A strict benefit rule described as a 'cliff edge' is forcing thousands of carers to repay huge sums to the Department for Work and Pensions (DWP), sometimes running into thousands of pounds, due to earning as little as one penny over the limit.
The 1p rule that triggers massive repayments
Carer’s Allowance is a vital support payment for those who provide care for at least 35 hours per week, currently worth £83.30 weekly. To qualify, a claimant's net weekly earnings must be below £196.
However, a critical flaw in the system means that if a carer's earnings exceed this threshold by even a single penny, they become ineligible for the entire week's allowance and must pay it back. This 'all or nothing' approach can quickly spiral into significant debt.
Earning over the limit for just one month can result in an overpayment bill of £333.20, with many carers facing demands for much larger sums.
Systemic failures blamed for debt crisis
The issue has been highlighted in the independent Sayce review, commissioned by the Secretary of State for Work and Pensions. Published on 1 January 2026, the report confirms that in very many cases, overpayments were caused not by carer error, but by DWP failures.
Charity Contact, which supports families with disabled children, explained the problem. "The complexity and inconsistency in the DWP’s own rules for calculating earnings left many claimants in a situation where they may have known there was an earnings limit, but had no way of identifying whether they were exceeding it," a spokesperson said.
The review found that flawed DWP guidance on how to average earnings exacerbated the problem. Furthermore, systemic delays in the DWP processing earnings information from HMRC meant carers were often unaware of overpayments until large debts had accrued.
Devastating impact on carers and families
Contact's own research mirrors the Sayce review's alarming findings. Their survey revealed that one in ten Carer’s Allowance claimants had been overpaid.
The average repayment demanded was a staggering £1,045. A quarter of families stated they had proactively contacted the Carer’s Allowance unit about wage changes, but the DWP failed to update their records in time.
The financial and emotional strain is causing carers to abandon the benefit altogether. Half of the families with a disabled child who had to repay Carer’s Allowance said they stopped claiming as a direct result.
This withdrawal from the system occurs despite Carer’s Allowance being a crucial income source for individuals under immense physical, emotional, and financial pressure. The current rules are creating a punitive environment where those providing essential care are penalised for minor and often unintentional fluctuations in their earnings.
