New government figures have revealed a growing crisis among unpaid carers in the UK, with nearly 100,000 claimants struggling to repay Carer’s Allowance debts due to earnings exceeding the strict threshold.
Under current rules, carers who provide at least 35 hours of care per week can receive £81.90 per week in Carer’s Allowance, as long as their earnings stay below £151 per week. However, if a carer earns even a few pence over the limit, they must repay the entire benefit for that week.
With some carers unknowingly exceeding the limit, many are now facing debts of up to £20,000—sparking widespread outrage and calls for urgent reform.
The Scale of the Problem
The issue was brought to light in a written question to the government, revealing that:
- 99,349 carers have outstanding overpayment debts due to exceeding the earnings limit.
- 143,922 people currently owe money to the Department for Work and Pensions (DWP) for Carer’s Allowance overpayments.
Breakdown
| Postcode Area | Total with Debt | Due to Earnings Over Limit |
|---|---|---|
| England | 116,874 | 81,503 |
| Wales | 7,657 | 5,359 |
| Scotland | 13,922 | 9,112 |
| Northern Ireland | 5,469 | 3,375 |
This means that in England alone, over 81,000 carers have fallen into debt simply because they earned too much to qualify for a single week of payments.
Carers Falling Into Debt
The strict earnings limit creates a “cliff edge” system, meaning carers either qualify for the full benefit or receive nothing at all. Even earning a few pence over the threshold results in a total loss of that week’s allowance.
This has led to massive overpayment debts, often without carers being immediately notified by the DWP. As a result:
- Overpayments go unnoticed for months or years, building up large debts.
- Some carers now owe thousands of pounds, with reported debts ranging from £150 to £20,000.
- Many carers are facing legal action and long-term financial difficulties as they struggle to repay the government.
Government’s Response
The DWP has acknowledged the issue and is increasing the earnings threshold to £196 per week from April 2025.
Government minister Andrew Weston stated:
“This is the biggest ever cash increase in the earnings threshold for Carer’s Allowance, benefitting more than 60,000 carers by 2029/30.”
However, campaigners argue this is not enough, as the fundamental issue—the harsh “cliff edge” system—remains unchanged.
Carer’s Allowance Scandal
Over the past six years, total outstanding Carer’s Allowance debt has risen by £100 million, now exceeding £250 million.
A December 2024 report from the National Audit Office (NAO) highlighted:
- The number of carers in debt has increased every year since 2018, rising from 80,169 to 136,730 in 2024.
- The “cliff edge” threshold makes it easy for carers to accidentally exceed the limit and face major financial penalties.
- The DWP needs better systems to prevent overpayments, rather than relying on carers to report minor changes in earnings.
The Carers UK charity has demanded urgent reforms, arguing that carers are:
- Unfairly punished for small changes in income.
- Trapped in long-term debt due to overpayment demands.
- Experiencing financial hardship and mental health struggles as a result.
What Happens Next?
In October 2024, the government announced a review into:
- How overpayments occur and whether they can be prevented.
- Possible changes to stop carers from unintentionally exceeding the limit.
- Support options for those already in debt.
While these discussions continue, thousands of carers remain at risk of losing their financial support, forcing them into difficult decisions about work, caregiving, and financial stability.
Final Thoughts
The Carer’s Allowance crisis highlights a deeply flawed system that unfairly penalizes unpaid carers—who save the government billions in care costs every year.
While raising the earnings threshold is a step forward, campaigners argue that only a complete overhaul of the system—including a gradual reduction rather than a total cut-off—will provide fair support for the UK’s unpaid carers.
Until reforms are fully implemented, thousands of carers will continue to struggle with rising debts, making it harder for them to provide the essential care that society depends on.
FAQs
Why do carers have to repay Carer’s Allowance?
If a carer earns over £151 per week, they must repay 100% of that week’s benefit.
How many carers are in debt due to overpayments?
Nearly 100,000 carers owe money for exceeding the earnings limit.
What is the new Carer’s Allowance earnings limit?
From April 2025, the earnings threshold will rise from £151 to £196 per week.
What is the ‘cliff edge’ problem with Carer’s Allowance?
Earning just a few pence over the limit means losing the full week’s benefit.
Is the government reviewing Carer’s Allowance rules?
Yes, a review is ongoing to assess overpayments and possible reforms.
