UK benefits paid using a computer system from 1997

Carer’s Allowance runs on a computer system that went live in 1997. The Centre for Social Justice (CSJ) made the finding in State of Dependency, the first report from its Welfare 2030 inquiry into the Department for Work and Pensions (DWP).

The live Carer’s Allowance caseload sits on the Carer’s Allowance Computer System (CACS). The DWP updated the system’s underlying code in 2015, but its design and functionality have stayed the same since launch.

The 2025 Sayce Review found CACS at the end of its life and incapable of significant change, the CSJ said.

CACS does not hold all the information a caseworker needs to decide whether someone qualifies for the benefit. Staff must also check Searchlight, a separate customer-information system, and other DWP systems that CACS cannot connect to, then move the information across by hand.

A carer’s weekly earnings decide their entitlement, but HMRC holds that data in its Real Time Information (RTI) system. The figures reach the DWP through the Verify Earnings and Pension Service (VEPS), which sits outside routine claim processing.

VEPS only raises an alert about a carer’s earnings when a member of staff has manually switched on monitoring for that individual claim. Even when it flags that someone may have earned too much, it cannot correct the claim and can only pass the case to a caseworker.

The CSJ linked this setup to the large debts that carers built up without knowing they had breached the earnings limit. The DWP sought to recover the money in full and pursued prosecution in some cases, which had become a public scandal by mid-2024.

A patchwork of ageing systems

The DWP pays around £309.5 billion a year to 23 million people through a patchwork of separate computer systems. Many of these systems are decades old and cannot communicate with one another.

As of 31 March 2026, the department rated its reliance on legacy technology as a “high” risk, citing the scale and complexity of legacy systems across critical services.

The DWP’s Service Modernisation Programme aims to cut the risks from its outdated IT by 58% by March 2028, measured against a mid-2025 baseline. The department reported a reduction of around 14% in the first year, against a target of 5%.

The programme has already moved parts of the state pension, child maintenance, Attendance Allowance and Maternity Allowance onto digital systems. The DWP projects a net return of around £1 billion over the life of the programme.

The National Audit Office concluded that the programme carried real delivery risk and that the DWP was unlikely to make the improvements it needed in the short term. The Public Accounts Committee said major government digital transformation programmes have often failed to deliver as intended.

Universal Credit faces its own problem where two departments’ systems meet. The DWP calculates monthly awards automatically from earnings that employers report through HMRC’s RTI system.

When two salary payments land in a single monthly assessment period, the system can read this as a jump in income and cut the award. Following a successful legal challenge, the DWP can now move one of the two payments into a different assessment period.

That fix only covers claimants paid on a calendar-monthly basis. Claimants paid weekly, fortnightly or four-weekly remain exposed to the same cut.

Now read: Old government IT is costing UK taxpayers billions