Tens of thousands of unpaid carers looking after disabled, frail or ill relatives are being forced to repay huge sums to the government and threatened with criminal prosecution after unwittingly breaching earnings rules by just a few pounds a week.
People who claim the £81.90-a-week carer’s allowance for looking after loved ones while working part-time are being forced by the Department for Work and Pensions (DWP) to pay back money that has been erroneously overpaid to them, in some cases running to more than £20,000, or risk going to prison.
The repayments, which mainly hit carers on low incomes, have been criticised as a draconian response to mostly minor earnings rules infringements caused by DWP oversights, and what MPs have called “honest mistakes” by claimants confused by an opaque and complex system.
MPs and charities have called for an urgent overhaul of the carer’s allowance, saying it was wrong that carers who devoted their lives to looking after loved ones, saving the UK billions of pounds and helping prop up the NHS and care system, were being treated like fraudsters for mostly inadvertent errors.
Ed Davey, the Liberal Democrat leader, said: “Most unpaid carers struggle financially, and for many it takes a toll on their mental and physical health too. The truth is, unpaid family carers underpin our entire care sector, and help to keep the NHS on its feet too. The government should value and support carers, not treat them like criminals.”
The carer’s allowance is paid to those who provide at least 35 hours of unpaid care a week, giving up large portions of their lives to look after, in most cases, disabled, sick or frail relatives.
Those in receipt of the benefit are allowed to have a second income from a job, but there are strict government limits on how much they can earn – currently £151 a week.
If a carer’s income rises above that level, through working a few extra hours, or even a pay rise, they forfeit the entire benefit, an “overpayment” that the DWP seeks to recover, often by any means possible.
The problem is compounded by the fact that the DWP has IT systems that flag when a carer’s income breaches the threshold, but fails in many cases to act on the information, allowing carers to rack up thousands of pounds’ worth of overpayments over months and years before, in some cases, pursuing them in the courts for benefit fraud.
The severity of the DWP’s approach was highlighted last week when it went to court to seize a £16,000 inheritance belonging to a former unpaid carer and part-time supermarket worker, Vivienne Groom, months after it successfully prosecuted her for benefit fraud relating to breaches of earnings rules.
Groom had agreed to repay in instalments £16,000 relating to earnings breaches incurred between 2014 and 2019. The DWP used proceeds-of-crime laws – normally used to seize cars, cash and properties owned by convicted major criminals – to take the bequest, which had been left to her by the mother she dedicated so much of her life to caring for.
In another case, shared with the Guardian, an unpaid carer with a part-time charity job who unknowingly breached the threshold by an average of £4.40 a week and £58 in total – a breach caused by the automatic uprating of the national minimum wage – was told to repay £1,715 in “overpayments”, including a £50 civil penalty.
In a third case, a mother and part-time bookkeeper who cared for her autistic child received a £5,200 demand. When she appealed and supplied detailed accounts to support her case, she said the DWP disallowed an expense claim for a work laptop, ensuring she breached earnings rules and was liable for a repayment penalty.
Despite ministers promising five years ago that data-matching technology would largely eliminate overpayments, official figures show they are still a big headache. In 2022-23, 26,700 carers were asked to repay sums relating to earnings breaches. More than 800 were repaying sums between £5,000 and £20,000, and 36 were repaying more than £20,000.
Stephen Timms, the Labour chair of the Commons work and pensions committee, which heavily criticised DWP failings after investigating carer’s allowance overpayments five years ago, said the continuing scale of the problem was deeply disappointing. “It should not be happening,” he said.
The 2019 inquiry by MPs concluded that the vast majority of earnings-related overpayments were down to “honest mistakes” by carers, while administrative failures by the DWP meant the errors were not picked up before they spiralled into huge overpayments. It said the design of the benefit “sets carers up for a fall” and urged ministers to do more to limit the risk to claimants.
The repayments build up rapidly because even if the weekly earnings limit is exceeded by as little as £1, claimants become automatically ineligible for the entire carer’s allowance. This results in a “cliff edge” repayment penalty unmatched in its severity in the benefits system.
Campaigners say the DWP’s failure to investigate thousands of potential earnings breaches identified by its own data-matching technology each month means infringements that could have been spotted and corrected within weeks are allowed to accumulate unchecked for months, and sometimes years.
Emily Holzhausen, the director of policy and public affairs at the charity Carers UK, said: “The whole DWP system surrounding the carer’s allowance earnings limit needs sorting out urgently, with the level of the earnings limit increased and processes modernised, digitised and reformed.”
The DWP insists claimants are at fault for failing to tell carer’s allowance unit officials their earnings have changed. A spokesperson for the department said: “We carefully balance our duty to the taxpayer to recover overpayments, and safeguards are in place to manage repayments fairly. Claimants have a responsibility to ensure they are entitled to benefits and to inform the DWP of any changes in their circumstances that could impact their award.”
There are 5 million unpaid carers in the UK, of whom nearly 1 million claim the carer’s allowance..
Many unpaid carers give up work or go part-time when they look after partners or relatives. An estimated 44% of people on carer’s allowance are in poverty. In most cases, repayments are deducted monthly from benefits or wages, meaning claimants can be paying off debts for years.
Charities say the impact on carers forced to repay huge sums is devastating. “The cases are heart-rending. They talk about being deeply shocked, very negative impacts on their mental health, and struggling financially whilst still continuing to provide significant amounts of care,” said Holzhausen.
