Carer’s Allowance overpayments drive half of families with disabled children to stop claiming

4 mins read

Tuesday 3 June 2025

Tags: Carer's Allowance repayments, Benefits and financial support, carer's allowance

Contact’s research has found that half of families with a disabled child who have had to pay back Carer’s Allowance have stopped claiming the benefit as a result. This is despite it being a vital source of income for carers under enormous physical, emotional and financial pressures.

We also found that:

  • A quarter of families with disabled children hit with Carer’s Allowance overpayment had contacted the Carer’s Allowance unit about changes in their wages, but the information wasn’t updated in time.
  • Nearly half (47%) had trouble getting through to the Carer’s Allowance unit. 9% were not able to reach them at all.
  • 93% told us having to repay Carer’s Allowance made them stressed, anxious and unwell. 34% said they went without essentials. 33% had to give up work or reduce their hours, and 48% increased other debts.

Our Counting the Costs research, carried out last year, found that 11% of families with disabled children have been overpaid Carer’s Allowance by the Department of Work and Pensions (DWP) in the last year. Of those: 73% said it was because of their earnings. On average parents had to repay £1,045.

The Carer’s Allowance earnings limit is now £196 per week. That’s the equivalent of 16 hours a week at the National Living Wage. But families whose earnings sometimes go even slightly over £196 are still likely to get caught out in a fundamentally unfair system.

A rigid, stressful system

Alex left her career as a police officer to care for her two adopted children, who both have additional needs.

When the children were old enough, Alex got a job at a supermarket. She informed the Carer’s Allowance unit about her change in circumstances and what hours she planned to work. She worked 20 hours for three months and her Carer’s Allowance was still paid, so she thought it was ok to continue. Then she received a letter to say that she owed almost £1,000.

Alex told us: “You need a financial adviser to work out how much you can work or work a lot less than the threshold to be safe. The system is so rigid, and it’s really stressful as it’s always at the back of your mind. I don’t expect to get money I’m not entitled to. But there should be some way of tapering off, so if you go over the earnings limit by a few pence, the whole amount of Carer’s Allowance isn’t taken away. That would actually make work pay.

“I did a shift the other day and should have finished at 10. I didn’t finish till 10.30, and I was worrying about going over the earnings limit. If someone phones in sick, I’d like to say I can help out, but I can’t. In the run up to Christmas there are extra hours and night shifts available, but I can’t take them.

“I’d like to do 15 hours but have had to restrict myself to 10 hours. It’s just gone up to 12 hours because of the increase in the earnings limit that has just come in. There’s no flexibility in the system, and it makes it much harder for those who want to work.”

A long running issue for working parent carers

Anna Bird, Chief Executive of Contact, said:

“Together with a group of charities, we are calling for the halt of new overpayments debt until the government’s independent review of the issue concluded and recommendations implemented. We are very concerned that significant numbers of families with disabled children are being put off claiming a vital source of financial help due to the stress of being overpaid.

“The system is difficult enough to navigate. If a working parent carer juggling very stressful circumstances is trying to pass on information to the Carer’s Allowance unit and that is not being acted on quick enough, it is shocking that the carer is then penalised.

“The Carer’s Allowance earnings limit is a long-running issue for working parent carers. Our helpline regularly hears from families with disabled children who, despite the increase in the earnings limit, are still likely to be affected by overpayments without reform of the flawed system.”

The Department for Work and Pensions (DWP) has said it is exploring a system of targeted texts and emails to alert claimants to potential overpayments.

Need advice about Carer’s Allowance?

Read more information and advice about Carer’s Allowance.