Carer’s allowance overpayment debts hit £250m

A new report has found that carer’s allowance overpayment debts have soared to £250m, up £100m from just six years ago.  

The National Audit Office (NAO) – the government’s spending watchdog – finds that the number of people with outstanding overpayment debts has grown every year since 2018, increasing from 80,169 people to 136,730 in 2023/24.  

A ‘broken system’  

Charity Carers UK described the findings as further proof of a ‘broken system’ failing unpaid carers.  

Last year, the Department for Work and Pensions (DWP) paid out £3.7bn in carer’s allowance to over 900,000 claimants. 

Who’s eligible?  

If you're caring for someone for at least 35 hours a week due to illness or disability, you may be eligible for £81.90 per week.  

But, to qualify, you must earn no more than £151 per week.  

From April, the threshold will rise to £196. 

The ‘cliff edge’ problem  

The system’s ‘cliff edge’ rule means that if a carer earns just £1 above the weekly limit, they lose all entitlement to carer’s allowance and have to repay the entire amount back.  

This can cause overpayments to quickly build up, creating financial difficulty and debt.  

Carers are legally required to tell DWP of any changes in their circumstances. 

Despite this, the department has been criticised for not preventing overpayments, even though its system flags when a claimant is earning too much.  

Carers' boost in the budget  

In the government’s budget in October, the chancellor Rachel Reeves announced a much-needed boost for carers.  

They will now be able to earn over £10,000 a year while still receiving carer’s allowance – the equivalent of being paid 16 hours at the national living wage per week.   

We welcome the change. Our director of external affairs, Sebrina McCullough, said:  

"The increase to the carer’s allowance earnings threshold is a positive step towards supporting carers.