Last week, Government published its new Fraud and Error statistics which contain new figures on Carer’s Allowance.
Analysing this work, Carers UK has estimated that at least £357 million of Carer's Allowance has been overpaid in relation to earnings by the Department for Work and Pensions since 2019. During this time the DWP has failed to act swiftly on overpayments alerts, leaving many unpaid carers who had unwittingly gone over the earnings limit for Carer’s Allowance, with large debts.
This latest Fraud and Error publication shows the lowest recorded level of fraud to date on Carer’s Allowance earnings overpayments which is a move in the right direction, but this level could have been far lower, if the Government had acted earlier.
The DWP attributes the overall fall of fraud and error rates in Carer's Allowance (from 5.2% in 2020 to 3.9% in 2025) to its success with the Verify Earnings and Pension (VEP) system. We know that only 50%, at the most, of cases identified through this system were being investigated by the Carer’s Allowance team through this period. This rate could have been lower had the Government investigated 100% of alerts, telling carers far earlier about overpayments.
The DWP received strong recommendations as far back as 2019 to ensure that the Carer’s Allowance Unit was properly resourced to investigate matches flagged by the VEP system, but high levels of incorrect payments have continued.
In 2019, Carers UK demonstrated the outdated system was already failing unpaid carers, with little information for them to make decisions and understand how their incomes would be affected by earnings.
Helen Walker, Chief Executive of Carers UK, said:
“There have been missed opportunities to alert carers earlier, resulting in misery and hardship for many carers and their families who have inadvertently breached the earnings threshold. Unpaid carers often tell us that the DWP is short on advice and support and quick to penalise mistakes.
“Government could have continued to measure fraud accurately from 2020 – assessing if the alerts system was working as claimed but these figures are further proof of a system which lacks transparency and needs better, more robust management.
“We are pleased that Liz Sayce OBE is undertaking a review of the Carer's Allowance overpayments scandal, and that the Government has said that it will increase resources for the team tackling overpayments - to act immediately on 100% of VEP alerts. However, in the meantime, they intend to tackle the backlog of overpayments, which is likely to see more large overpayments incurred, inflicting more pain and misery on unpaid carers.
“Given that unpaid carers were falsely assured that the problem would be largely resolved in 2019, they deserve better, and we've asked Government to strike off debts where they could have told carers sooner.”