London (Parliament Politics Magazine) – The National Audit Office (NAO) reveals Carer’s Allowance overpayment debt has reached £250m, with carers caught in a flawed system. Campaigners urge the government to protect carers from financial hardship.
An official audit report has revealed that unpaid carers have faced penalties for minor breaches under Carer’s Allowance, exposing the government’s failure to fix the flawed system.
The NAO figures state that Carer’s Allowance overpayment debt has risen by £100 million since 2018/19.
Campaigners have criticized the DWP, arguing that the NAO report exposes the DWP’s shortcomings in addressing overpayments, leaving carers in hardship.
The government has already started reviewing Carer’s Allowance overpayments since October, with findings expected to be delivered to ministers by next summer.
BBC reported that the latest report published by NAO on Wednesday, covering England, Wales, and Scotland, claims that the Department for Work and Pensions allocated £3.7bn in Carer’s Allowance to more than 900,000 recipients in 2023/24.
Individuals who care for someone with an illness or disability for more than 35 hours a week are allowed to receive a weekly allowance of £81.90.
To be eligible for the allowance, people should not earn £151 or more per week, but this will increase up to £196 from April 2025.
If any carer earns even one pound more than the fixed amount, they will not get any Carer’s allowance.
As reported by The Guardian, more than 262,000 carers were forced to pay back over £325 million in overpayments who unintentionally broke Carer’s Allowance rules, while 600 carers were prosecuted and received criminal records after the DWP sent their cases to the Crown Prosecution Service.
MPs and charities have argued that the watchdog’s report reveals that DWP’s failure to properly staff its Carer’s Allowance department and fix flaws in the benefit’s design has led to major financial distress and emotional stress.
The UK Charity Carers stated the report was
“further evidence of a broken system that is failing unpaid carers.”
An investigation by The Guardian this year revealed that Conservative ministers allowed overpayments to increase uncontrollably for years, despite senior officials assuring in 2019 that new data-matching technology would solve the issue.
According to the NAO, the “cliff edge” issue in current carer’s allowance rules, where a small earnings change can lead to significant overpayments, is placing claimants at financial risk.
The report said,
“This means it is important to identify an overpayment early or, better still, prevent it from occurring.”
The NAO’s figures show that outstanding overpayment debt in 2023-24 reached £251.7 million, a hike from £150.2 million in 2018-19, but a small decline from £252.7 million in 2021-22.
The DWP has consistently argued that they are not responsible for detecting earnings breaches or informing individuals about overpayments. They insist that claimants are legally bound to inform them of any changes that could affect their carer’s allowance eligibility.
The average family carer, most of whom are living in poverty, was forced to pay back over £1,000 for earnings-related payments in 2023, with two cases revealing £20,000 since April, suggesting that DWP missed locating breaches for more than five years.
Ed Davey, the Liberal Democrat leader, said,
“It is appalling that so many family carers have been caught up in this scandal of the DWP’s own making. This has caused misery and distress on a staggering scale.”
Carers UK’s CEO, Hannah Walker, urged that any suggestions from the government-ordered review must be put into action without any delay.
The review, set to be completed by next summer, will examine the reasons for carer’s allowance overpayments, propose prevention strategies, and explore better methods to support affected carers.
Minister for Social Security and Disability Sir Stephen Timms stated,
“This report sets out the scale of the challenge and underlines the importance of our independent review into overpayments so we can make the system fairer for thousands of selfless carers.”
He added,
“Carers deserve to be supported, which is why we are boosting the earnings threshold, benefiting more than 60,000 people, while our review will get to the bottom of the problem so we can protect carers from unfair debt and protect taxpayers’ cash.”