Ministers have announced a major crackdown on Carer’s Allowance overpayments, which could leave thousands facing new debt demands. The policy shift will see the Department for Work and Pensions (DWP) investigate 100% of earnings breach alerts for the benefit.
Carer’s Allowance, worth £83.30 a week, is paid to those who care for someone who receives certain disability benefits for at least 35 hours a week. To qualify, carers must not earn more than £196 per week after tax and other work-related expenses. Exceeding this earnings threshold – even by pennies – can mean the entire week’s benefit must be repaid. The Guardian previously revealed that the DWP investigated only half of earnings breach alerts, prompting critics to call the system a “lottery” – with some carers flagged within weeks, while others unknowingly accumulate years of overpayments before being hit with sudden repayment demands worth thousands.
To fix this, the DWP said it will hire additional staff to investigate every alert and promptly notify carers at risk of owing money. However, some argue the move may trigger a wave of new backdated debt payments.
Helen Walker, chief executive at Carers UK, said: “Whilst we are pleased to hear that the current Government is aiming to tackle 100% of overpayments alerts, we’re disappointed to hear that they will not halt the creation of new overpayment debts until the review has concluded, which would have brought positive life-changing consequences for carers and their families.
“We have been calling for early notification of earnings threshold breaches for a long time to avoid devastating cases where overpayments have built up into large sums.”
Ms Walker added: “Currently, carers can lose a year’s Carer’s Allowance (£4,258.80) for exceeding the earnings threshold by as little as £52 annually (£1 a week).
“Carers make an invaluable contribution, and the Government could be doing more to reduce the hardship they are facing because of a fundamentally unfair system.”
A DWP spokesperson confirmed the department is bringing in additional staff to help clear the backlog of Carer’s Allowance overpayment and underpayment cases.
They said: “We will agree affordable repayment plans and, when issuing debt management notifications, signpost to independent advice services.”
How to avoid the risk of an overpayment
To avoid the risk of an overpayment, Carer’s Allowance claimants must report changes in their circumstances to the DWP. The changes can include:
- Starting a job
- Starting or ending full-time education
- Changes to your income
- Stopping being a carer
- The person you care for no longer getting their disability benefit
- Someone else who cares for the same person claiming Carer’s Allowance instead of you
- Someone else who cares for the same person claims the carer’s element of Universal Credit
- Changes to your immigration status, if you’re not a British citizen.
People can still get Carer’s Allowance if they temporarily stop providing care. This means any period when they spend less than 35 hours a week caring for the other person. The person they care for must still receive their disability benefit.
However, people must inform the DWP about this. Additionally, they must tell the DWP if they or the person they care for will be in hospital, a nursing home, or respite care for more than 12 weeks. The DWP must also be informed if the claimant stops care for more than 28 days for any other reason.