The Department for Work & Pensions (DWP) paid £3.7bn to over 900,000 claimants in 2023-24 and recovered £47m in Carer's Allowance debt.
Overpayment cases each year ranged from 32,500 to 60,800 with the Government issuing 30,129 civil penalties in 2023-24.
A carer must earn no more than £151 a week and provide at least 35 hours of care a week to someone who receives a qualifying benefit to claim.
The number of people with outstanding overpayment debt increased every year from 2018-19 to 2023-24 – rising from 80,169 to 136,730, an increase of 71%.
However, the average value of new Carer's Allowance overpayments identified by DWP fell in each of the past four years, dropping from £1,471 in 2019-20 to £988 in 2023-24, suggesting that overpayments are being identified earlier, the NAO said.
In October 2024, DWP announced a review into Carer's Allowance overpayments to cover how and why overpayments were accrued, operational changes to minimise future overpayment risk and how DWP can best support those with overpayments.
The scope of the review was announced by the DWP yesterday.
Liberal Democrat leader Ed Davey said: ‘It is appalling that so many family carers have been caught up in this scandal of the DWP's own making. This has caused misery and distress on a staggering scale.
‘I'm glad that campaigners were able to secure a review into this scandal, but it cannot be right to keep pursuing tens of thousands of carers for repayments while that review does its work.
‘This scandal has already dragged on for years under the last Conservative Government, so ministers should immediately halt repayment demands and threats of prosecution until the review has completed and the system has been reformed."
Minister for social security and disability, Sir Stephen Timms, said: ‘This report sets out the scale of the challenge and underlines the importance of our independent review into overpayments so we can make the system fairer for thousands of selfless carers.
‘Carers deserve to be supported which is why we are boosting the earnings threshold, benefitting more than 60,000 people, while our review will get to the bottom of the problem so we can protect carers from unfair debt and protect taxpayers' cash.'
