Ministers clawing back £251m from carers hit by DWP’s allowance failures

ministers clawing back £251m from carers hit by dwp’s allowance failures

More than 134,000 people who care for loved ones are being forced to repay often huge sums. Photograph: Westend61 GmbH/Alamy

Ministers are clawing back more than £250m from unpaid carers over benefit infringements that occurred largely as a result of government failures, it can be revealed.

More than 134,000 people who care for loved ones are being forced to repay often huge carer’s allowance overpayments. The debts are incurred in many cases through no fault of their own, and leave carers saddled with enormous debts, and some with criminal convictions.

The Department for Work and Pensions (DWP) promised five years ago to fix the problems that mean carers are not immediately alerted when they earn more than the £151-a-week limit that renders them eligible for carer’s allowance.

However, a successions of ministers have failed to fix the problem, leaving tens of thousands of unpaid carers – who save the UK £160bn a year and help prop up NHS and social care services – in financial hardship while they repay the debt.

Ministers were made aware of the negative financial and emotional impact of overpayments on carers through a DWP-commissioned study completed in 2021, but its publication was blocked for three years until it was finally released on Thursday after pressure from MPs and campaigners.

The Guardian has revealed how more than 134,000 unpaid carers are repaying these huge penalties, in some cases as high as £20,000, as a result of the DWP’s failures. There are 156,000 outstanding carer’s allowance debts, suggesting some carers are paying back more than one overpayment.

Callout

Stephen Timms, the chair of the Commons work and pensions committee, on Saturday renewed his call for the government’s spending watchdog to investigate the scandal after ministers revealed the total sum being recouped was £251m.

He told the Guardian: “That’s a strikingly large sum of money that DWP should never have paid out in the first place.

“These overpayments are causing a lot of distress for carers but there is also a financial propriety issue here. It’s a very good reason for the National Audit Office (NAO) to have another look at carer’s allowance overpayments.”

The cross-party Commons work and pensions committee last week wrote to the NAO urging it to investigate the DWP “given the scale of the problem, the lack of progress made since 2019 and the cost to the taxpayer of a system that fails to prevent or rectify overpayments”.

Official figures show about 70% of carer’s allowance overpayments occur when someone earns more than the £151-a-week limit – the equivalent of 13 hours a week on the “national living wage” – while caring for a loved one.

In many cases these overpayments have been allowed to build for years despite the DWP’s promise in 2019 to immediately notify unpaid carers when they exceeded the earnings threshold.

Emily Holzhausen, the director of policy and public affairs at Carers UK, said it was “breathtakingly devastating” to see the scale of the money being taken from often low-paid and exhausted unpaid carers, almost always through no fault of their own.

“The impact on carers is appalling, with carers’ mental health taking a real knock and some saying that they’ve got to rock bottom,” she said.

Holzhausen said the debts had left unpaid carers struggling with shame that made their “already challenging [role] even more difficult”. She added: “To some this might feel like just a number. To us, that is hundreds of thousands of carers’ lives being negatively affected.”

Mel Stride, the work and pensions secretary, will be questioned about the growing scandal next week when he appears before MPs on the work and pensions committee.

Overpayments happen when a carer breaches a government-imposed cap that states they cannot earn more than £151 a week in a paid job while receiving the £81.90 allowance. Instead of asking carers to pay back the amount that exceeded the threshold, the DWP claws back the whole £81.90 for each week that was in breach.

This means a carer who earned £1 more than the £151 threshold for 52 weeks would typically have to pay back £4,258.80, rather than £52.

The latest official figures show dozens of these carers are paying back more than £20,000 each, while 11,600 are paying back sums greater than £5,000.

A DWP spokesperson said: “The total amount of carer’s allowance overpayments includes historical debts which the department is seeking to recover. In comparison, carer’s allowance expenditure is forecast to be £4.2bn this year alone.

“We are also progressing an enhanced notification strategy as part of our ongoing commitment to customer engagement, which will help ensure customers fulfil their obligations to inform DWP when changes in their circumstances have occurred, building on existing communications.”

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