Source · Select Committees · Public Accounts Committee
Recommendation 7
7
Accepted
Update Committee on progress resolving Carer’s Allowance overpayments due to inaccurate guidance
Recommendation
Inaccurate operational guidance has led the Department to incorrectly assess around 26,000 carers as having been overpaid Carer’s Allowance. The main cause of Carer’s Allowance overpayments is claimants having earnings which exceed the permitted limit. The Independent Review of Carer’s Allowance Overpayments, which was published in November 2025, found that the prevalence of earnings- related overpayments had been caused by systemic issues that prevented carers from fulfilling their responsibility to report information about their circumstances. This included the Department having operational guidance that was inconsistent with the governing regulations and that did not allow staff discretion to average fluctuating earnings where claimants had an irregular earnings pattern. The Department estimates that, over the past 10 years, about 26,000 people were incorrectly recorded as having been overpaid Carer’s Allowance as a result. It has committed to put this right and believes it will take around two years to identify all those affected, with 200,000 cases reviewed in the process. A lack of integrated, concerted leadership from the Department allowed this issue to persist, and it must now work quickly to provide redress to the people affected. recommendation Within six months, DWP should write to update the Committee on its progress with identifying and resolving the cases of carers affected by its inaccurate guidance. 6 1 Levels of fraud and error Introduction
Government Response Summary
The government accepts the recommendation and commits to writing to both the Public Accounts and Work and Pensions Committees every six months with progress updates on identifying and resolving affected carer cases. They are also modernising Carer's Allowance earnings treatment and reassessing an estimated 26,000 cases.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. review and has appointed a Senior Responsible Owner to make sure it delivers on these. The department has already increased the weekly Carer’s Allowance (CA) earnings limit by a record amount; changed some of its guidance; and are working with users and carers’ organisations to make sure communications work for customers. Going forward, the government will be modernising the treatment of earnings in CA to help reduce the number of overpayments occurring in future. This is being explored through discovery work on the possibility of automating the calculation of earnings and potential solutions to reduce the impact of the current cliff edge, including exploring an earnings rule with a taper. The department will continue putting things right by reassessing affected cases, and potentially reducing, cancelling, or refunding debts for an estimated 26,000 carers. More detail on the reassessment exercise will be made public soon. In most cases, the department will contact people affected if it requires more information to conduct the reassessment. The department will write to both the Public Accounts and Work and Pensions Committees every six months with a progress update. This will enable the Committees to scrutinise progress. The department will also include information in its Annual Report and Accounts.