In a nutshell - if you get Carer's Allowance, you are supposed to only claim it if you earn below a certain amount. If you go over that amount, you can't claim it.
If you go over that amount and don't tell the DWP, you have to pay it back. But say you went over by 30 p. you would have to pay back not 30p but ALL of it.
The DWP know if you have earnt over the amount. But they don't tell you. They let it build up. And then prosecute you.
‘They’re heartless’: how one woman fell victim to the carer’s allowance trap | Carers | The Guardian
"On weekends when her daughter stays with her father, Moon worked part-time at Tesco earning £9.50 an hour. This would comfortably keep her under the earnings threshold of £127 a week at the time, especially when deducting allowances for fuel and pension payments – or so she thought.
The Department for Work and Pensions (DWP) contacted Moon in 2019 to say she had breached the earnings limit and would need to pay back every penny – or she would be taken to court.
Moon, terrified, contacted Citizens Advice for help. It analysed her payslips going back to July 2016, when she started work at Tesco, and found that – even on the strictest understanding of the DWP’s rules – she had exceeded the earnings limit by about £3 most of those weeks. Some weeks it was as little as 50p over.
She appealed for clemency but the DWP refused to budge. It refused her offer to pay back the amount she was not entitled to – about £800 over the course of three and a half years.
Instead, she would have to pay back every penny of carer’s allowance over that period – known as the DWP’s “cliff edge”. It amounted to £11,292.75 – plus an additional £50 civil penalty."
And the DWP response:
“Claimants have a responsibility to inform DWP of any changes in their circumstances that could impact their award, and it is right that we recover taxpayers’ money when this has not occurred.”