Broken System Leaves Carers Facing Financial Ruin
An independent review has exposed catastrophic failures in the administration of Carer's Allowance, revealing how thousands of dedicated carers have been plunged into debt and distress by a punitive Department for Work and Pensions system. The investigation, led by disability rights expert Liz Sayce, lays bare how the benefit designed to support those caring for disabled relatives for at least 35 hours weekly became an afterthought for officials, despite being primarily claimed by older women.
Systemic Failures and Human Cost
The review uncovered that despite the DWP having access to earnings data that could have alerted claimants when they breached the limit, only around half of automatic alerts received follow-up. This left vulnerable individuals to navigate complex rules alone, often accumulating debts reaching thousands of pounds - with one year's overpayments totalling £4,000.
Even more alarming, the investigation found that guidance issued to claimants in 2020 was so fundamentally flawed as to be invalid, while rules around averaging earnings to account for fluctuations were impossible to follow in practice.
The human consequences have been devastating. Hundreds of carers faced prosecution for fraud at the DWP's urging, with many describing life-altering experiences of debilitating shame, fear and financial hardship. The algorithm used to select cases for investigation compounded these problems rather than providing solutions.
Path Forward: Reform and Restitution
While Labour deserves credit for commissioning the review and raising the earnings threshold to £196 weekly after tax, significant challenges remain. The government must now address:
- £250 million in outstanding debts owed by carers
- The cliff-edge design that causes claimants to lose their entire allowance if earnings slightly exceed limits
- Whether hundreds wrongly prosecuted should have convictions overturned or receive compensation
The review recommends moving away from excessive automation toward more compassionate approaches, including telephone support and better staff training. However, this represents the latest in a series of critical examinations dating back six years to National Audit Office reports, raising serious questions about the DWP's capacity to learn from past mistakes.
With documented flaws persisting for years under the previous government, the pressure is now on Labour ministers to deliver swift debt resolution and fundamental system reform that properly supports those providing essential care to disabled relatives.
