DWP announces enhanced notification strategy for potential overpayments

The Department for Work and Pensions (DWP) has announced an enhanced notification strategy for potential overpayments, under which it would "explore the use of targeted text messages or emails to alert claimants and encourage them to contact the department when the DWP is made aware of a potential overpayment"¹. The announcement was reported on 29 May 2024, in coverage of Carer's Allowance overpayments¹.

The strategy sits alongside wider scrutiny of Carer's Allowance. The National Audit Office (NAO), the government spending watchdog, said it will investigate the issue following requests from the work and pensions select committee and the charity Carers UK¹. The NAO said its intervention was triggered by public and political concerns over the mounting human and financial costs of Carer's Allowance overpayments, and its investigation comes almost exactly five years after it published a critical inquiry report highlighting serial failures by the DWP in this area¹. In April 2024, former Conservative Work and Pensions Secretary Sir Iain Duncan Smith called for the DWP to investigate¹. He said: "The best thing is for the DWP now to pause these demands and review carefully what was behind all of this to make sure these are not mistakes by the DWP but are genuinely about individuals failing to notify the department"¹.

Carer's Allowance is worth £81.90 a week for the 2024-25 tax year¹. Claimants must spend at least 35 hours a week caring for someone receiving a qualifying disability benefit, be 16 or over and not be in full-time education¹. Earnings cannot exceed £151 per week after tax, National Insurance and certain expenses in 2024-25¹. There is no taper on that threshold, so earning £1 more makes a claimant ineligible, and continuing to receive the allowance after breaching the limit is treated as an overpayment that must be repaid¹. Recipients also cannot get the full amount of both Carer's Allowance and their state pension at the same time; if a pension is £81.90 a week or more, no Carer's Allowance payment is made¹. As of February 2023, the DWP said it was seeking to recover 145,567 overpayments of Carer's Allowance¹. In 2022-23, 26,000 carers received overpayments¹.

Emily Holzhausen, director of policy and public affairs at Carers UK, said: "Carers often say they have made the mistake unwittingly; they don't realise a small pay rise or Christmas bonus has taken them over the limit. Many are also paid irregularly, making it hard for them to work out their overall income"¹. She added: "There's not a moment to lose for reform, carers have been waiting far too long for this"¹.

Carers UK has launched a manifesto calling on all political parties to "commit to a new social contract for unpaid carers"¹. Its calls include raising Carer's Allowance by at least £11.10 a week in England and Wales; increasing the earnings limit to the value of 21 hours a week at the National Living Wage rate and defining that link in law; reforming eligibility rules to give access to a lower rate for those caring between 20 and 35 hours a week and enabling more than one person to receive the benefit where multiple people care for the same person; providing additional financial support to carers of state pension age, including a new non-means-tested payment, and reviewing pension rules for carers; modernising and digitising delivery of Carer's Allowance to protect carers from overpayments and allow faster payment adjustments; and building new responsibilities into the NHS to recognise unpaid carers' health and promote their wellbeing¹.

Why it matters for households

People receiving Carer's Allowance face repayment demands where earnings or a state pension breach the rules, and the absence of a taper means a small change in pay can make the whole award repayable¹. The DWP's stated aim is to contact claimants earlier, by text or email, when it becomes aware of a potential overpayment¹. The scale is significant: 145,567 Carer's Allowance overpayments were being pursued as of February 2023, and 26,000 carers received overpayments in 2022-23¹. Repayments can take carers on low incomes years or even decades to clear¹. The benefit overpayments guide sets out how deductions from benefits work.

What happens next

The NAO has said it will investigate Carer's Allowance overpayments, following requests from the work and pensions select committee and Carers UK¹. No date for the investigation or its findings has been reported¹. The DWP has said it would explore targeted text messages or emails as part of the enhanced notification strategy; no start date or further detail on that has been reported¹. Carers UK's manifesto calls are directed at all political parties¹.