DWP errors could mean some get big cash payouts

Unpaid carers caught up in a Department for Work and Pensions (DWP) fiasco could be in line for payouts of around £5,000 each, under plans being considered by ministers. More than 144,000 carers are currently repaying a total of £251million in so-called overpayments after being penalised for breaching strict earnings limits - often by just a few pence.

Some families have been hit with debts as high as £20,000, leaving them struggling financially. Using the widely reported “typical debt” of £5,000 per carer as a baseline, campaigners are urging ministers not just to refund overpayments, but to add extra compensation for stress, hardship, and the mental toll of being plunged into debt.

That could see payouts rise to as much as £15,000 per carer, pushing the total redress bill close to £1billion. The scandal centres on the “cliff-edge” penalty in Carer’s Allowance. Carers who breach the weekly £196 earnings limit by even a few pence can be forced to repay the entire year’s benefit, creating crippling debts.

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Failures in DWP administration meant many carers only discovered the problem years later. The new Welfare Secretary, Pat McFadden, is reviewing an independent report into the fiasco, drawn up by disability policy expert Liz Sayce, which is expected to be published later this year.

Sir Ed Davey, the Liberal Democrat leader, said: “I really hope the government will give the victims of this appalling scandal the compensation they deserve. It would be a milestone for carers across the country, and a victory for all those who have campaigned tirelessly for justice.”

Helen Walker, chief executive of Carers UK, added: “Far too many carers are currently repaying debts that the government should have told them about much earlier, or they should not have had in the first place. It’s been devastating for carers, many of whom have been badly hit financially and it’s taken an enormous toll on their mental health.”

A DWP spokesman said: “We don’t comment on speculation. We understand the huge difference carers make, as well as the struggles they may face. That’s why we have raised the carer’s allowance earnings threshold, benefiting more than 60,000 carers by 2029-30 – the biggest ever cash increase in the earnings threshold for carer’s allowance.”