A DWP overhaul offers fresh hope to thousands of carers who have previously been required to repay up to £20,000 in benefit overpayments.
Households receiving currently face significant repayment demands if their weekly earnings exceed the crucial threshold.
As of March 2025, 143,922 individuals have outstanding carer's allowance debts, totalling over £151million, according to the Department for Work and (DWP).
Carer's allowance is paid to those providing at least 35 hours of unpaid care a week, in most cases to or sick relatives.
It is currently paid at a weekly rate of £83.30, and anyone on thecan earn a second income from a job.
However, you can't earn more than £196 a week, or you'll lose all of your allowance.
This is a different approach to other, like, which has a tapered approach to earnings so that those working don't lose all theirat once.
So, if you breach the £196 a week , you'll also be forced to repay any carer's allowance payments you've been issued.
For instance, exceeding the limit by just £1 per week over the course of a year wouldn't result in a repayment demand of £52, but rather a staggering £4,330.
For years, DWP systems have failed to promptly flag breaches of the earnings limit, resulting in substantial overpayments that individuals are required to repay – unless they have monitored their own earnings closely.
Last year, The Guardian reported that the DWP had opted to investigate and flag only 50% of claimants who had received overpayments.
However, the Government has now pledged to ensure that all claimants (100%) who receive payments after exceeding the cliff edge will be investigated and proactively notified.
A DWP Spokesperson said:“Carers are unseen heroes and we have made the biggest ever cash increase in the carer's allowance earnings threshold to make their lives easier.
“We are drafting in extra staff so the backlog of all under and overpayments are investigated promptly and corrected.
“We will agree affordable repayment plans and when issuing debt management notifications signpost to independent advice services.
“We are also furthering a trial of text message reminders to help carers to fully understand their responsibility to report changes in their circumstances.”
The changes stem from the DWP's launch of an independent in October 2024.
Led in collaboration with the former Chief Executive of Rights UK, the findings of the review are set to be published this .
A revealed that thousands of people on other benefits have been hit with repayment demands even though they do not owe a penny.
TOO LITTLE TOO LATE
According to DWP data, as of March 2025, 143,922 individuals have outstanding carer's allowance debts, totalling over £151 million.
Carers reported overpayments ranging from £150 to £20,000, with the average overpayment during the 2023/25 financial year standing at £988.
There's no time limit on how far back the DWP can go to spot erroneous carer's allowance payments and demand money back.
Karina Moon, 62, is just one example of the .
The Department for Work and Pensions (DWP) told the single mother of one from North that she must repay £11,292.75 of her carer's allowance or face fraud charges.
In another shocking case, a father who looks after his ill son had to sell his home to .
, 64, from Leyland in , was told he would have to repay the eye-watering sum due to a mistake he made when first applying for the benefit.
saying he was unemployed when, in fact, he was earning £7.50 an hour as a self-employed taxi driver.
However, the DWP failed to notify Henderson, blaming it his responsibility to notify the department of any changes in circumstances.
DON'T GET CAUGHT OUT
If you breach the £196 earnings limit, you should try and proactively report it to the DWP as it is classed as a change in circumstances.
You can report any change in circumstances online via the government's website.
But you'll need your(NI) number to hand, details of the person you're caring for and details of the change.
If you have been overpaid carer's allowance, you must pay it back in full or in instalments via the DWP Debt Management platform.
If you don't do this, the DWP can take deductions from your work salary or even pass your case on to a collector.
If you don't engage with the debt collector, it may then take your case to the county .
You can dispute an overpayment if you disagree with it, but you'll need evidence as to why you claim not to have overpaid.
You can do this through what's known as a “mandatory reconsideration,” which you can submit to the DWP online, by phone, or by letter.
The decision letter you receive from the DWP will contain the specific contact details to which you must send correspondence.
Once the DWP has received your mandatory reconsideration, you will receive a “mandatory reconsideration notice” informing you whether it has changed its decision.
If you disagree with that outcome, you can appeal to the and Child Support Tribunal.
A judge will listen to both sides of the argument before making a decision.
