The debacle of Carer’s Allowance overpayments has been in the news for several months now, with carers already struggling financially being put under an immense amount of pressure by the previous government to repay massive amounts of money they didn’t even knew they owed.
Although the news broke on a grand scale in the Spring, this is an issue that has been ongoing for many years with unpaid carers unknowingly finding themselves in terrible debt. Below we break down what has been happening, the government’s comments on it, and outline the Carers Allowance overpayment report conducted by Carers UK earlier this summer.
A break down of what has been happening
Many unpaid carers have found themselves struggling under the weight of unexpected debts, often accumulating significant amounts simply because they exceeded the earnings limit for Carer’s Allowance by even a few pence each week. This has led to the heart-breaking consequence of losing their financial support altogether, leaving them owing the Department for Work and Pensions hundreds, thousands, and in some cases, even tens of thousands of pounds.
It’s important to recognise that these substantial overpayment debts didn’t arise suddenly. In many instances, it took years for the Department for Work and Pensions to notify these carers that their earnings had crossed the threshold. Meaning that instead of being able to deal with the over payment quickly and efficiently, many people have now been left in crippling debt.
As stated above, many unpaid carers are already struggling financially – whether that is due to the cost-of-living crisis or having to cut down on work hours (or give up work entirely) to care for their loved ones. This has put many people who, not only have given up a lot personally to care for their loved ones, but also save the UK economy £162 billion per year, in an unthinkable position with no way out but to repay these debts of unthinkable amounts.
What has been the government’s response?
When meeting Carers UK in July to go over their report and recommendations regarding the Carers Allowance overpayments, Sir Stephen Timms, Government minister for social security and disability, and previous work and pensions committee chairman, said:
“Our country would grind to a halt without the millions of carers who provide care and continuity of support for vulnerable people every day. We recognise the challenges they are facing and we are determined to provide unpaid carers with the support they deserve. Meeting organisations like Carers UK and individual carers and hearing their views and experiences is key to helping us to establish the facts and make informed decisions. With respect to overpayments of Carer’s Allowance, we are moving quickly to understand exactly what has gone wrong so we can set out our plan to put things right.”
Summery of Carers UK report into Carers Allowance overpayments
These quotes were taken from page 7 of the Carers UK report.
‘Carers reported receiving overpayments of between £150 and £20,000, with the average overpayment debt being £4,000.’
‘The research found that the reasons why carers went over the earnings limit are varied, including: Fluctuating earnings, such as working on zero hours contracts, doing shift work with variable hours, or being self-employed. Working extra minutes or hours, such as covering for absent colleagues, or working slightly over a shift while waiting to be relieved by a colleague. Receiving a pay rise or minimum wage increase, as the National Living Wage has risen faster than the earnings limit in the past five years. Being paid extra during one month, such as receiving holiday pay, getting an end of year bonus, or being paid for attending a training course. Errors made by employers. Several carers said that their employer had not paid them correctly, or paid them late.’
‘The impact of the earnings limit was seen by carers as a barrier to paid work. Many carers said that the Carer’s Allowance earnings limit affected their employment situation: they cut back on hours or gave up work completely.’
‘News of overpayments often came as a shock to carers, had caused them financial difficulties and had a negative impact on carers’ mental health.’
‘Many carers reported that it took years to pay back the debt and many were still in the process of paying it back. Some had left employment due to the stress, strain and fear of having another overpayment only to be living on a reduced income as well as having to pay off the overpayment debt. For others, Carer’s Allowance was stopped without warning causing them severe financial difficulties. This is on top of significant unpaid caring responsibilities for older, ill or disabled relatives.’
‘When asked what changes to Carer’s Allowance would help them to juggle work and care more easily, the most common response was raising the earnings limit. 75% of carers said that raising the earnings limit to at least 21 hours and pegging it to the National Living Wage would be helpful.’
To see the full Carers UK report click here. To learn more about Carers UK visit their website here.
