The Department for Work and Pensions (DWP) has instructed approximately 33,000 Carer's Allowance claimants to repay debts of up to £20,000, following a surge in overpayments during the 2025-26 financial year. New data reveals that 32,559 overpayments were made, despite the DWP implementing reforms to address the ongoing scandal.
Rising Extreme Debts
The number of carers accumulating debts exceeding £20,000 rose from 46 to 78 year-on-year. Labour MP Anna Dixon, chair of the all-party parliamentary group on carers, described the situation as shocking, stating that unpaid carers are being burdened with large overpayment debts due to official failures. She urged the DWP to investigate why numbers remain high and to be transparent with carers and Parliament about the scale of the problem and planned solutions.
Government Response and Reassessment
The government has committed to reassessing cases dating back to 2015. Where averaging of earnings payments could have been lower, the DWP will repay or write off debt, including amounts already repaid in full. Emily Holzhausen, director of policy at Carers UK, called for a clear explanation from the government regarding the high recoverable amounts, noting that it is unacceptable for such debt to accumulate after a promise to investigate 100% of Variable Earnings Payments (VEPs).
Dominic King-Carter, director of policy at Carers Trust, added that the data brings continued uncertainty for carers who fear being caught in the system, highlighting that the challenge is even bigger than previously thought.
DWP Statement
A DWP spokesperson stated: 'We understand the huge difference unpaid carers make and are determined to provide them with the support they need and deserve. That’s why we’ve taken action to fix the broken carer’s allowance system we inherited, including identifying and stopping overpayments more quickly through VEPS, delivering the biggest ever cash increase in the earning threshold, uprating the benefit, and accepting the vast majority of the Sayce review’s recommendations.'
What Affected Carers Should Do
The DWP is reassessing Carer's Allowance overpayments that occurred between 10 April 2015 and 2 September 2025. Affected individuals may receive a refund or have their debt reduced or cancelled. Claimants do not need to contact the Carer's Allowance Unit; the DWP will contact them with a decision or if further information is required.
