The Government has promised a plan to “put things right” on overpayments to carers which have led to many unwittingly racking up unmanageable levels of debt and some quitting their jobs as a result.

The issue of people being penalised for going over their earnings limit for Carer’s Allowance even by as little as a few pence per week has been branded a “scandal” by a charity.

Carers UK said some people have been left owing “hundreds, thousands and sometimes tens of thousands of pounds” to the Department for Work and Pensions.

The organisation said “many carers” had told them they felt they had to leave their employment as a result of receiving an overpayment and “many more” had reduced their hours and turned down pay rises amid fears of breaching the earnings limit.

The charity has called for “concrete changes” to the system, including a rise in the earnings limit for the allowance, for debts to be written off in certain cases, and for clearer information and communication with carers.

A Government report written in 2021 but only published in May this year suggested 3% of their sample of claimants had received an overpayment of carer’s allowance.

With about 1.3 million people receiving carer’s allowance, the Carers Trust charity said this could equate to tens of thousands of people having been overpaid.

Then-work and pensions committee chairman Sir Stephen Timms said the issue had caused people “distress” and the report called on the Government of the time to “get a grip of the problem”.

On Monday, Carers UK said it was meeting with Sir Stephen to present its report into the devastating impacts of the issue.

The report stated: “Action is urgently required to prevent carers from experiencing the financial hardship and ill-health that repaying overpayments can cause. It is the length of time and therefore the large size of the overpayments that make the debts particularly difficult to repay.

“Carers UK has been campaigning for changes to be made to Carer’s Allowance since 2018 and was part of the original work with the Select Committee and the NAO. We have repeatedly raised overpayments with the DWP.”

The weekly rate of Carer’s Allowance is £81.90 and the earnings limit is £151 per week in 2024/25.

According to the Carers UK report, as of mid-May 2024 there were 134,800 people with an outstanding Carer’s Allowance debt – a total value of £251 million.

There were 34,500 overpayments as a result of carers breaching the earnings limit in 2023/24, and seven in 10 (70%) of all overpayments were due to the earnings limit.

Ahead of the meeting, Sir Stephen, who is now a Government minister for social security and disability, said: “Our country would grind to a halt without the millions of carers who provide care and continuity of support for vulnerable people every day.

“We recognise the challenges they are facing and we are determined to provide unpaid carers with the support they deserve.

“Meeting organisations like Carers UK and individual carers and hearing their views and experiences is key to helping us to establish the facts and make informed decisions.

“With respect to overpayments of Carer’s Allowance, we are moving quickly to understand exactly what has gone wrong so we can set out our plan to put things right.”

Carers UK chief executive Helen Walker said: “We’re pleased that Sir Stephen Timms is listening to carers and taking this opportunity to meet with us.

“We are providing widespread evidence of the devastating impact this is having on thousands of carers’ lives and feel encouraged that he has a good understanding of the key issues involved.

“Caring often limits your ability to earn a full income and adds to extra costs that you would not otherwise have.

“It’s a scandal that so many carers, who have unwittingly received overpayments, are facing additional stress and anxiety. Many are under huge pressure already and in precarious financial positions due to their caring role.

“It is heart-breaking to hear of instances where thousands of pounds of debts have been accumulated. This has been going on for years and not enough has been done by Government to fundamentally change the situation. It simply cannot continue.”