Source · Select Committees · Public Accounts Committee
Recommendation 29
29
Accepted
DWP identifies 26,000 individuals affected by incorrect Carer's Allowance guidance, initiating £75m review.
Recommendation
We asked the Department how long it would take to reassess all the cases that might have been affected by its incorrect guidance on averaging earnings. The Department said it estimated that about 26,000 people would have been affected over the past 10 years, but it would need to review 200,000 cases to identify the individuals involved. It thought that this might take about two years. The Department told us that it was mobilising teams to address this matter in the same way as it had addressed systemic underpayments found in other parts of the welfare system, such as in State Pension.56 It had £75 million available to build and run the teams and to fund payments to customers.57 The Permanent Secretary said that he was sorry for all of those affected by this issue but that he was determined to put it right.58
Government Response Summary
The department will reassess affected cases and potentially reduce, cancel, or refund debts for an estimated 26,000 carers, with the first of rolling 6 monthly updates in September 2026 and will write to the Public Accounts and Work and Pensions Committees every six months with a progress update and include information in its Annual Report and Accounts.
Government Response
Accepted
HM Government
Accepted
Target implementation date: First of rolling 6 monthly updates in September 2026. 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. 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.