DWP should consider writing off carer’s allowance debts, MPs have urged

By Vicky Shaw, Personal Finance Correspondent2nd August 2019News EnglandCarers, Government / Politics, Kinship Care, News England

The Department for Work and Pensions (DWP) should consider writing off money owed by carers due to its own administrative failures and their honest mistakes, MPs have urged.

The Work and Pensions Committee said the department needs a new approach to pursuing debts for overpayments of Carer’s Allowance and should consider writing off this cash.

There are around seven million carers in the UK, making an unpaid contribution of £132 billion to the UK economy every year, the committee said.

It said most people will become a carer at some point in their lives, caring for a partner, parent, friend or disabled child who cannot cope without their support.

Carer’s Allowance enables people to receive £66.15 a week if they care for someone for at least 35 hours a week, provided the person being cared for receives certain benefits.

Earnings thresholds around Carer’s Allowance mean that carers can be heavily penalised when they make small, honest mistakes, the committee said.

If a claimant fails to report a rise in their earnings of even £1 above the weekly threshold, the department counts this as overpaying them by the full rate of £66.15 a week.

The situation has been made worse because the department allowed overpayments to build up because of administrative failures and a prolonged lack of resources, the committee said.

Pursuing debts for past failures can be costly for both the department and carers and debts can take decades to repay.

The committee said the department should now review individual cases where it is seeking to recover overpayments of Carer’s Allowance and where its own administrative failures have allowed them to accrue.

It should consider on a case-by-case basis whether overpayments are worth pursuing given its culpability, the cost of recouping the money and the impact on the lives of carers and those who they care for, the committee said.

It suggested the department should start with cases of overpayments worth over £2,500 and decide whether it should be writing off amounts where the claimant has made an error in failing to report changes in their circumstances.

Frank Field, chairman of the committee, said: “DWP has got its priorities all wrong. Bullying carers is no way to recognise, much less support, the invaluable contribution they make to our society and the people they care for, or the hundreds of billions of pounds they save the taxpayer.

“Will the Government now please get off the back of carers? They have important work to do.”

Emily Holzhausen (pictured), director of policy and public affairs at Carers UK, said: “Carers who have been impacted by overpayments of Carer’s Allowance – many already struggling financially – are experiencing considerable stress and anxiety, 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.

“It’s clear that the current design of Carer’s Allowance places a huge administrative burden on carers and causes a lot of confusion. Carers need a solution to the sharp cliff edge of the earnings threshold that currently means their 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.”

Shadow work and pensions secretary Margaret Greenwood said carers are “paying the price for a rigid system that is poorly explained”.

“This report sets out clearly just how badly the government has failed carers. As a result, thousands of carers are being put through the stress of repaying money, with many pushed into financial hardship,” the Labour MP added.

A DWP spokesman said: “We value the vitally important role carers play in our society and since 2010 we’ve increased Carer’s Allowance so they now receive an extra £635 a year.

“We have made significant progress in addressing Carer’s Allowance overpayments and while we have a duty to the taxpayer to recover money in cases of fraud or error, safeguards are in place to ensure deductions are reasonable.”