Carers UK has today published a new report which brings together the experiences of 138 unpaid carers who have had a Carer’s Allowance overpayment.  

The earnings limit for Carer’s Allowance is £151 per week and going over this limit by just a few pence means carers need to pay back 100% of their Carer’s Allowance for that week - £81.90 at 2024/25 rate. Large overpayments can have a devastating impact on unpaid carers.  Many went over the limit unwittingly and despite having the information on carers’ earnings, the DWP did not take swift action in many cases, leading to a build-up of overpayments into large sums.  

• Carers reported receiving overpayments between £150 and £20,000, with the average overpayment being £4,000.  
• News of the overpayment also often comes as a shock to carers and takes many years to repay, causing them financial difficulties and having a serious impact on their mental health and wellbeing.  

• Many carers also decided to leave employment altogether or cut back on their hours.  

Improving the processes and design of Carer’s Allowance would therefore enable more unpaid carers to stay in the labour market for longer as well as reducing the risk of overpayments.  

Recommendations to the DWP include: 

• Sending alerts to carers when their earnings potentially breach the earnings limit 

• Improving information sharing and processes within the DWP 

• Improving the information available to carers and their interaction with DWP 

• Raising the Carer’s Allowance earnings limit to 21 hours per week and pegging it to the National Living Wage 

• Taking steps to remove the hard ‘cliff edge’ of the earnings limit and replacing this with a taper to earnings 

• Writing off substantial overpayments where carers could have been notified sooner 

• Conducting a full review of Carer’s Allowance level and its eligibility criteria  

We are continuing to gather the experiences of carers who have had an overpayment of Carer’s Allowance and they can be shared with us anonymously. Carers can follow this link here.

We are grateful to the Lloyds Bank Foundation for England and Wales for providing a grant to Carers UK to work to address the issue of overpayments of Carer’s Allowance and the earnings threshold.