On 13 April 2026 the Department for Work and Pensions announced a reassessment of more than 200,000 Carer’s Allowance cases affected by past earnings rules. The department expects around 25,000 unpaid carers to have debts reduced, cancelled or refunded. Carers do not need to take any action at this stage; DWP will contact those it needs information from. (gov.uk)
The announcement implements the government’s response to the Independent Sayce Review of Carer’s Allowance overpayments. Ministers accepted 38 of the review’s 40 recommendations, acknowledged that averaging guidance between 2015 and summer 2025 did not reflect statute, and stated that a reassessment exercise would begin in 2026-now commenced. (gov.uk)
The core issue concerns how fluctuating earnings were treated for what is assessed as a weekly benefit. Prior operational guidance meant some carers working irregular hours were deemed to breach the earnings limit even though their income, if averaged appropriately, could remain within entitlement. DWP says guidance has been updated so averaging is properly considered and explained in decision letters. (gov.uk)
Financial risk was magnified by the ‘cliff edge’ design of Carer’s Allowance: going a small amount over the weekly limit removes entitlement for that week, quickly generating large overpayments. The Sayce Review records cases where minor pay spikes led to debts far exceeding the excess earnings. (assets.publishing.service.gov.uk)
The reassessment covers cases from April 2015 to September 2025 where overpayments arose because the approach to averaging irregular earnings did not match the law. Carers whose overpayments occurred for other reasons are not in scope. DWP indicates it already holds most of the required information and will issue refunds where money was repaid in error. (gov.uk)
Earnings thresholds have also shifted. The weekly limit rose to £196 in April 2025 and is £204 in 2026/27. HM Treasury policy papers confirm the limit is now linked to the equivalent of 16 hours at the National Living Wage, reducing the risk that routine pay upratings alone trigger overpayments. (assets.publishing.service.gov.uk)
The government’s November 2025 response notes that the review and response cover England and Wales, with DWP sharing findings with devolved governments. That geographic clarification sits alongside the UK‑wide public interest in the reforms. (gov.uk)
Charities have welcomed the move. Carers UK described the reassessment as an important step towards redress and tackling systemic failures; Carers Trust said undoing historic mistakes would have a significant impact on carers penalised through no fault of their own. (gov.uk)
DWP says it is exploring options to automate earnings calculations and to replace the current all‑or‑nothing rule with a taper to prevent future overpayments. Updated operational guidance on averaging is already in force and the department plans to publish further research during 2026. (gov.uk)
Policy Wire analysis: For advice agencies, payroll teams and local carer services, the immediate task is preparatory-retain payslips, RTI records and evidence of overtime or backpay so recalculations can be verified promptly when DWP makes contact. If past entitlement was removed solely because of short‑term earnings spikes, reassessment could reinstate eligible weeks and trigger refunds. Longer term, linking the threshold to the National Living Wage and examining a taper should reduce debt shocks, but clear employer‑carer communication on pay cycles and deductions will still matter. The 50‑year anniversary of Carer’s Allowance underlines the scale of change now being attempted. (assets.publishing.service.gov.uk)