Carer's Allowance: 10,000s set to have outrageous overpayment debts wiped or reduced as cliff-edge reform moves closer

The action comes in response to findings from the independent Sayce review into Carer's Allowance published today (25 November 2025). The review, which launched in October 2024, looked at how and why overpayments happen, proposed changes to minimise future risk, and examined how the Department for Work and Pensions (DWP) can best support those affected.

We've long-campaigned for changes to be made to Carer's Allowance – in particular its cliff-edge, which sees unpaid carers lose the current £83-a-week support if they earn just a penny over £196. Worse, if that happens, the system means they're often still paid the allowance for months, or even years. Then, even though they may have only earned a pound or two more, they're later asked for unaffordable £100s or £1,000s back.

Tens of thousands of overpayments to be reviewed

In response to the review, the DWP admitted that unpaid carers were "let down" by confusing rules in place between 2015 and summer 2025. This included unclear guidance on when carers needed to report changes in their earnings to the DWP, which meant tens of thousands of unpaid carers in paid employment built up debts without realising they had breached the weekly earnings limit.

The Government has now agreed to reassess the overpayments of 185,000 unpaid carers – though, according to its own analysis, it's estimated that only around 26,000 unpaid carers could be eligible for any adjustments.

It's said that where it finds overpayments were lower than originally calculated, carers will either have their debts reduced or wiped entirely – with any money already repaid, automatically refunded. Most people will have their cases reassessed without needing to contact the DWP, with details on this to follow in due course.

As part of our recommendations, we'd urged the review to "look at the situation retrospectively for those carers who are facing requests for crippling back-payments" – highlighting the case of MoneySaver Heather who'd been asked to repay £20,000.

Action promised on cliff-edge

The Government has also agreed with recommendations to resolve the cliff-edge, saying that this work is "vital" and that it's already working on options to remove or reduce its impact. It added that it has begun to explore potential short- and long-term solutions, including the possibility of an earnings taper – as is currently the case with Universal Credit.

A taper is something we've been calling for as this would allow carers some breathing room, especially where income is not fixed week-to-week, and would result in smaller values being due where overpayments do still occur. 

Martin has previously described the way the cliff-edge is designed as "broken, old-fashioned, unjust and in need of urgent change".

Other key recommendations

In total, 40 recommendations were made by the review, with the Government accepting 38 of them. The DWP says some of the changes it's already made include:

• Updating internal guidance so staff properly record and explain wage fluctuation decisions when dealing with overpayments.

• Hiring additional staff to process earnings notifications more quickly to prevent large debts building up over time.

• Ensuring letters to unpaid carers clearly explain what changes need reporting to the DWP.

The Government has also launched a review of employment rights for unpaid carers, which will look at the rights carers currently have and identify where any improvements might be needed to help carers balance their work with caring responsibilities.