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DWP must ‘get a grip’ and urgently improve carer’s allowance

DWP must ‘get a grip’ and urgently improve carer’s allowance
Rebecca Goodman
Written By:
Rebecca Goodman

The Department of Work and Pensions (DWP) must urgently improve how it monitors and calculates carer’s allowance, a select committee has said.

It also accused the DWP of failing to act on recommendations to improve the process, which were made by the National Audit Office (NAO) in 2019.

Carer’s allowance is a benefit for anyone who carries out 35 or more hours of unpaid care work per week. It is currently set at £81.90, but if a carer earns more than £151 per week (after tax, National Insurance and some other expenses including pension contributions), they cannot claim it.

Carers are also not allowed to claim the benefit if they’re in full-time education or if they study for 21 hours or more per week.

This weekly limit has been widely criticised, as even if the carer earns just 1p over the £151 limit, they must tell the DWP and repay the full allowance.

Thousands of carers building up debt through overpayments

The Works and Pensions Committee has this week called on the DWP to again address issues around how the benefit works.

One of the major issues is overpayments, and this has been a problem since 2019. It said that, at the moment, carers are often overpaid and not notified, leading to them building up big unmanageable debts to the DWP.

It said this happens because the system is overly complex and confusing, and the DWP is not quick enough to notify carers if they are overpaid.

A recent parliamentary question revealed that 34,500 carers were overpaid by the DWP in the year 2023/24.

The committee said overpayments are a “significant issue” for carers. It said these overpayments, which the DWP can take several years to recover, can cause mental distress to carers.

It has asked for several changes to the way the benefit works. It wants carer’s allowance to be benchmarked against living costs, and the weekly earnings limit to be linked to national living wage increases.

It also said a taper rate should be introduced – instead of the current cliff-edge limit of £150 per week – and communication needs to be improved when it comes to telling carers about overpayments. The committee has asked for a response from the Government by 17 June 2024.

The letter comes as the Government this week said it would consider contacting carers via email and text message if they are overpaid. But the committee said that, while these changes are welcomed, “it’s imperative they are introduced without delay”.

‘The Government allowed carers to rack up unmanageable debt’

Rt Hon Sir Stephen Timms MP, chair of the Work and Pensions Committee, said: “The Government has known for years about flaws that have plagued the payments system for carer’s allowance, but has just allowed many unpaid carers to unwittingly rack up unmanageable levels of debt. The DWP must now move without delay to get a grip of the problem and ensure carers are no longer subjected to the distress that such overpayments can cause.

“On top of the problems with overpayments, we have heard how the rate of carer’s allowance leaves many struggling to make ends meet. The Government should make sure that carers who carry out their tasks without reward are made to feel valued by ensuring that the payment properly reflects living costs.”

The DWP has also this week published its research on the experiences of claiming and receiving carer’s allowance, which was completed in 2021.

Helen Walker, chief executive at Carers UK, said she welcomed the research but questioned why it took three years to publish.

She said: “Carer’s allowance is the lowest benefit of its kind at just £81.90 per week; this is clearly evidenced in the research, which highlights that the majority of claimants live in low-income households.

“The lower level of qualifications of the claimants further highlights the need to change the eligibility criteria for carer’s allowance to enable unpaid carers to gain qualifications whilst providing vital care, which could build their confidence and prepare them for paid work if their caring role comes to an end.”

A DWP spokesperson said: “Carers across the UK are unsung heroes who make a huge difference to someone else’s life, and we have increased carer’s allowance by almost £1,500 since 2010.

“We are progressing an enhanced notification strategy as part of our ongoing commitment to customer engagement, which will help ensure customers fulfil their obligations to inform DWP when changes in their circumstances have occurred, building on existing communications.

“We are committed to fairness in the welfare system, with safeguards in place for managing repayments, while protecting the public purse.”