scandal, so long after it was exposed."
The Government has so far resisted calls for leniency. In a letter to charities last week, social security minister Sir Stephen Timms said there would be no pause on repayment demands, fines, or potential prosecutions during the backlog clearance.
Timms said: "Carer’s Allowance alerts have been coming in to the department, but many haven’t been processed. In future, we plan to act on all of them. This will be an important step in reducing overpayments."
He added: "We are delivering on the change we promised when elected by drafting in extra staff. Reviewing 100 per cent of alerts will allow us to tackle overpayments when they arise, rather than waiting until carers have built up large debts."
Carers UK analysis of the Census 2021 in England and Wales found that nearly 2.5m people in employment are providing unpaid care in England and Wales, with 433,000 of those providing significant levels of unpaid care.
People in employment providing unpaid care are more likely than those without caring responsibilities to be working part-time. Some 38 per cent of carers in employment are working part-time compared with 29 per cent of non-carers in employment.
