Over 250 unpaid carers face prosecution due to benefit overpayments
More than 250 carers in Britain are at risk of legal action for receiving overpayments from the Department for Work and Pensions (DWP).
Under the current rules, it’s the responsibility of carers receiving carer's allowance to report any changes in their earnings. But claimants say they aren’t always told when they’ve breached the rules. This means overpayments can build up over time, making legal action more likely.
What is carer’s allowance?
Carers who spend a lot of time looking after someone with an illness or disability may qualify for carer’s allowance. It helps cover some of the costs of looking after them.
Right now, carer’s allowance is £81.90 a week, one of the lowest benefit amounts. For many carers, this works out to just £2.34 an hour, which is very low for how much work they do.
Since April, the DWP has been reclaiming money from carers who received more carer’s allowance than they were entitled to. This includes more than 15,000 carers, 50 of whom need to repay at least £10,000.
Why have there been overpayments?
Most overpayments were made because of people going over the earnings limit, while others were mistakes by the DWP. Fewer than 500 cases were due to fraud.
Over two-thirds of overpayments (70%) happened when people went over the earnings limit because of:
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changing earnings, like zero-hours contracts, being self-employed or doing shift work
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working extra time, for example by covering for a colleague or working slightly over your shift
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getting a pay rise or minimum wage increase
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getting extra pay one month, such as holiday pay or a bonus
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employer mistakes
The ‘cliff-edge’ rule
A major issue for many carers is the ‘cliff-edge’ rule. If your income goes just £1 over the weekly limit, you can be forced to pay back the entire carer's allowance. This has affected about one in five claimants, causing a lot of financial stress.
Thousands at risk of debt
There’s a backlog of 29,000 cases that need to be checked for potential overpayment breaches.
The Carers Trust estimates that as many as 10,000 more carers could end up with big debts in the coming months.
Calls for change
The Carers Trust is calling on the government to write off these debts while the system is under review.
In her first budget, chancellor Rachel Reeves said the government will consider removing the ‘cliff-edge’ rule, but officials say that this could take time.
The government has also increased the earnings limit for carer's allowance, which might reduce the number of carers affected.
If you're a carer, this change could help you keep your allowance while earning extra income. About 60,000 more carers will be eligible for carer's allowance.
Claiming carer’s allowance
To get carer's allowance, you need to care for someone for at least 35 hours a week and they must be getting certain disability benefits. There are also strict earning limits. Right now, if you earn more than £151 a week (after tax and expenses), you lose the allowance.
With the new changes, from April, carers will be able to earn up to £196 a week without losing their allowance.
While the increase is a positive step, we think the government should do more.
Our director of external affairs, Sebrina McCullough, says:
"11% of the people we provide debt support to claim carer’s allowance, with 75% deemed vulnerable. 44% of these people are also affected by benefit overpayment debts, so we would have liked the government to go further and replace the ‘cliff-edge’ limit with a tapered approach to earnings limits."
Help and support for carers
If you look after someone, you might be eligible to claim certain benefits.
Check out our guide on financial support for carers or use our benefits calculator to find out what you can claim. You may also qualify for grants that you don’t have to repay.
We’re here for you
If you’ve been told to pay money back from an overpayment but can’t afford to, you’re not alone. Around 30% of the people we support have turned to us because they’re struggling to repay overpaid benefits.
We might be able to help you with free and impartial debt advice online or you can give us a call.
Gabrielle Pickard Whitehead
Gabrielle is an experienced journalist, who has been writing about personal finance and the economy for over 17 years. She specialises in social and economic equality, welfare and government policy, with a strong focus on helping readers stay informed about the most important issues affecting financial security.
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