Unpaid carers’ benefit debts could be written off – what you need to know

Tens of thousands of unpaid carers could have their debts wiped and may have money returned to them following the outcome of a review into the overpayments scandal.

Many carers were left owing large sums after unknowingly breaching strict earnings rules, sometimes by just a few pounds, which triggered demands to repay benefits they had already received. 

Chancellor Rachel Reeves set aside £75m at last year’s Autumn Budget to deal with the issue, which has caused huge emotional and financial distress for many carers.

Here Which? explains what you need to know about the overpayments scandal, and what the government is doing to address it.

What is the overpayments scandal?

The issue centres on carer’s allowance, a government benefit for people providing regular and substantial care to someone who is disabled. The allowance is worth £83.30 a week in the 2025-26 tax year. 

To qualify, you must spend at least 35 hours a week caring for someone who receives a qualifying disability benefit and must not earn more than £196 a week after tax. This threshold was previously £151.

There is currently no taper on the earnings limit, meaning it acts as a cliff edge. Earning even £1 over the threshold can make you ineligible for the benefit.

This was the root of the overpayments scandal, with many carers breaching the limit without realising it, often due to fluctuating pay or a Christmas bonus.

Any breach is treated as an overpayment which must be repaid, and by February 2025 the Department for Work and Pensions (DWP) was seeking to recover money from nearly 87,000 carers.

The charity Carers UK has published multiple cases of carers on low incomes who were left with debts running into thousands of pounds as a result of overpayments. Some carers have also faced criminal charges, despite a National Audit Office report finding that only a small number of cases involved proven fraud.

• Find out more: carer's allowance explained

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How has the government responded?

Following sustained pressure, the government commissioned an independent review, which was published in November 2025.

The review said the way the DWP assessed carers’ earnings was unclear and inconsistent, making it difficult for some carers to understand whether they were complying with the rules. It also highlighted the role of the earnings threshold in how quickly overpayments could build up, particularly for carers in paid work.

In response to the findings, Chancellor Rachel Reeves announced £75m in funding at last year’s Autumn Budget to address the issue.

This includes a commitment to reassess cases dating back to 2015 through a new ‘reassessment service’. Where fluctuating earnings have been wrongly assessed, the government says it will repay money or write off debts, including cases where carers have already repaid overpayments in full.

The DWP has also said it will look again at the earnings threshold, including whether to introduce a taper, and improve how it communicates with carers.

• Find out more: carer's allowance overpayments – what you need to know 

What to do if you think you may have been affected

Anyone who has been asked to repay carer’s allowance since 2015 should be eligible for a reassessment. If you went over the earnings limit because of fluctuating pay or a one-off bonus, there is a chance your debt could be written off and any repayments returned.

The DWP says you should not usually need to contact it directly, as most affected carers will be contacted as part of the reassessment process. Further details about how the service will work are expected in early 2026.

Carers UK also has a support page with more information about the issue, as well as details of organisations offering help and advice.