DWP to Review and Repay Carer’s Allowance Overpayments – What You Need to Know

Thousands of unpaid carers in the UK may finally get justice as the Department for Work and Pensions (DWP) has announced a sweeping review of Carer’s Allowance overpayments—some of which may be reduced, cancelled, or even refunded. The move follows findings from the independent Sayce Review, which revealed that unclear guidance on earnings reporting left many carers unknowingly in debt.

Let’s break down what this means, who it affects, and how you can find out if you’re owed a refund.

Review

The DWP confirmed that overpayments related to earnings rules between 2015 and summer 2025 will now be reassessed. During this period, guidance on how carers should report fluctuating earnings was unclear, leading many to breach the weekly earnings limit without realising it.

Tens of thousands of carers—already managing 35+ hours of unpaid care alongside part-time work—ended up with unexpected debts. Now, many of these cases will be reviewed and corrected under a new government initiative known as the Plan for Change.

Findings

The Sayce Review, commissioned in October 2024, found major flaws in how the DWP communicated wage averaging policies. Carers didn’t receive clear instructions on how to report fluctuating incomes, especially in jobs with variable hours like zero-hour contracts or gig work.

As a result, the DWP now admits the system let carers down. Work and Pensions Secretary Pat McFadden acknowledged that the guidance was confusing and stated:

“Rebuilding trust isn’t about warm words – it’s about action and accountability.”

Refunds

So what’s actually changing?

• Carers who were overpaid due to unclear guidance will have their cases reassessed.
• If the DWP finds the overpayment was lower than originally calculated, debts will be reduced or wiped entirely.
• If you’ve already repaid money, you could get a refund.
• You don’t need to contact DWP unless instructed—they’ll review most cases automatically.

Details for those who wish to request a review manually will be published soon.

Allowance

Here’s a quick refresher on how Carer’s Allowance works:

• You receive £83.30 per week
• You must provide at least 35 hours of unpaid care per week
• The person you care for must be receiving a qualifying disability benefit
• You must earn less than the earnings threshold, which has now risen to £196 per week as of 2025

This increase of £45 is the largest ever and will benefit over 60,000 carers by 2030.

Fixes

The DWP isn’t just reviewing past cases—it’s reforming the system to prevent this from happening again. Here’s what’s already being done:

Fix	Status
Raised earnings threshold to £196/week	Implemented
Hired more staff to process wage reports	Ongoing
Updated internal guidance	In progress
Clear letters explaining reporting rules	Being rolled out
Appointed a senior owner for oversight	Confirmed

The review made 40 recommendations, most of which the government has accepted.

Future

In the long run, the DWP is planning to modernise Carer’s Allowance as part of its broader Plan for Change. This includes making benefit systems fairer, clearer, and more user-friendly, especially for unpaid carers who play a vital role in society.

This announcement also comes alongside wider efforts to tackle fraud and error, including the Fraud, Error and Recovery Bill, which aims to save £9.6 billion by 2030.

Action

For now, here’s what you should do:

1. Wait for official contact – The DWP will reassess most cases automatically.
2. Watch your post – If you’re affected, you’ll receive a letter explaining your case and next steps.
3. Stay informed – Check gov.uk for future updates on how to request a review manually.
4. Double-check your own case if you believe your overpayment was unfair—especially if your earnings fluctuated.

Unpaid carers do essential work—and it’s only fair that they’re supported, not penalised, by the system. This review is a step toward correcting years of confusion and miscommunication.

FAQs