UK (Parliament Politics Magazine) – Liberal Democrat leader Edward Davey calls on the government to suspend penalties on unpaid carers affected by errors in the carer’s allowance system.
As reported by The Guardian, Ed Davey urged the government to halt penalties on unpaid carers affected by the flawed carer’s allowance rules until reforms to the system are implemented.
Last year, an investigation revealed that hundreds of thousands of unpaid carers faced significant debts, and in some cases, legal action for alleged fraud, due to systemic errors in the design and administration of the benefit.
Despite pledging changes to carers’ allowance a year ago, the government faces pressure from campaigners amid concerns that hundreds of unpaid carers continue to be hit with new repayment demands each week.
What did Ed Davey say about carer repayments?
Ed Davey stated,
“It cannot be right that the government is still hounding carers for repayments, long after this scandal was exposed and even after we secured an independent review, but before anything has been done to put things right.”
He said,
“The government needs to pause repayments now, publish the review’s findings without further delay, and get on with fixing the system so it actually works for carers.”
The Liberal Democrats have tabled an amendment to the Fraud and Error Bill, urging the Department for Work and Pensions to suspend repayment demands on carers until the government implements its reform plans.
Lord Palmer, the Liberal Democrat work and pensions spokesperson in the Lords, said it was wrong for unpaid carers to continue being penalised by a system that is failing to function properly.
He described the carer’s allowance scandal as “a national disgrace.”
What campaigners are demanding on carer allowance overpayments?
Campaigners have consistently called for the cancellation of carers’ allowance overpayments, citing the previous government’s repeated failure to act on warnings raised both internally and by MPs.
Emily Holzhausen, director of policy and public affairs at Carers UK, stated,
“It’s critical that we see the publication of the independent review very quickly with a clear timeline for action to ensure that this scandal is addressed head on. With every day that goes by, unpaid carers are still being subjected to overpayments demands operating under what, everyone has acknowledged, is a broken system.”
She said,
“Given the devastating impact this can have on unpaid carers who unwittingly go over the earnings limit, it’s essential that we get this change as soon as possible to prevent more carers ending up in such a terrible situation.”
What did DWP say about carer allowance overpayments?
A DWP spokesperson stated,
“We’re on the side of carers. That’s why we’ve commissioned an independent review of carer’s allowance overpayments and delivered the biggest ever cash increase in the benefit’s earnings threshold – helping 60,000 carers by 2029-30.”
They said,
“We will respond to the independent review in due course and in the meantime, we must balance our duty to the taxpayer while ensuring carer’s allowance is administered fairly, accurately, and best supports those who use it.”
What did MPs and Lords say about carer allowance overpayments?
Apsana Begum, Labour MP for Poplar and Limehouse, posted on X,
“I support CarersUK’s calls for an urgent halt to the Carer’s Allowance overpayment debt rules. This is a scandal that thousands of carers continue to be caught up in unfairly. The repayments systems must stop now & the Govt review must at least conclude”
I support @CarersUK’s calls for an urgent halt to the Carer’s Allowance overpayment debt rules.
— Apsana Begum MP (@ApsanaBegumMP) March 21, 2025
This is a scandal that thousands of carers continue to be caught up in unfairly. The repayments systems must stop now & the Govt review must at least conclude.https://t.co/CtU7DdbbcQ
Prem Sikka, Lord Sikka, Member of the House of Lords, stated on X,
“£357m in carer’s allowance benefit paid out in error over the past six years because of UK official failures. Innocent people chased for debt, face anxiety, hardship, prosecution threats. A cliff edge approach to benefits needs to be abandoned.”
£357m in carer’s allowance benefit paid out in error over the past six years because of UK official failures
— Prem Sikka (@premnsikka) May 20, 2025
Innocent people chased for debt, face anxiety, hardship, prosecution threats.
A cliff edge approach to benefits needs to be abandoned.https://t.co/TKCz7ORavP
Adrian Waite, Lib Dem Councillor for Kirkby Stephen & Tebay, wrote on X,
“The @guardian reports on how unpaid carers have been forced into debt and criminalised by the failings of the DWP… The whole UK state is dysfunctional and needs radical reform. Carers need more support not less!”
The @guardian reports on how unpaid carers have been forced into debt and criminalised by the failings of the DWP at https://t.co/lPXqAqJDCE The whole UK state is dysfunctional and needs radical reform. Carers need more support not less! @CarersUK @CarersTrust @DWPgovuk @libdems…
— AWLibDem (@aw_dem) May 26, 2025
Sir Stephen Timms, Labour MP for East Ham, posted on X,
“DWP published terms of reference for the independent Carer’s Allowance Review. It builds on the action we’ve taken to boost the earnings threshold. An estimated 60,000 additional carers will become eligible for the benefit.”
Yesterday, DWP published terms of reference for the independent Carer's Allowance Review.
— Sir Stephen Timms (@stephenctimms) December 10, 2024
It builds on the action we’ve taken to boost the earnings threshold. An estimated 60,000 additional carers will become eligible for the benefit.https://t.co/CufS48nLGc
How thousands of carers are being hit by overpayment penalties?
More than 144,000 carers now face repayments of over £251 million in carer’s allowance, with amounts ranging from £2,000 to £5,000, and in some cases as high as £20,000. These harsh penalties are imposed when part-time carers exceed the earnings limits linked to the £82.30-a-week benefit.
Under the “cliff edge” rule, carers must repay the full benefit if they exceed the earnings limit by even a small amount. If a carer exceeded the £196 weekly limit by just 50p for 52 weeks, the repayment would rise to £4,258.80.
The impact has been intensified by years of the DWP failing to investigate electronic alerts warning of potential earnings-limit violations. This has led to carers unintentionally accumulating overpayments over an extended period.
Key facts about the Fraud and Error Bill
The Fraud and Error Bill aims to stop £9.5 billion lost to benefits being paid to the wrong people by mistake or fraud.
The bill allows the government to ask banks to check if benefit claimants have too much money in their savings to qualify for payments. The government states this will not give DWP access to see how claimants spend their money or their transaction history.