A system and method for auxiliary clutch failure detection determines a difference between a first output power of a powered system when a clutch system is controlled to engage and drive a load at a first output of the load and a second output power of the powered system when the clutch system is controlled to drive the load at a larger, second output. A control signal indicative of clutch failure is generated responsive to the difference being less than a designated threshold. The control signal may be used to implement one or more remedial actions.