Carer’s Allowance: Overpayments Review

Lord Palmer of Childs Hill Excerpts

Tuesday 18th November 2025 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I am grateful for my noble friend’s patience; I am afraid that I must ask her to be patient for just a little longer. On the important question of earnings-related overpayments, we are very conscious that some carers found this extremely difficult—hence the need for the report. As I said, we have committed to keeping the weekly carer’s allowance earnings limit pegged to 16 hours of work a week at the national living wage level. That meant that, last April, there was a record jump in the earnings limit from £151 a week to £196 a week. We will announce the new earnings limit from next April in the next few weeks. I hope the House appreciates how difficult this has been but also that we are determined to get to the bottom of it. Carer’s allowance is an unusual benefit: if you earn £1 below the threshold, you get the lot; if you earn £1 over it, you get nothing. It has taken quite some work, but we hope the report will be out very soon.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for that reassurance, and we will of course wait for the independent review. In the meantime, what steps are the Government taking to ensure that carers are not unfairly penalised for minor or unintentional breaches of earnings rules? Will they consider writing off historical overpayments where department error is a significant factor?

[Baroness Sherlock (Lab)]

My Lords, I am afraid the noble Lord will also have to be patient for just a little longer to hear what the Government will do in response to this. It was a very detailed report of over 100 pages, with lots of detailed recommendations; we have been through it in an equally detailed manner and will publish a proper response very shortly. In the meantime, the Government have done a number of things to make a difference. For example, we have already improved guidance to help staff make judgments about the way they treat overpayments in earnings. The crucial thing, which my noble friend just asked about, is that increasing the earnings limit by so much will mean that a lot of people will not be caught by this issue at all and, by the end of this decade, another 60,000 people will be able to claim carer’s allowance. We have already taken significant steps to improve things and will do more in the months ahead, but for the details I am afraid he must wait for the response to the report.