A DWP overhaul offers fresh hope to thousands of carers who have previously been required to repay up to £20,000 in benefit overpayments.
Households receiving carer's allowance currently face significant repayment demands if their weekly earnings exceed the crucial threshold.
As of March 2025, 143,922 individuals have outstanding carer's allowance debts, totalling over £151million, according to the Department for Work and Pensions (DWP).
Carer's allowance is paid to those providing at least 35 hours of unpaid care a week, in most cases to disabled or sick relatives.
It is currently paid at a weekly rate of £83.30, and anyone on the benefit can earn a second income from a job.
However, you can't earn more than £196 a week, or you'll lose all of your benefit allowance.
This is a different approach to other benefits, like Universal Credit, which has a tapered approach to earnings so that those working don't lose all their money at once.
So, if you breach the £196 a week "cliff edge", you'll also be forced to repay any carer's allowance payments you've been issued.
For instance, exceeding the limit by just £1 per week over the course of a year wouldn't result in a repayment demand of £52, but rather a staggering £4,330.
For years, DWP systems have failed to promptly flag breaches of the earnings limit, resulting in substantial overpayments that individuals are required to repay - unless they have monitored their own earnings closely.
Last year, reported that the DWP had opted to investigate and flag only 50% of claimants who had received overpayments.
However, the Government has now pledged to ensure that all claimants (100%) who receive payments after exceeding the cliff edge will be investigated and proactively notified.
A DWP Spokesperson said: "Carers are unseen heroes and we have made the biggest ever cash increase in the carer's allowance earnings threshold to make their lives easier.
"We are drafting in extra staff so the backlog of all under and overpayments are investigated promptly and corrected.
"We will agree affordable repayment plans and when issuing debt management notifications signpost to independent advice services.
"We are also furthering a trial of text message reminders to help carers to fully understand their responsibility to report changes in their circumstances."
The changes stem from the DWP's launch of an independent review into carer's allowance overpayments in October 2024.
Led in collaboration with the former Chief Executive of Disability Rights UK, the findings of the review are set to be published this summer.
A Sun Money investigation revealed that thousands of people on other benefits have been hit with repayment demands even though they do not owe a penny.
CARER'S allowance is a UK benefit designed to help people who have caring responsibilities for more than 35 hours each week.
Those eligible get £83.30 a week paid directly into bank accounts.
To qualify, the person you care for must already get one of these benefits:
You don't have to be related to the person or live with them to apply.
But if you share caring responsibilities with someone else, only one of you can make a claim.
The type of care you provide can vary, but includes things such as helping with washing or cooking, taking the person to medical appointments or helping out with household tasks such as shopping or organising bills.
To get the benefit, you must also meet a certain set of criteria:
Your earnings must also be £151 or less a week after tax, National Insurance and expenses.
You can apply for the carer's allowance online by visiting www.gov.uk/carers-allowance/how-to-claim.
According to DWP data, as of March 2025, 143,922 individuals have outstanding carer's allowance debts, totalling over £151 million.
Carers reported overpayments ranging from £150 to £20,000, with the average overpayment during the 2023/25 financial year standing at £988.
There's no time limit on how far back the DWP can go to spot erroneous carer's allowance payments and demand money back.
Karina Moon, 62, is just one example of the thousands asked to repay the benefit.
The Department for Work and Pensions (DWP) told the single mother of one from North Wales that she must repay £11,292.75 of her carer's allowance or face fraud charges.
In another shocking case, a father who looks after his ill son had to sell his home to pay back £20,000 in carer's allowance.
George Henderson, 64, from Leyland in Lancashire, was told he would have to repay the eye-watering sum due to a mistake he made when first applying for the benefit.
Henderson wrongly ticked a box saying he was unemployed when, in fact, he was earning £7.50 an hour as a self-employed taxi driver.
However, the DWP failed to notify Henderson, blaming it his responsibility to notify the department of any changes in circumstances.
If you breach the £196 earnings limit, you should try and proactively report it to the DWP as it is classed as a change in circumstances.
You can report any change in circumstances online via the government's website.
But you'll need your national insurance (NI) number to hand, details of the person you're caring for and details of the change.
If you have been overpaid carer's allowance, you must pay it back in full or in instalments via the DWP Debt Management platform.
If you don't do this, the DWP can take deductions from your work salary or even pass your case on to a debt collector.
If you don't engage with the debt collector, it may then take your case to the county courts.
You can dispute an overpayment if you disagree with it, but you'll need evidence as to why you claim not to have overpaid.
You can do this through what's known as a "mandatory reconsideration," which you can submit to the DWP online, by phone, or by letter.
The decision letter you receive from the DWP will contain the specific contact details to which you must send correspondence.
Once the DWP has received your mandatory reconsideration, you will receive a "mandatory reconsideration notice" informing you whether it has changed its decision.
If you disagree with that outcome, you can appeal to the Social Security and Child Support Tribunal.
A judge will listen to both sides of the argument before making a decision.
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity works out what you could get.
Entitledto's determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data.
You can use to determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
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