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Benefits overpayments ‘causing carers stress and anxiety’

Earnings threshold ‘cliff edge’ penalises carers for minor mistakes

Carers who have been impacted by overpayments of Carer’s Allowance are experiencing stress and anxiety, a charity has warned.

If carers earn even £1 over the £123 a week threshold, they lose their entire week’s allowance of £66.15 or are considered to owe it back to the Department of Work and Pensions (DWP) as a debt. 

The Work and Pensions Committee said the DWP should be spotting errors because it has access to data about carers’ earnings from HMRC. However, problems with its systems, compounded by prolonged staff shortages, have led to substantial backlogs in the checking process.

Emily Holzhausen OBE, director of policy and public affairs at Carers UK, warned that carers are experiencing considerable stress and anxiety and are facing debt that could affect their incomes for years to come on top of demanding caring responsibilities.

“The department must urgently consider writing off overpayments where its administrative failures have allowed them to accrue. They should also assess the impact of their recovery of overpayments to ensure they don’t push people into further financial hardship,” she argued.

She said carers need a solution to the sharp cliff edge of the earnings threshold that currently means earning even £1 over the threshold sees a 100% loss of benefit.

“It is the DWP’s job to provide frequent and clear information about the earnings threshold and they must introduce a simpler way for carers to track and report their earnings,” she added.

It is estimated that there are around seven million carers in the UK (around one in eight adults) who make an unpaid contribution of £132bin to the UK economy every year.

Frank Field MP, chair of the Work and Pensions Committee, said many find it difficult to make ends meet.

According to Carers UK’s 2019 State of Caring report, 39% are in financial hardship and 73% of carers on Carer’s Allowance are unable to afford to save for retirement.

“With the number of carers at an all-time high, saving the Treasury billions of pounds annually, it is even more vital that the government provides carers with both the support and recognition they deserve,” Field argued. “Instead, administrative failures by DWP have led to substantial overpayments which the department is now clawing back as debt, leading unsurprisingly to substantial distress and hardship for carers.”