A devastating independent review has exposed systemic failures in the government's handling of Carer's Allowance, revealing how vulnerable unpaid carers were driven to consider suicide after being pursued for enormous debts they didn't know they owed.
System Designed to Fail the Most Vulnerable
The year-long investigation by Liz Sayce uncovered a Department for Work and Pensions system that deliberately ignored real-time alerts about carers breaching earnings limits, choosing instead to meet internal fraud prevention targets rather than protect claimants.
Shockingly, officials calculated they only needed to investigate half of all earnings alerts to hit their targets, leaving approximately 230,400 unpaid carers at risk of unknowingly accumulating massive debts between 2018 and 2024.
One carer remained on the warning database for five years without any action from the DWP, despite the department's most senior civil servant, Peter Schofield, telling MPs in 2019 that the problem was being solved.
The Brutal 'Cliff Edge' That Punishes Pennies
One of the most criticised elements of Carer's Allowance is the harsh "cliff edge" rule where carers who exceed the weekly earnings limit by just 1p must repay the entire week's benefit of £83.30.
This means someone accidentally breaching the threshold by 1p weekly for a year faces repaying £4,331.60 plus a £50 penalty - a situation Sayce described as urgently needing reform.
The report reveals that nearly three-quarters of the 1 million people claiming Carer's Allowance are women, with 40% struggling with their own health issues while caring for loved ones. These carers save the state an estimated £184 billion annually through their unpaid work.
Criminalised by Default
The review found carers were "disproportionately" treated as guilty before being proven innocent, with the system assuming "negligence as a default" rather than investigating individual cases.
Sayce's investigation revealed that 852 unpaid carers were referred for criminal prosecution in the six years to 2024, with another 1,510 receiving fines up to £5,000 - on top of their overpayment demands.
Carer's Allowance claimants receive more £50 civil penalties than any other benefit recipients, despite there being eight times fewer carers than Universal Credit claimants.
Outdated System, Devastating Consequences
First introduced in 1976, Carer's Allowance was described as "an outdated benefit [that] has become ever less fit for purpose" in today's world of zero-hours contracts and irregular work patterns.
The psychological impact on carers has been severe, with some reporting weight loss, insomnia and overwhelming shame. One carer told the inquiry they investigated whether their debt would be cancelled if they died, only to discover the government would pursue their family instead.
The stress became so intense for some carers that local authorities had to take over care responsibilities at additional cost to the state.
Government Response and Reforms
In response to the 146-page report, the DWP has promised to review decisions affecting approximately 185,000 unpaid carers spanning ten years to 2025.
Work and Pensions Secretary Pat McFadden said the department had accepted the "vast majority" of Sayce's 40 recommendations and was "considering longer-term reforms" to modernise the system.
The DWP is examining ways to replace the punitive cliff edge with a tapered system that better reflects carers' earnings, though officials warn any policy changes will take time to implement.
Despite these commitments, the government has offered no official apology or compensation for the distress caused to thousands of families who provide essential care while living in poverty.
