Source · Select Committees · Public Accounts Committee
Recommendation 28
28
Not Addressed
Independent review found DWP's incorrect guidance caused systemic Carer's Allowance overpayment issues.
Conclusion
The Independent Review of Carer’s Allowance Overpayments, published in November 2025, found that the prevalence of overpayments related to earnings had been caused not by widespread individual error by carers in reporting their earnings, but by systemic issues preventing them from fulfilling their responsibility to report. This included the Department’s operational guidance that was inconsistent with the governing regulations.54 The Department told us that the guidance it had issued in 2015 had not allowed its staff discretion to average fluctuating earnings where claimants had an irregular earnings pattern, despite the law allowing this.55
Government Response Summary
The government restates the committee's conclusion without providing a response.
Government Response
Not Addressed
HM Government
Not Addressed
Inaccurate operational guidance has led the department to incorrectly assess around 26,000 carers as having been overpaid Carer’s Allowance. 7. PAC 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. 7.1 The government agrees with the Committee’s recommendation. Recommendation implemented: First of rolling 6 monthly updates in September 2026. 7.2 The department has accepted 38 of the 40 recommendations set out in the Sayce 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. 7.3 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