Thousands of unpaid carers will have their cases reassessed after an official review found they had been left with huge debts caused by systemic failures.
Former charity boss Liz Sayce found confusing guidance on Carer’s Allowance – given to those providing 35 hours of unpaid care a week – had left thousands with fines and surprise bills, sometimes running into thousands of pounds.
The Guardian newspaper uncovered hundreds of carers claiming Carer’s Allowance had been convicted of benefit fraud, while others claimed they were harassed for money by officials.
Work and Pensions Secretary Pat McFadden said the government will “put right” any failures impacting carers.
“We inherited this mess from the previous government, but we’ve listened to carers, commissioned an independent review, and are now making good for those affected,” McFadden said.
“Rebuilding trust isn’t about warm words – it’s about action, accountability, and making sure our support works for the people who need it most.”
The Sayce review found between 2015 and the summer of 2025 the official Carer’s Allowance guidance was “unclear” and “ill-defined” – preventing many carers from properly reporting their earnings.
Unpaid carers who look after loved ones for at least 35 hours a week can claim £83.30 a week in Carer’s Allowance, as long as their weekly earnings stay under £196.
But under a so-called “cliff-edge” earnings rule, anyone who exceeds this limit by as little as 1p must repay that entire week’s carer’s allowance.
The Department for Work and Pensions (DWP) also levies a £50 penalty on anyone who fails to properly declare a change in their earnings.
The law allows income to be “averaged” over time, but Ms Sayce found “broadly drawn” regulations led to multiple interpretations by both DWP and the courts.
As a result, carers who worked irregular hours or received variable wages often assumed their income could be averaged, but were instead fined by DWP.
In her report Ms Sayce said “this wasn’t wilful rule-breaking – it simply wasn’t clear what earnings fluctuations carers should report”.
The report found the DWP also largely failed to warn carers in time when they went over the earnings limit, meaning overpayments in some cases were allowed to accumulate “for months or years” before unwitting carers were handed huge bills.
In a statement on Tuesday, the DWP said it will begin reassessing cases immediately and potentially cancel or repay debts.
Ms Sayce welcomed the announcements, saying the policy had “major impacts on carers’ health, finances and family wellbeing”.
Liberal Democrat Leader Sir Ed Davey said both Labour and the Tories should “apologise to the tens of thousands of carers who were treated so disgracefully in the last Parliament”.
Sir Ed welcomed the announcement but warned “many carers face many more months of being hounded, with changes not due to come into force for another year”.
Chief Executive of Carers UK Helen Walker said the government were “righting a clear wrong” and “addressing this injustice head on”.
“We are hopeful that this can be the start of rebuilding carers’ trust in the system and that this is a positive indication that the door is open for further change,” Ms Walker added.