The care industry will be plunged into "crisis" if the Government does not step in to fund a £400 million back payment bill, MPs have heard.
Ministers were warned that the decision of HMRC to pursue care providers for liabilities could result in a "rash of mini Carillions".
The warning comes after the Government ruled that care providers must pay at least the national minimum wage to staff who sleep over.
Labour MP Ian Mearns (pictured), speaking in the Commons, urged ministers to step in.
He said: "This is a crisis for social care providers and the people that need those services.
"This unexpected cost on providers is threatening the viability of the care sector, 69% of local authorities have reported service failure due to this.
The Gateshead MP added: "The Government must step in and fund this back pay in order to prevent the crisis spiralling out of control.
"If unfunded, the sector could produce a rash of mini Carillions.
"Vulnerable people will suffer, thousands of care workers will lose their jobs, local authorities and NHS Trusts will be unable to cope with the consequences, the social sector should not and cannot afford to fund this service."
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