Ministers have announced a major review of the penalties imposed on hundreds of thousands of unpaid carers after a damning independent investigation of the carer’s allowance scandal.The inquiry by Liz Sayce was launched after the Guardian revealed how a catalogue of failures at the Department for Work and Pensions (DWP) had left scores of vulnerable families with huge debts and hundreds with criminal convictions for fraud.Those who care for loved ones for at least 35 hours a week are entitled to £83.30 a week in carer’s allowance, as long as their weekly earnings do not exceed £196.But if they exceed this limit, even by as little as 1p, they must repay that entire week’s carer’s allowance.

The draconian nature of the rules is compounded by the DWP’s failure to alert unpaid carers when they have overstepped the weekly earnings limit, even though the department has access to near real-time data.This has left hundreds of thousands of people unwittingly racking up huge debts – sometimes of more than £20,000 – which the DWP recoups often years after the breach occurred, threatening unpaid carers with criminal prosecution if they do not pay.After an 18-month Guardian investigation, here we trace the 10 years of bureaucratic failure, whistleblowing, political neglect and groundhog day-style policy inertia at the heart of this scandal.A DWP whistleblower writes to the then DWP permanent secretary, Sir Robert Devereux, complaining that the failure to manage carer’s allowance overpayments is landing vulnerable carers with huge, avoidable debts and wasting millions of pounds.An internal audit reveals weaknesses in the system.

A year later, the DWP closes down the whistleblower’s complaint.The National Audit Office (NAO) and MPs on the Commons work and pensions select committee publish devastating reports on the DWP’s handling of carer’s allowance, criticising it for its slowness to recognise and address overpayment problems, and for its heartless treatment of carers, pursuing them for huge debts caused in many cases by its own failures.At a select committee hearing, Peter Schofield, the DWP permanent secretary, is asked three times if he will apologise for the department’s failings.He avoids direct answers but insists the problem is now under control.The Tory MP Nigel Mills is sceptical: “We don’t want to get back here in three years’ time with another set of out-of-control overpayments on carer’s allowance.

” Schofield says officials will consider sending text warnings to carers who breach earnings limits.Above all, he promises new data-matching technology will stop overpayments “in some cases before they happen”.At the 2019 general election, many of the MPs who raised the alarm on carer’s allowance overpayments lose their seats.As Covid strikes, momentum for reform of carer’s allowance dissipates.Although Schofield had promised MPs the whistleblower, Enrico La Rocca, would be protected, he is sacked, only to be reinstated in 2021 after representations by the Labour MP Stephen Timms, the then work and pensions select commitee chair and now, since 2024, the welfare minister.

A Guardian investigation reveals that five years on, tens of thousands of carers are still being asked to repay huge sums, while others are being pursued through the courts for fraud.Far from stopping overpayments before they happen, by the end of April, 134,500 carers are repaying overpayments totalling £251m.As many as one in five carer’s allowance claimants run up overpayments.The DWP’s initial response to public outrage at the scandal is to suggest sending overpayment text warnings to carers.The NAO announces it will revisit its 2019 carer’s allowance investigation.

DWP ministers are back before select committee MPs with another set of out-of-control overpayments.In October, the new Labour government launches an independent review of how carer’s allowance overpayments were allowed to accrue on such an industrial scale.At the budget, it promises to fix the notorious earnings limit “cliff edge” penalties at the heart of the scandal and boosts the weekly amount carers are entitled to earn, from £151 a week to £196, the biggest jump since carer’s allowance was introduced in 1976.The welfare secretary, Liz Kendall, tells MPs at a select committee hearing that DWP culture needs to change in respect of its treatment of vulnerable claimants.“We need to learn from the problems and the mistakes that were made [with carer’s allowance] to make sure they don’t happen again,” she says.

Schofield, the senior official who told MPs in 2019 that the DWP would fix the problems, is sitting beside her.The Guardian reveals that at least £357m in carer’s allowance benefit was paid out in error over the past six years because of official failures, resulting in debt and misery being inflicted on tens of thousands of people.The journalists Patrick Butler and Josh Halliday win the coveted Paul Foot award for investigative journalism for their reporting on the scandal.Sayce’s independent review finds a catalogue of failure by the DWP in its handling of carer’s allowance.It finds that breaches of the rules were not “wilful rule-breaking” but honest mistakes made as a result of unclear guidance or administrative error by the government.

Ministers announce a review of hundreds of thousands of overpayment cases stretching back to 2015, meaning scores of people could be reimbursed and have criminal convictions overturned.The government has stopped short, however, of announcing compensation to those wrongly penalised.