Ministers set aside 75m to fix failures that caused carer's allowance crisis

"Ministers have set aside 75m to fix systemic failures that caused hundreds of thousands of unpaid carers to be hit with huge bills after unwittingly breaching complex and confusing benefit rules. A damning independent review, published on Tuesday, found that outdated technology, unclear guidance and a failure of leadership by ministers and senior welfare officials had led to punitive sanctions on vulnerable families."

"Pat McFadden, the welfare secretary, promised this week that the government would fix the mess he said had been left by previous administrations. The Department for Work and Pensions (DWP) has said it will reassess 145,000 cases where people were overpaid carer's allowance, with some of those debts likely to be struck off or reimbursed. However, the DWP has stopped short of issuing a formal apology or offering compensation."

"Figures released as part of Rachel Reeves's budget on Wednesday showed that ministers have earmarked 75m from 2026 to fix the issues raised by the review, led by the disability rights expert Liz Sayce. It is understood that most of the 75m will pay for the large number of officials needed to reassess the 145,000 overpayments. A smaller amount is expected to be used to either write off debts or reimburse unpaid carers who have already paid."

Outdated technology, unclear operational guidance and leadership failures produced punitive sanctions and prosecutions of many unpaid carers, often for non-wilful errors. The Department for Work and Pensions will reassess 145,000 carer's allowance overpayment cases dating from 2015 to 2025, with some debts expected to be written off or reimbursed. Ministers have earmarked 75m across 2026–27 to 2028–29, largely to fund officials needed to conduct reassessments, with a smaller portion for debt relief or reimbursements. Incorrect guidance issued in 2020 mainly affected carers with fluctuating weekly or monthly earnings despite averages within allowed limits. No formal apology or comprehensive compensation has been offered.

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