Unpaid carers being forced to repay £250m to DWP

Unpaid carers are being asked to repay more than £250 million after many were unknowingly overpaid their allowance, new figures show.

The government is seeking to recover money from more than 134,000 carers.

Carer’s Allowance must be repaid in full if a strict earnings limit is exceeded by even a few pence.

The Department for Work and Pensions (DWP) said it was “progressing an enhanced notification strategy” to alert carers to overpayments.

Wren Seaward is a full-time carer for her husband John who relies on a wheelchair because of severe osteoarthritis. She now has to pay back £245 per month after unwittingly receiving £5,000 in overpayments.

She said this had brought a “considerable financial strain” and “makes many of the things we could do in the home to make John’s life easier…very difficult to access”.

Unpaid carers who provide care for someone for more than 35 hours a week are entitled to receive the Carer’s Allowance.

However they are only eligible if they earn less than £151 per week after tax. If this is exceeded following a change in circumstance such as a pay rise or moving jobs, they are no longer eligible and have to repay any allowance received in full.

The DWP has previously said that “claimants have a responsibility to inform DWP of any changes in their circumstances that could impact their award, and it is right that we recover taxpayers’ money when this has not occurred”.

But carers have told the BBC they were unaware they had exceeded the threshold until being informed years later, by which time the sums had run into the thousands.

In 2019, a report by the Work and Pensions Committee warned carers could be “heavily penalised for making honest mistakes”, as errors in claims were not being spotted quickly enough by the DWP due to “problems with its systems” and “staff shortages”.

At the time, the government said it believed it was “well on the way” to fixing those problems and limiting overpayments.

On Thursday, the Work and Pensions Committee warned there has “not been progress” in limiting the impact of the problems raised five years ago, and called on the DWP to “improve urgently” how it monitors and communicates allowance overpayments.

Labour MP Sir Stephen Timms, who chairs the committee, said the government “has known for years” about the issues, but had “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,” he said.

The latest figures show more than twice as many women are in debt because of overpayments, roughly in line with the proportion that receive Carer’s Allowance.

A report by the Department for Work and Pensions (DWP) published last week said, of more than 1,000 carers surveyed, 3% had to make repayments after changes in circumstances meant that they received the benefit in error.

Emily Holzhausen from Carer’s UK, said carers are often “shocked and horrified” when they find out they have been overpaid.

“It’s devastating for their mental health, and feels really tough paying that back”, she said.

Gina Price cared for her dad while working part-time at a petrol station. She said she would sometimes agree to work an extra shift, but would do fewer other weeks. This way, she believed she would remain under the earnings threshold to qualify for the benefit.

She now owes the DWP around £7,000 in overpayments, and said the debt was a “huge blow”.

It is “a big debt by anyone’s standards”, let alone someone working part time, she added.

Liberal Democrat leader Sir Ed Davey, a carer himself, has called for these debts to be cancelled.

“It’s just unbelievable” that carers are being forced to repay as a result of the “government’s own incompetence”, he told the BBC.

“People work hard, they pay their taxes, they look after their loved ones, the government should be incentivising work,” he said.

The Department for Work and Pensions said the total amount of Carer’s Allowance overpayments “includes historical debts which the department is seeking to recover”.

“In comparison, Carer’s Allowance expenditure is forecast to be £4.2 billion this year alone,” it 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,” the department added.