The problem of carer’s allowance being overpaid has again come to public attention.
Reports suggest that between 2019 and 2024 the number of carers who had been overpaid rose from 80,000 to nearly 135,000. The value of overpayments that the Department for Work and Pensions (DWP) is attempting to recover has increased from £150 million in 2019 to £251 million.
The predominant cause of overpayments of carer’s allowance – the only cash benefit exclusively for carers – appears to be difficulties around the reporting and updating of carers’ earnings from paid employment outside their informal carer role.
Community Living reported in January 2019 concerns about some carers being ordered to repay their carer’s allowance because of overpayments. It appears from the latest figures that the DWP is no closer to reducing these.
Government statistics show that in 2022-23, the majority of claimants who had been overpaid were told to pay back amounts of up to £5,000, although for some the overpayments total will be larger.
Carer’s allowance is not means tested, so general income and savings are not assessed. However, once earnings go over a threshold of £151 per week (after certain deductions), the allowance is removed completely.
Carer’s allowance is referred to as a cliff-edge benefit. Once earnings go over £151 per week, after certain deductions, it is removed completely
It is therefore often referred to as a cliff-edge benefit. This contrasts with how earnings are treated in universal credit, a means-tested benefit. Here the system is more responsive to changes in a claimant’s wages, taking increases and decreases into account, so awards can be adjusted accordingly.
This means people can take on more work knowing they will not necessarily lose all their universal credit. It is also helpful to those on zero-hours contracts.
The DWP’s data-matching technology notifies it of overpayments but it appears it often responds too slowly, so overpayments may build up before they are acknowledged and the claimant notified.
Compensation for lost earnings
Carer’s allowance is supposed to compensate carers who are limited in the hours they can work because of caring responsibilities.
However, the benefit is just £81.90 per week, lower than the weekly awards of employment and support allowance and jobseeker’s allowance of £90.50 per week. In Scotland, carer’s allowance claimants get an extra payment of £288.60 twice a year, the carer’s allowance supplement.
Those who claim carer’s allowance may also be able to get universal credit to top up their benefit and/or to help with housing costs. Carers with a disability may be entitled to employment and support allowance, with this being paid instead of the carer’s benefit.
The main qualifying conditions for carer’s allowance are that the carer must be:
- Aged 16 or over
- Looking after someone who gets a qualifying disability benefit: the daily living component of personal independence payment; the middle/higher rate of the care component of disability living allowance; or attendance allowance
- Caring for at least 35 hours a week
- Not earning over £151 a week after deductions for income tax, national insurance and half of their contributions towards an occupational or personal pension
- Not in full-time education.
- A Carer’s UK report, Carer’s Allowance and Overpayments,
has made recommendations on how to reduce the likelihood of overpayments, including: - Increase the earnings threshold to the value of 21 hours’ work a week on the national living wage
- Introduce a taper to earnings similar to that for other benefits to avoid the cliff-edge effect
- DWP staff to act much more quickly on information from carers and notify them quickly about potential overpayments
- Write off substantial overpayments if carers could have been notified sooner of them.
Any carers claiming carer’s allowance in doubt about their earnings and how these affect their award should contact the DWP’s carer’s allowance unit and, if possible, confirm any changes of earnings or other circumstances to the unit in writing.
