Thousands of unpaid carers could still be required to repay large, and potentially unfair, debts, as the government begins a review of past benefit cases.
On Monday (13th April), ministers launched an audit of more than 200,000 historical carer’s allowance cases.
An estimated 25,000 carers who received unlawful overpayment demands since 2015 could see their debts reduced or cancelled.
The reassessment forms part of efforts to ‘put right’ systemic issues that left many carers owning as much as £20,000, often through no fault of their own.
However, the government has confirmed that existing recovery practices will remain in place during a broader reform of the system, meaning penalties will continue for some claimants.
It is also unclear how ministers will compensate thousands more carers who were wrongly issued with overpayment demands due to system faults linking universal credit and carer’s allowance, as well as cases where evidence submitted about changes in earnings was lost.
A freedom of information request, published this month, revealed around 22,500 carers were given overpayment notices in the three months after an independent review was produced. This included about 1,400 carers contacted in January 2025, even though the rules to calculate their debts had already been withdrawn by the Department for Work and Pensions.
The government acted in 2025 after a Guardian investigation found senior welfare officials and Conservative ministers had for years ignored warnings that carers had been pushed into debt and ill health. In some cases, carers were even taken to court for fraud.
The £75m review is set to run for two years and will focus on cases where carers were not allowed to average their earnings over a year.
Liz Sayce, who led the independent review, welcomed the move. Her report, published in November, highlighted problems in the system caused ‘avoidable hardship and distress’ and led to public money being misspent.
It also found that between 2019 and 2024, one in five carers working part-time while claiming the benefit were overpaid – the total amount reached more than £300m.
Pat McFadden, the welfare secretary, said: ‘We inherited a system that left unpaid carers building up debt through no fault of their own, something we’re determined to put right. That’s why we accepted the vast majority of the Sayce review’s recommendations and are now getting to work implementing them.’
Helen Walker, chief executive of Carer’s UK, added: ‘We are pleased to see this government taking decisive action to start putting right the failings of the past and provide carers with the redress they deserve. The reassessment process marks an improve step in tackling these systemic failures.’
Image: Ehud Neuhaus/UnSplash
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