Thousands of unpaid carers will have their cases reviewed after an official review found they were left with huge debts caused by system failures.
Former charity chief Liz Says found that confusing guidance on the carer's allowance provided to those providing 35 hours of unpaid care a week had left thousands of people with fines and surprise bills, sometimes running into thousands of pounds.
The Guardian found hundreds of carers who claimed Carer's Allowance had been found guilty of benefits fraud, while others claimed officials were targeting them for money.
Work and Pensions Secretary Pat McFadden said the government would “fix” any failures affecting carers.
“We inherited this mess from the previous government, but we listened to carers, commissioned an independent review and are now delivering value to those affected,” McFadden said.
“Rebuilding trust is not about warm words, but about action, accountability and making sure our support works for the people who need it most.”
The Sayce review found that between 2015 and the summer of 2025, official guidance on carers' benefits was “unclear” and “uncertain”, preventing many carers from reporting their income correctly.
Unpaid carers who look after loved ones for at least 35 hours a week can claim £83.30 per week in carer's allowance if their weekly earnings do not exceed £196.
But under the so-called income margin rule, anyone over this limit by just 1p must pay out that entire week's carer's benefit.
The Department for Work and Pensions (DWP) also imposes a £50 fine on anyone who fails to properly declare a change in their earnings.
The law allows income to be “averaged” over time, but Ms Says found that the “broad” rules lead to multiple interpretations by both the DWP and the courts.
As a result, carers who worked long hours or received variable pay often assumed that their income could be averaged out, but were fined by the DWP instead.
In her report, Ms Sayce said “this was not a deliberate breach of the rules – it was simply not clear what income fluctuations carers should report.”
The report said the DWP also largely failed to warn carers in time when they went over earnings limits, meaning that in some cases overpayments were allowed to accumulate “for months or years” before unsuspecting carers were hit with huge bills.
In a statement on Tuesday, the DWP said it would set out details in due course about how and when it will begin reassessing cases and potentially canceling or paying off debts.
Ms Sayce welcomed the announcements, saying the policy had a “major impact on the health, finances and wellbeing of carers' families”.
Lib Dem leader Sir Ed Davey said both Labor and the Tories should “apologise to the tens of thousands of carers who were treated so shamefully in the last Parliament”.
Sir Ed welcomed the announcement but warned that “many carers face many more months of persecution, with the changes still a year away from coming into force.”
Carers UK chief executive Helen Walker said the government was “righting a clear wrong” and “addressing this injustice head on”.
“We hope this can be the start of restoring carers' trust in the system and that it is a positive sign that the door is open for further change,” Ms Walker added.
