Carer’s Allowance Overpayments

Jim Shannon Excerpts

Tuesday 14th April 2026 Westminster Hall

[Anna Dixon (Shipley) (Lab)]

I beg to move,

That this House has considered the matter of Carer’s Allowance overpayments.

It is a pleasure to serve under your chairmanship, Sir Roger. I thank Members for joining me here in Westminster Hall. I have committed my career to securing better care and support for older people and their family carers, and I continue that work here in Parliament as chair of the all-party parliamentary group on carers.

This year marks a significant milestone for carers: it has been 50 years since carer’s allowance was first introduced. It was known originally as the invalid care allowance, and it was the first benefit to recognise the financial sacrifices of unpaid carers. It has made a huge difference, providing vital financial support to those who give 35 hours or more per week in unpaid care. I am proud that it was a Labour Government that introduced carer’s allowance back in 1976, and I am just as proud that this Labour Government and Chancellor increased the earnings threshold from £151 to £196 per week—the largest increase since the benefit was introduced—and again this month to £204 per week, as promised. The world has changed a lot since Harold Wilson was Prime Minister, but some things remain the same, and Labour is still putting its money where its mouth is and standing up for carers.

Supporting carers should be a moral mission of any Government. There are 5.8 million unpaid carers in the UK, and the economic value of their contribution is some £184 billion per year, which is more than the entire NHS budget in England. However, despite the value that carers bring to our society, we often fail to value them. According to Carers UK, 1.2 million unpaid carers in the UK live in poverty, and around half of carers cut back on essentials in 2025.

There is a multitude of reasons for carer poverty. Many carers give up paid work, but many juggle paid work and unpaid care, often reducing their hours, harming their careers and impoverishing themselves. It is for all those reasons that the carer’s allowance overpayment scandal is hard to stomach.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for bringing this subject forward. Does she not agree that the amount of money the Government have saved from the unpaid labour of carers is astronomical, and that unless the Department can prove that there was a deliberate overclaim, discretion must be available? These people, whose lives are dedicated to the care of others, do not need the stress of paying a penalty for a mistake and thereby being treated as a criminal.

[Anna Dixon]

I absolutely agree with the hon. Gentleman that the impact of the overpayments on carers is terrible, and I am going to share the story of someone who was affected. I am sure others have heard similar shocking stories. As many as one in five unpaid carers who claim carer’s allowance and work part time were hit with overpayments. Thousands of carers have been left with huge debts and the fear of financial ruin.

Helen cares for her son Robin. He was born with a heart condition, respiratory vulnerabilities, developmental delay, mobility issues and Down’s syndrome. Helen gave up work as a teacher to support Robin and she relied on carer’s allowance. She also received some royalties for online resources that she had created as an education provider. She was paid those every six months, but the Department for Work and Pensions considered them as monthly earnings. It stopped her carer’s allowance and informed her that she had incurred overpayments going back over four years. She was charged more than £2,000 and told to pay back £50 a week. In her words,

“there was no care of how we would live or survive. It took me three very long years to repay the debt. It hung over like a great shadow, the letters, the fear of what could come. We were devastated by the department’s actions. Carers just don’t have bank balances that can stretch and withstand such pressures…you are so vulnerable…it shouldn’t be this difficult”.

As I have said, Helen’s is not an isolated case; thousands of carers are in this position, not as a result of failure on their part to report to and notify the DWP, but owing to a failure of Government. This scandal is a stain on the record of the British state.

I therefore commend this Labour Government for asking Liz Sayce to conduct an independent review of carer’s allowance overpayments. She made it clear that overpayments were caused

“not by widespread individual error by carers in reporting their earnings but by systemic issues preventing them from fulfilling their responsibility to report.”

I welcome the fact that the Government have accepted the vast majority of her recommendations and set aside £75 million to implement them.

Among other things, the review called on the Government to reform the earnings averaging processes and guidance, as well as that for allowable expenses, so that there is clarity, transparency and predictability, and it called for a thorough reassessment of cases to right the wrongs and deliver redress. It called for creative short-term solutions to address the cliff-edge crisis, while the DWP works on a longer-term plan. That is vital. If someone earns one penny over the earnings limit, they have to pay back the whole weekly carer’s allowance. The Sayce review found that although the earnings limit cliff edge does not itself cause overpayments, it dramatically increases their scale and impact, negatively affecting people’s health, finances, wellbeing and opportunities to work. Will the Minister update us on progress on the introduction of a taper system?

Liz Sayce recommended a whole range of other reforms, from upgrading computer systems to using more empathetic language, improving the join-up between types of benefits and simplifying the system. I thank her and her team for completing this crucial task. I urge the Minister to implement the recommendations with urgency and to set out the timeline for doing so.

Turning to those affected, I welcome yesterday’s announcement that the Government have launched an audit of more than 200,000 carer’s allowance cases affected by unclear Government guidance that was in place between 2015 and 2025. The cases will be reviewed, and debts potentially reduced, cancelled or refunded for some 25,000 unpaid carers. That is excellent news and I am sure the Minister will say more. However, I believe that there are several categories of people who have been adversely affected whose cases remain outstanding. The DWP appears to be accepting responsibility only for those affected by the unlawful guidance on average earnings and not for the lack of clear guidance on expenses deductions.

Will the Minister ensure, as the audit begins, that the DWP fully addresses all aspects of maladministration? First, there should be consideration of cases in which the DWP held information regarding expenses but did not act on it or make corrections for many years. Secondly, I urge him to ensure that cases in which data has been “lost” by the DWP are dealt with as Liz Sayce recommended, and treated as cases of official error unless the DWP can prove otherwise. Thirdly, in the cases of those affected by the failure to adjust universal credit correctly, Sayce recommended that the DWP should pay UC arrears. I would be grateful if the Minister addressed whether the audit will include reviews for those missing groups.