A woman providing full-time unpaid care for her elderly disabled mother says her job has been put in jeopardy because welfare officials wrongly pursued her employer for a nonexistent “benefit debt” quashed by the courts nearly four years ago.

The 44-year-old woman said she was staggered when the Department for Work and Pensions (DWP) wrote to her employer out of the blue earlier this month demanding they deduct the universal credit overpayment “debt” from her salary.

When the woman, known as Ms C, contacted the DWP to remind it that the overpayment had been dismissed by a judge in 2022, officials said they had no record of the tribunal decision – and asked her to send a copy of it to them in the post.

She said the DWP’s failure to stop the enforcement order, despite repeated pleas over the past fortnight, meant she had been forced to ask her employers not to pay her wages at the end of this month to prevent the “debt” being wrongly paid.

Ms C who works in the financial services industry, and has not claimed benefits for five years, told the Guardian the DWP’s chaotic and “institutionally careless” handling of her case made her feel “punished for caring”.

She said: “As a carer, you are already holding together someone else’s life, health, safety, paperwork and dignity. When the department that is supposed to support vulnerable people instead creates errors, loses outcomes, blocks practical routes to submit evidence and pushes enforcement on to your employer, it is frightening and exhausting.

“It also makes you feel invisible. The DWP treated this as if it were a small administrative debt. For me, it was not just £163.73. It was my job, my professional reputation, my ability to care for my mother, and my confidence that public bodies can keep accurate records about vulnerable households.

“This is not about the money. Its about how easily a legal decision can disappear inside a system that still has the power to contact your employer, damage your reputation and continue enforcement anyway,” she added.

An independent government-commissioned review of carer benefit overpayments published last year said the outdated computer systems, flawed internal communication between departments, and poor access to historical records “all hamper effective administration” at the DWP.

Ms C, who is employed by a financial services firm as an auditor, works from her home, where she also cares for her mother, who is bedbound and has complex mental and physical issues. She has been a carer for her mother since the age of 13.

She said the DWP demand, known as a direct earnings attachment notice, would automatically trigger financial conduct compliance checks, potentially creating reputational and professional issues.

The DWP made its original overpayment demand in 2021 after insisting she was paid a carer premium on top of her monthly universal credit payment, even though she informed them several times, by phone and journal, that she did not want to receive it. Several weeks later the DWP removed it and apologised.

Although the DWP admitted the overpayment was created by an error on its part, and Ms C was entitled to it, it said it had a legal duty to recover the money. Ms C appealed, and the demand was overturned by a first-tier tribunal in September 2022.

The tribunal judge’s written ruling threw out the DWP’s claim, and said Ms C had not been overpaid. “The tribunal found that [Ms C] had been paid what she was entitled to and nothing more,” it said.

Ms C said she had refused carer payments when she claimed universal credit in 2021, despite being entitled to them, because of a negative previous experience with carer’s allowance where she had fallen foul of that benefit’s notorious earnings rules.

The DWP was approached for comment