Independent Review of Carer's Allowance Overpayments published with government response

The government published the Independent Review into earnings-related overpayments of Carer's Allowance, led by Liz Sayce OBE, and its own response to the report's recommendations on 25 November 2025¹. The review runs to 146 pages and the government response to 37 pages¹.

The Department for Work and Pensions is reassessing Carer's Allowance overpayments that took place between 10 April 2015 and 2 September 2025¹. The department says those affected may get a refund or have their debt reduced or cancelled, and that people do not need to contact the Carer's Allowance Unit about a reassessment, as DWP will make contact with a decision or if it needs more information¹.

A later DWP circular sets out the background to the overpayments. Carer's Allowance has a weekly earnings limit, and guidance dealt correctly with cases where weekly earnings were constant or fluctuated in a regular cycle, but where fluctuations were irregular the guidance did not accurately reflect the statutory position: it should have directed decision makers to consider averaging earnings over a period of weeks, and instead instructed them not to². The department says it has already updated instructions on how earnings are averaged and improved decision letters².

From 13 April 2026, ringfenced teams began work on the reassessment exercise for customers who may have incurred an inaccurate overpayment relating to their employment between April 2015 and 2 September 2025². The department expects around 25,000 cases to result in either lump sum payments or reductions in outstanding overpayments of Carer's Allowance². Around two thirds of people receiving Carer's Allowance are in a household also receiving means-tested benefits, mostly Universal Credit².

The Universal Credit, Housing Benefit and State Pension Credit (Carer's Allowance Reassessment Capital Disregard) (Amendment) Regulations 2026 (SI 2026/681) amend the Housing Benefit Regulations 2006 (SI 2006/213) and the Housing Benefit (Persons who have reached the qualifying age for state pension credit) Regulations 2006 (SI 2006/214) so that refund payments received as a result of reassessing Carer's Allowance overpayments are fully and indefinitely disregarded as capital from the date of issue². The circular states that where a person receives Universal Credit or the guaranteed credit element of Pension Credit there is no impact on their Housing Benefit claim, so the impact on local authorities is low².

Why it matters for households

The reassessment covers a period of more than ten years, from April 2015 to September 2025, so people who claimed Carer's Allowance while working during that time may be contacted by DWP about an overpayment that arose from how irregular earnings were treated¹. Outcomes set out by the department are a refund, a reduced debt or a cancelled debt¹. The department expects around 25,000 cases to produce lump sum payments or reductions in outstanding overpayments².

For anyone receiving means-tested benefits, the treatment of a refund as capital matters, because capital can affect entitlement. Under SI 2026/681, refunds from the reassessment are disregarded as capital in full and indefinitely from the date they are issued, and the circular states there is no impact on Housing Benefit claims for people receiving Universal Credit or the guaranteed credit element of Pension Credit². The rules on the earnings limit and on breaks from caring remain relevant to how earnings are assessed. Carer's Allowance is separate from Carer Support Payment in Scotland, and the two have different eligibility rules.

What happens next

The reassessment exercise began on 13 April 2026, with ringfenced teams working on cases². DWP says it will contact affected people with a decision or if it needs more information, and that people do not need to contact the Carer's Allowance Unit¹. Feedback on the government response can be sent by email to ca.opresponse@dwp.gov.uk¹. The department has not reported a completion date for the exercise.