Carer’s Allowance Overpayments

Debate between Rushanara Ali and Anna Dixon

Tuesday 14th April 2026 Westminster Hall

[Anna Dixon]

I absolutely agree with the hon. Gentleman that the impact of the overpayments on carers is terrible, and I am going to share the story of someone who was affected. I am sure others have heard similar shocking stories. As many as one in five unpaid carers who claim carer’s allowance and work part time were hit with overpayments. Thousands of carers have been left with huge debts and the fear of financial ruin.

Helen cares for her son Robin. He was born with a heart condition, respiratory vulnerabilities, developmental delay, mobility issues and Down’s syndrome. Helen gave up work as a teacher to support Robin and she relied on carer’s allowance. She also received some royalties for online resources that she had created as an education provider. She was paid those every six months, but the Department for Work and Pensions considered them as monthly earnings. It stopped her carer’s allowance and informed her that she had incurred overpayments going back over four years. She was charged more than £2,000 and told to pay back £50 a week. In her words,

“there was no care of how we would live or survive. It took me three very long years to repay the debt. It hung over like a great shadow, the letters, the fear of what could come. We were devastated by the department’s actions. Carers just don’t have bank balances that can stretch and withstand such pressures…you are so vulnerable…it shouldn’t be this difficult”.

As I have said, Helen’s is not an isolated case; thousands of carers are in this position, not as a result of failure on their part to report to and notify the DWP, but owing to a failure of Government. This scandal is a stain on the record of the British state.

I therefore commend this Labour Government for asking Liz Sayce to conduct an independent review of carer’s allowance overpayments. She made it clear that overpayments were caused

“not by widespread individual error by carers in reporting their earnings but by systemic issues preventing them from fulfilling their responsibility to report.”

I welcome the fact that the Government have accepted the vast majority of her recommendations and set aside £75 million to implement them.

Among other things, the review called on the Government to reform the earnings averaging processes and guidance, as well as that for allowable expenses, so that there is clarity, transparency and predictability, and it called for a thorough reassessment of cases to right the wrongs and deliver redress. It called for creative short-term solutions to address the cliff-edge crisis, while the DWP works on a longer-term plan. That is vital. If someone earns one penny over the earnings limit, they have to pay back the whole weekly carer’s allowance. The Sayce review found that although the earnings limit cliff edge does not itself cause overpayments, it dramatically increases their scale and impact, negatively affecting people’s health, finances, wellbeing and opportunities to work. Will the Minister update us on progress on the introduction of a taper system?

Liz Sayce recommended a whole range of other reforms, from upgrading computer systems to using more empathetic language, improving the join-up between types of benefits and simplifying the system. I thank her and her team for completing this crucial task. I urge the Minister to implement the recommendations with urgency and to set out the timeline for doing so.

Turning to those affected, I welcome yesterday’s announcement that the Government have launched an audit of more than 200,000 carer’s allowance cases affected by unclear Government guidance that was in place between 2015 and 2025. The cases will be reviewed, and debts potentially reduced, cancelled or refunded for some 25,000 unpaid carers. That is excellent news and I am sure the Minister will say more. However, I believe that there are several categories of people who have been adversely affected whose cases remain outstanding. The DWP appears to be accepting responsibility only for those affected by the unlawful guidance on average earnings and not for the lack of clear guidance on expenses deductions.

Will the Minister ensure, as the audit begins, that the DWP fully addresses all aspects of maladministration? First, there should be consideration of cases in which the DWP held information regarding expenses but did not act on it or make corrections for many years. Secondly, I urge him to ensure that cases in which data has been “lost” by the DWP are dealt with as Liz Sayce recommended, and treated as cases of official error unless the DWP can prove otherwise. Thirdly, in the cases of those affected by the failure to adjust universal credit correctly, Sayce recommended that the DWP should pay UC arrears. I would be grateful if the Minister addressed whether the audit will include reviews for those missing groups.

[Rushanara Ali (Bethnal Green and Stepney) (Lab)]

I congratulate my hon. Friend on securing this important debate. She rightly highlights the important contribution that carers make to our country and the savings of £184 billion a year. The carer’s allowance scandal that this Government have had to deal with, which has taken place over a number of years, has parallels with the Post Office scandal in the way that individuals have been treated. Does she agree that the Department for Work and Pensions, which rejected a recommendation by the Work and Pensions Committee to undertake a regular audit of its progress on carers, should do that, so that we can see the progress the Department is making?

[Anna Dixon]

I am a member of the Public Accounts Committee, and we have requested that the DWP reports every six months on its progress on implementing the Sayce review. As a member of that Committee, I will certainly be keeping a close eye on progress.

My final point is about the culture in the DWP. I have had the opportunity to challenge its senior officials in the Public Accounts Committee, and I was shocked by the culture on display, which clearly regarded the victims of Government incompetence as benefit fraudsters. It disturbs me that that culture has been prevalent for so long and that, despite knowing about carer’s allowance overpayments for many years, the Department did little or nothing. As a Committee, we are clear that the lack of integrated and concerted leadership from the Department exacerbated the crisis. I ask the Minister for reassurance that he is confident that the senior team at DWP understand the nature of the harm done to carers, are fully committed to putting this right and do not adopt a defensive culture.

On the 50th anniversary of carer’s allowance, I call on this Labour Government to right the wrongs caused by the state, which have parallels with the Post Office Horizon scandal, as my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali) said, and to put right the scandal of carer’s allowance overpayments so that our carers are paid what they deserve and not punished for the dedication and care they provide.