In Plymouth last year, 1,788 carers failed to claim benefits totalling £5,554,360, according to the new study.
The £59.75 allowance is regarded by many as a pittance, breaking down to a measly £1.71 per hour for what can be a lonely and demanding full-time job.
Derek Symons, 36, from the city, says some people regard those who profess to be caring for relatives as "blaggers" who are playing the system.
But the new figures show that these 6.5 million low-paid care workers actually save the country a staggering £119 billion each year – an average £18,473 for each one.
Derek was 'on the spanner" as an auto engineer and car dealer since the age of 15 until his wife was hit by serious arthritis four years ago.
Now he juggles working as a full-time carer for Johanne, 34, a former retail manager at the Co-op who now needs a wheelchair much of the time, with shopping, laundry, looking after two daughters and three cats.
Having had a daughter with cerebral palsy and two parents who were blind, he says he has been "around disability all his life" but his partner's illness still turned their lives upside down.
"We were comfortable, able to have a take-away when we wanted, take the kids to McDonalds," he said.
"I had to stop working and we ended up with £3,000 worth of debt with gas and electricity and are still struggling with water rates with a couple of grand on that.
"We are just seeing the light at the end of the tunnel and that's four years down the line – it is like hitting a brick wall and a lot of people really struggle – the Carers Allowance is a pittance really.
"We really struggled to find out information at the beginning, searching Government websites but not everyone is able to go online."
Derek says he now gets up at 6am "when its quiet" to do the washing and cleaning before helping get his two daughters off to school and university.
After that he gives his wife a shower, massages her and tries to keep her spirits up, takes care of the cats, does the gardening while trying to do a little part time work himself.
"It's a bit like Groundhog Day – every day is maybe different but I have lived with disability all my life and am used to being in this position," he added.
"The main thing is to keep people happy – I need two new knees myself but I don't know when I will be able to do it and I can't afford to be ill – if I am sick the ship goes down."