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Ministers are pocketing more than £250m from unpaid carers over benefits breaches which have largely come about as a result of government failures, it can be revealed.
More than 134,000 carers are often forced to pay huge carers’ allowance overpayments. The debts are in many cases no fault of their own and leave caregivers saddled with huge debts and some with criminal convictions.
The Department for Work and Pensions (DWP) promised five years ago to fix problems which meant carers were not alerted immediately when they earned more than the £151-a-week limit that made them eligible for Carer’s Allowance.
However, a number of ministers have failed to tackle the problem, leaving tens of thousands of unpaid carers – who saving the UK £160 billion a year and help keep the NHS and social care services – in financial trouble – while they pay off the debt.
Ministers were made aware of the negative financial and emotional impact of overpayment on carers through a Research commissioned by the DWP completed in 2021, but hers the post was blocked for three years until he was finally released on Thursday after pressure from MPs and activists.
The Guardian revealed how more than 134,000 unpaid carers pay these huge penalties, in some cases as high as £20,000, as a result of the DWP’s failings. There are 156,000 outstanding carers’ allowance debts, suggesting some carers are paying more than one overpayment.
Stephen Timms, the chairman of the House of 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 amount recovered was £251 million.
He told the Guardian: “This is a staggering amount of money which the DWP should never have paid out in the first place.
“These overpayments cause a lot of suffering for carers, but there is also a financial fairness issue here. This is a very good reason for the National Audit Office (NAA) to take another look at Carer’s Allowance overpayments.”
Commons cross-party 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 correct overpayments”.
Official figures show that around 70% of carers’ 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 up for years despite the DWP’s promise in 2019 to notify unpaid carers immediately when they exceed the income threshold.
Emily Holzhausen, Director of Policy and Public Affairs at Carers UK, said it was “breathtakingly devastating” to see the scale of money being taken from often low-paid and exhausted unpaid carers, almost always through no fault of their own.
“The impact on carers is horrendous, with carers’ mental health taking a serious hit and some saying they have hit rock bottom,” she said.
Holtzhausen said the debts left unpaid carers struggling with shame, making them “already a challenge [role] even more difficult”. She added: “To some it may just seem like a number. For us, this is a negatively impacted life for hundreds of thousands of caregivers.”
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.
Overpayment occurs when a carer breaks a government-imposed limit which states they cannot earn more than £151 a week in paid work while receiving the £81.90 allowance. Instead of asking carers to repay the amount that exceeded the threshold, the DWP refunded the full £81.90 for each week that was in breach.
This means that a carer who earned £1 more than the £151 threshold over 52 weeks would normally have to pay back £4,258.80 instead of £52.
The latest official figures show dozens of these carers are paying out more than £20,000 each, while 11,600 are paying out sums of more than £5,000.
A DWP spokesman said: “The total amount of carers allowance overpayments includes historical debts which the department is seeking to recover. In comparison, the cost of Carer’s Allowance is forecast to be £4.2bn this year alone.
“We are also developing an improved notification strategy as part of our ongoing commitment to customer engagement, which will help ensure customers meet their obligations to inform the DWP when their circumstances change, building on existing communications.”
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