Campaigners are calling for a complete overhaul of Carer’s Allowance after the publication of research this week showed that the current overpayment system left some carers in financial difficulty and debt.
In a petition to government, the campaigners want a full review and reform of Carer’s Allowance to ensure that it works well at supporting unpaid carers, including raising the level and eligibility criteria for the benefit.
They are also asking for the system to be modernised and urgent action from Department for Work and Pensions (DWP) to cap and prevent large overpayment debts for carers.
It said: “Thousands of carers are incurring substantial debt as a result of Carer’s Allowance overpayments, sometimes due to going over the earnings limit by as little as £1. Overpayments that result from an honest mistake can lead to debts that run up into £1000s.”
Carer’s Allowance is currently paid at a a rate of £81.90 per week and people are eligible if they spend at least 35 hours a week caring for someone with an illness or disability. It also has a strict earnings limit of £151 per week (after deductions including tax, national insurance and certain expenses).
If you go even £1 over the earnings limit carers stand to lose 100% of their Carer’s Allowance and in many cases these overpayments have been allowed to build for years. Reports this week say that the government is seeking to recover more than £250 million from more than 134,000 carers who went over the earnings limit.
In the research, Experiences of Claiming and receiving Carer’s Allowance, which was completed in 2021 but only released this week, claimants said that the earnings limit was too restrictive. They suggested that the income threshold should be tiered or tapered so that they would not lose all of Carer’s Allowance if they went over the threshold.
In addition, when the overpayment was initially raised, several claimants felt that they were spoken to or treated by DWP as though they had intentionally committed fraud when the overpayment had been a misunderstanding.
The research also found that most claimants felt Carer’s Allowance was not proportionate to the amount of caring they were doing. Claimants felt their caring was a ‘full-time job’ and that the time they spent caring was therefore being undervalued. There was also a widespread view that Carer’s Allowance claimants were saving the government money by caring themselves.
A recent survey by Carers UK found that over a third of carers (34%) had cut back on essentials like food or heating, whilst 45% of those receiving Carer’s Allowance were struggling to make ends meet.
Helen Walker, Chief Executive at Carers UK added: “We are really pleased to see the Department of Work and Pensions’ research on Carer’s Allowance finally in the public domain so we can begin to have constructive discussions with decision-makers and officials about the future of Carer’s Allowance. However, it has taken three years for this research to be published and during this time the benefit has remained unchanged, despite many calls from Carers UK and other stakeholders on the need for a substantial review.
“Carer’s Allowance is the lowest benefit of its kind at just £81.90 per week, this is clearly evidenced in the research, which highlights that the majority of claimants live in low-income households. The lower level of qualifications of the claimants further highlights the need to change the eligibility criteria for Carer’s Allowance to enable unpaid carers to gain qualifications whilst providing vital care, which could build their confidence and prepare them for paid work if their caring role comes to an end.”
A letter from the Work and Pensions Select Committee to the Secretary of State was also published on the same day as the research, which made clear that significant changes are required to the design of Carer’s Allowance to ensure it works well at supporting unpaid carers in a variety of situations.
The Committee highlighted how overpayments remain a significant issue for carers, with concerns about the mental distress experienced by those who realise they have been overpaid and the DWP taking several years to recover high value overpayments.
It now wants the National Audit Office to complete a full investigation of the matter and has asked for a Ministerial response by 17 June 2024.
Rt Hon Sir Stephen Timms MP, Chair of the Work and Pensions Committee, said: “The Government has known for years about flaws that have plagued the payments system for Carer’s Allowance but has just allowed many unpaid carers to unwittingly rack up unmanageable levels of debt. The DWP must now move without delay to get a grip of the problem and ensure carers are no longer subjected to the distress that such overpayments can cause.
“On top of the problems with overpayments, we have heard how the rate of Carer’s Allowance leaves many struggling to make ends meet. The Government should make sure that carers who carry out their tasks without reward are made to feel valued by ensuring that the payment properly reflects living costs.”
Five years ago, the Select Committee and the National Audit Office found that the Department didn’t have any research knowledge about how Carer’s Allowance claimants were affected, who was juggling work and care and broader characteristics of Carer’s Allowance claimants. The Government responded to the Select Committee by saying that it would carry out research. Although delivered in 2021, it did not publish the work despite repeated calls by Carers UK and the Select Committee to do so.
Carers UK says that measures put in place nearly five years ago to tackle overpayments have not delivered any material change to the number of carers experiencing overpayments. The HMRC sends regular alerts to the DWP about carers who have earnings over the threshold, but they are not always acted on swiftly enough, leaving carers to clock up overpayments. As a result, there were 34,500 in the last year alone, or one in five unpaid carers with earnings.
The petition to Government can be signed here.
