£75M to Fix Carer's Allowance Scandal as 185,000 Overpayment Cases to Be Reviewed

When Department for Work and Pensions sent letters demanding repayment from unpaid carers who earned £152 a week, they didn’t just make a mistake—they shattered trust. Between 2015 and summer 2025, nearly 212,000 carers in England and Wales were hit with overpayment debts under confusing rules that failed to account for fluctuating work hours, medical appointments, or the reality of juggling care with part-time jobs. Now, after years of outcry, the UK government has admitted it let them down. On November 25, 2025, it accepted the Sayce reviewLondon’s findings and announced a £75 million rescue package, with Rachel Reeves, the Chancellor, confirming the funding in the Autumn Budget 2025Westminster on November 29. The goal? To review 185,000 cases—and cancel or refund money where the debt was unfair.

How the System Broke Carers

The rules were brutal in their simplicity: if you earned more than £151 a week, you lost your Carer’s Allowance. No grace period. No averaging. No understanding that many carers worked shifts, did agency jobs, or had seasonal income. A single extra shift could trigger a debt notice. By April 2025, the limit rose to £196—but the DWP didn’t update its systems or communications in time. Many carers didn’t even know the rule changed. Some were told they owed £5,000 for work they’d done years ago. Others received bills after their loved one passed away. "It’s like the Post Office scandal," said one carer from Sheffield, who repaid £8,200 over three years before discovering her earnings were averaged incorrectly. "We weren’t hiding anything. We were just trying to survive."

Carers UK and the Long Fight for Justice

For nearly eight years, Carers UK pushed for change. Their CEO, Helen Walker, called the November 25 announcement "a really important day"—the first time the government fully acknowledged systemic failure. "We’ve been raising this since 2017," she said. "Carers weren’t cheating the system. They were caught in a bureaucratic trap.", The Sayce review confirmed that 38% of overpayments were due to DWP errors in processing earnings data, and 41% stemmed from unclear guidance. The review also found that many carers had been wrongly told they could work up to 20 hours—when the real limit was tied to earnings, not hours.

What’s Being Fixed—And What’s Not

The £75 million will be spent over three years to: review all 185,000 cases, cancel debts where calculations were wrong, and refund money already paid back. Letters will now clearly state what income needs reporting. The government also pledged to explore an earnings taper—like Universal Credit’s—so small income bumps don’t trigger a total benefit loss. A separate review into unpaid carers’ employment rights has begun, aiming to protect them from unfair dismissal or lack of flexible hours. But here’s the twist: while fixing one crisis, the government deepened another. Effective December 2025, the health-related element of Universal Credit for new claimants drops from £105 to £50 per month—a £200+ monthly cut. Existing claimants are frozen until 2029. "You can’t fix one injustice by creating another," said Ed Davey in Parliament on Budget day. "Carers and disabled people were left invisible and unheard."

The Hidden Crisis: 1.2 Million Carers in Poverty

Even before the overpayment scandal, unpaid carers were drowning. Research from the Centre for Care at the University of Birmingham found 1.2 million unpaid carers live in poverty. Nearly half—49%—have cut back on food, heating, or medicine. One in three have turned to loans or overdrafts. "This isn’t just about debt," said Kirsty McHugh, CEO of Carers Trust. "It’s about dignity. These are people who give 50+ hours a week to care for someone else—and get nothing in return." McHugh slammed the Autumn Budget for ignoring the broken social care system. "Local authorities are running on fumes," she said. "We’ve got more carers needing more support, while funding keeps shrinking."

What Comes Next?

The DWP must complete all 185,000 reviews by December 2028. Carers will be contacted by mail with personalized assessments. Those who’ve already repaid overpayments will receive refunds, likely by mid-2026. The earnings taper pilot is expected to launch in 2027. Meanwhile, pressure is mounting for a full independent inquiry into the DWP’s handling of benefit claims. Martin Lewis, founder of MoneySavingExpert.com, called the system "fundamentally unjust"—and said he’s preparing legal advice for affected carers.

Why This Matters to Everyone

One in seven adults in the UK is an unpaid carer. That’s 7 million people. Many are women over 50, juggling jobs, aging parents, and sick children. When the system fails them, it doesn’t just hurt individuals—it strains hospitals, pushes families into debt, and increases demand on social services. Fixing Carer’s Allowance isn’t just about money. It’s about recognizing that care isn’t charity. It’s infrastructure.