The Department for Work and Pensions will reassess hundreds of thousands of carer's allowance cases following a devastating official review that uncovered systemic government failures leaving vulnerable unpaid carers with life-changing debts.
Systemic failures exposed
A damning independent review triggered by a year-long Guardian investigation has concluded that countless carers suffered immense hardship due to government maladministration. The report, led by disability policy expert Liz Sayce and due for publication on Tuesday, reveals how carers faced draconian penalties reaching £20,000 for minor breaches of complex earnings rules.
Ministers have pledged to cancel or reduce wrongly issued penalties after the review determined most overpayments resulted from official errors rather than deliberate rule-breaking. However, in a move that will disappoint many affected families, the government has stopped short of offering compensation to those whose lives were plunged into financial crisis.
The cliff-edge rules that devastated lives
Unpaid carers providing at least 35 hours of weekly care qualify for £83.30 weekly carer's allowance, provided their earnings from part-time work don't exceed £196. The system's critical flaw lies in its "cliff-edge" earnings threshold where exceeding the limit by even one penny requires repayment of the entire week's allowance.
This meant someone accidentally overstepping the threshold by minimal amounts throughout a year could face repayment demands of £4,331.60 plus £50 penalties, rather than the few pence actually overpaid. The situation worsened because the DWP, despite having access to real-time earnings data, failed to promptly alert carers about breaches, allowing debts to accumulate over years.
Justice delayed but not denied
Welfare secretary Pat McFadden acknowledged the need to address past failures, stating: "We inherited this mess from the previous government, but we've listened to carers, commissioned an independent review and are now making good for those affected."
The government has accepted most of the review's 40 recommendations, including reassessing all carer's allowance overpayments since 2015. The review will particularly focus on cases involving fluctuating earnings where average income over longer periods remained within limits.
Recent tribunal victories by carers Andrea Tucker and Nicola Green, who successfully argued their fluctuating earnings were lawful when averaged annually, suggest DWP policy has been fundamentally flawed since 2020.
Currently, at least 144,000 unpaid carers are repaying more than £251 million in overpayments, with total wrongly paid carer's allowance since 2019 estimated at over £357 million. The scandal has drawn frequent comparisons to the Post Office Horizon controversy, with many carers describing being treated like criminals and some facing wrongful fraud convictions.
