Review of carer’s allowance overpayments announced

The government will commission an independent review of overpayments of carer’s allowance, work and pensions secretary Liz Kendall said today.

The review will be led by disability rights campaigner Liz Sayce and will examine how overpayments have occurred, how affected carers can be supported and how to reduce the risk of them happening again.

Carer’s allowance is worth £81.90 per week and is paid to people aged over 16 who cares for someone who claims a qualifying benefit – such as disability living allowance, personal independence payment or attendance allowance – for at least 35 hours a week.

However, claimants may earn no more than £151 per week after tax, national insurance and expenses and, should they breach this limit, they must repay all of their carer’s allowance for the weeks in question.

Carers’ £251m debt to DWP

As of November 2023, over 991,000 people received carer’s allowance. As of May this year, 134,800 claimants were in debt to the DWP due to overpayments with a total value of £251m, the then Conservative government revealed in the same month.

This followed an investigation this year by the Guardian that highlighted the hardships faced by carers being forced to repay significant sums by the Department for Work and Pensions after inadvertently going over the allowance earnings limit.

A subsequent report by Carer’s UK on the experience of 138 affected carers found they had had overpayments averaging £4,000, which had taken years to repay, “causing them financial difficulties and having a serious impact on their mental health and wellbeing”.

Carers ‘pushed to breaking point’

“Many unpaid carers have been pushed to breaking point looking after the people they love,” Kendall said today, in a written ministerial statement. “It is essential that we provide eligible carers with the support they need at the time they need it.

“The review will investigate how overpayments of carer’s allowance have occurred, what can best be done to support those who have accrued them, and how to reduce the risk of these problems occurring in future.”

Carer’s UK said overpayments were “having a devastating effect for many carers, causing additional stress and anxiety when many are already under huge pressure” and that it was “positive to see the government taking steps to tackle this scandal”.

“This review needs to tackle the root causes of overpayments to ensure these are prevented for as many carers as possible,” said the charity’s chief executive, Helen Walker.

Charity urges wider review of benefit

However, she said that the design of the benefit also needed reform, adding: “The low earnings limit for carer’s allowance, combined with a harsh ‘cliff’ edge’ for those who go over the limit by just a few pence is hurting employment opportunities – holding some carers back from working as much as they would like to and pushing others out of employment altogether.”

Sayce was chief executive of Disability Rights UK and its predecessor charity Radar from 2007-17 and was interim chair of the Social Security Advisory Committee, which advises the government on the welfare system, from 2019-20.

Her review will cover England and Wales, as carer’s allowance is a devolved matter in Scotland and Northern Ireland.