PIP Changes: Impact on Carer’s Allowance

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Thursday 27 March.

“The Pathways to Work Green Paper sets out our plan to fix a broken system, providing proper employment support for those who can work, and a strong and sustainable safety net for everybody who needs it. We will change personal independence payments to focus support on those in the greatest need. That change will be in primary legislation, with a full debate and scrutiny in Parliament. The cost of personal independence payments has increased by £2 billion above inflation in each of the past five years, and those increases are carrying on. That is simply not sustainable.

In the Green Paper, we are consulting on how best to support those affected by the changes to eligibility, for example with transitional protections for those no longer eligible for PIP and for the entitlements linked to it, including carer’s allowance, as referenced in the honourable Member’s Urgent Question, and the universal credit carer element, which is an increasingly important part of the picture. The PIP changes will be implemented from November next year. They will apply to new claimants and to people at their award review after that date, and those with severe conditions who will never work will be protected.

I pay tribute to the millions of unpaid carers across the country. We recognise and value their vital contribution, providing care and continuity of support, including to many people with disabilities. The 2021 census indicated that approximately 5 million people in England and Wales are doing some unpaid care. As the honourable Member knows, we are delivering the biggest ever cash increase in the earnings threshold for carer’s allowance, increasing it by £45 a week to £196, benefiting more than 60,000 carers by 2029-30. Our reforms will build a system that is fairer and more sustainable so that it will always be there for those with the greatest needs to live with the dignity and support that they are entitled to”.

My Lords, I am sure that all noble Lords will agree that carers provide vital services and support to those who desperately need them. The speculation, leaks and briefings have spread fear, anxiety and distress among the most vulnerable about cuts to benefits, particularly for carers. How will His Majesty’s Government ensure that clear, effective and timely communication gets to those who will lose benefits and those who will not? What help and assistance will be provided to those who have had the cruellest of times as a result of this rushed decision?

My Lords, the one thing we can definitely agree on is that we support carers. We are grateful for the work they do. Society has reason to be grateful for the work they do. This Government have supported them. We have shown that by, for example, boosting the carer’s allowance earnings threshold by £45 a week to the highest level it has ever been since the benefit was created in the 1970s, benefiting more than 60,000 carers by 2029-30. The Government are making necessary changes to stem the rising costs and reform the focus of our sickness and disability benefits system. Those changes will affect some people on carer’s allowance.

The noble Baroness need not worry about reading leaks. All the details are set out in the Green Paper, which I commend to her as a good read for this evening, perhaps before she goes to bed. We are deliberately setting out to consult on how we can support those affected by any of the measures in it. I assure her that nothing will happen overnight. No one is going to lose their benefits overnight. Even when the new changes come in, nobody will lose their benefits until there has been a full and individual assessment of their personal circumstances.

My Lords, I am sure the Minister will agree that our society, with an ageing population and keeping people with profound disabilities alive, is increasingly dependent on carers. Can the Minister assure the House that nothing will be done that will undermine the value we attach to carers’ responsibilities and make them feel that our society does not value them as a whole?

I thank the noble Lord for that excellent question. I reiterate our absolute appreciation of the work that is done by both paid and unpaid carers. We are very conscious of the fact that, as a country, we have not been able to sort out the problems in our social care system. Adult social care has put extra pressure on to unpaid carers, which is one of the reasons—a clear reason—why we have asked the noble Baroness, Lady Casey, to produce a report by next year on the medium-term challenges, so that we can try to get a long-term fix by 2028. In the short term, I hope that carers will be reassured by the investment the Government are making to, for example, allow them, for the first time ever, if they are working alongside caring, which many are, to earn the equivalent of 16 hours at the national minimum wage before losing any of their benefit.

My Lords, forgive me if some of the statements and replies are confusing to me. Something is said in one place and something is said in another. Can the Minister tell us why, in the debate that followed her Spring Statement last week, the Chancellor said that the Government were providing “additional support for carers”, when they are actually reducing carers’ benefits spending by £500 million by 2029-30? The statements and replies are confusing.

My Lords, there is confusion, but I do not think it is the Chancellor who created it. I have heard a suggestion that carers’ benefits are being cut. Let me be clear: carers’ benefits are not being cut. Carer’s allowance will rise to £83.30 from next week, or the end of this week, and the Government have boosted the earnings threshold in carer’s allowance by the highest ever amount.

Secondly, reforms are being made to disability and sickness benefits. One of the consequences of those is to change some of the people who currently are entitled to the personal independence payment. Because carer’s allowance is paid to people who care for someone on personal independence payment, there will be some people currently getting carer’s allowance for whom there may not be an entitlement in future.

We spelled out clearly in the Green Paper that we would look at how we could support those who are losing entitlement in general as well as, specifically, carers who are losing entitlement. I want people to be clear: we are not cutting the value of the benefit; we are not changing the fact that they can earn more—but there will be some people who are getting carer’s allowance now, and who might have got it in the future, who will not get it. However, given the rate at which the PIP case load is growing, with all the changes that we are making we are stemming the rate at which spending on sickness and disability benefits goes up, not cutting it.

My Lords, at the very end of the Green Paper, in an annexe, is, I believe, the one and only reference to the impact of the personal independence payment cuts on unpaid carers. It says:

“The government will consider the impacts on benefits for unpaid carers as part of its wider consideration of responses to the consultation as it develops its detailed proposals for change”.

As the impact on carers is not included in the list of questions for consultation, can my noble friend the Minister explain exactly how the Government propose to consult on it? Are we talking about anything more than possible transitional protection?

My Lords, I cannot tell my noble friend at this stage what it will be, both because we are listening to the wider views and because we are going to take our time to work this through. To be clear, we specifically said in the Green Paper that we would look at the impact on carers and look at ways in which we could support carers who might find themselves losing entitlement to carer’s allowance.

To give a sense of timescale, assuming that Parliament approves the primary legislation that will bring about these changes to disability and sickness benefits, the changes to PIP that will affect carer’s allowance will not come in until November 2026. Only after that will somebody who is getting PIP at the moment see their entitlement change. It will be only as and when they are called to a review and their own circumstances are reviewed that their entitlement changes, which could in turn affect carer’s allowance. So I am confident that we have plenty of time available to us to work through the way in which we can support those who will lose out as a result of these changes.

My Lords, will the Minister explain how the Government will approach what is an increasing number of households, particularly as people get older, where you have two people in a household, both with some level of incapacity and one in receipt of PIP, who may lose it? How will the Government assess the carer who has health issues and get a balance that recognises that, for those two people living together, there is a level of support between the two? Remove the finance from one of them and you affect two people.

The noble Baroness is right. There are cases—unusual cases—where both members of a couple are entitled to sickness or disability benefits, and even cases where both are getting carer’s allowance to care for each other. I do not know how many such cases there are. For that to work, each party would have to be sufficiently sick or disabled to be entitled to PIP, and would have to lose it, and each would also have to be able to provide at least 35 hours’ unpaid caring work a week. It is not that such circumstances are not there, but the interaction of different parts of our benefit system is complex, which is why we want to take our time to work through the impacts on various circumstances.

Will the Minister explain the interrelationship between the DWP and the Department of Health and Social Care? Many unpaid carers are unable to work because of the many hours of care they provide. If they lose their carer’s allowance they will have to return to work, which will mean that the disabled people they care for have to have care provided by the state. Does the Minister have any figures to hand?

Some people get carer’s allowance—I know the noble Baroness understands this, but this is for the benefit of the House—while others will have a carer’s element in universal credit, and that automatically means they are not expected to be available to work. However, I assure her that work coaches can adjust conditionality in individual cases, taking account of the caring responsibilities, even if the carer’s element is not paid. Again, we will look at this as part of our consideration of the impacts.

My Lords, I am grateful to the Minister for what she has said. I would expect nothing less from our Government than support for unpaid and paid carers. Exactly what arrangements are being made for consultation with unpaid carers? They are an inchoate and ununionised bunch, although there are many admirable charities. In a related question, what are the latest figures for the assessment of carers who are still falling into the trap of unwittingly working too many hours and therefore are still being penalised by DWP? We were told that the Government were acting on that.

My Lords, those are two important questions. I know we are working up the consultation process at the moment. That process will not start until we publish all the versions of the Green Paper in early April, including the accessible versions, but we are holding public events in person and virtually, as well as being open to written responses. I will make sure that we are open specifically to comments from unpaid carers.

On the question of overpayments and carer’s allowance, my noble friend may be aware that we have started an independent review into carer’s allowance overpayments, which will conclude this summer. It is being led by Liz Sayce, who brings enormous experience as a former Disability Rights UK chief executive and now a visiting professor in practice at the LSE. The review is specifically focusing on carer’s allowance overpayments. We are trying to work through the questions of how to manage that at the moment and whether there is there any way to reform the system to stop this happening in future.