Overpayments of carer's allowance
This House of Commons landing page briefing has been prepared in advance of a debate entitled "Overpayments of carer's allowance". This will be led by Ruth George MP and will take place in Westminster Hall on Tuesday 27th November, starting at 11am and lasting for 30 minutes.
Carer’s Allowance is a non-contributory, non-means-tested benefit paid to people who care full-time for someone who is severely disabled. It is an “income replacement” benefit, intended to provide a measure of income-maintenance for people unable to do full-time paid work because of their caring responsibilities. It is not a payment for care provided or a “carer’s wage”. It is currently worth £64.60 a week.
At February 2018 there were over 840,000 recipients of Carer's Allowance in Great Britain.
To be entitled to Carer’s Allowance, a person must be providing at least 35 hours of care a week for someone in receipt of a qualifying disability benefit, not be in full-time education (21 hours or more a week), and, if in paid work, have earnings after certain deductions of no more than £120 a week after certain deductions.
The qualifying disability benefits are:
- the middle or highest rate Disability Living Allowance care component
- Attendance Allowance (either rate)
- Personal Independence Payment daily living component (either rate)
- Constant Attendance Allowance at or above the normal maximum rate with Industrial Injuries Disablement Benefit, or at the basic (full day) rate with a War Disablement Pension
- Armed Forces Independence Payment
The earnings limit has been increased substantially in recent years, but carers’ organisations still argue that the rules make it difficult for carers to combine paid work with their caring responsibilities. A person loses entitlement to Carer’s Allowance completely as soon as their earnings exceed the threshold – the “cliff edge” problem.
Further information can be obtained in the Commons Library briefing paper SN00846, Carer’s Allowance, 19 July 2018.
Information on the Carer’s Allowance rules can be found in the following:
- Carers UK’s factsheet, Carer’s Allowance 2018/19
- Disability Rights UK Factsheet F30, Carer’s Allowance
Overpayments issue The Guardian report
On 7 October 2018, The Guardian reported that “more than a thousand carers face being prosecuted for fraud” and that another “10,000 carers could face fines” owing to moves by the Department of Work and Pension to recoup money reportedly paid incorrectly over several years (“UK carers face fines and fraud charges because of overpaid benefit: Campaigners say DWP’s move to recoup money paid out is ‘not welfare priority’”).
The Guardian report stated that overpayment cases involved people who had received more Carer’s Allowance than they were entitled to owing to a change in their earnings so that they started to earn more than £120 a week, or because they had enrolled as a student in full-time education, often without realising that this affected their entitlement. It reported that in some cases people have received £10,000 more than they were entitled to.
The report stated that DWP had introduced a new system for checking Carer’s Allowance awards intended to result on overpayments being picked up more quickly, but that the new system “seems to have made the situation worse.”
The Guardian quoted Pritie Billimoria of the charity Turn2us as saying that that carers were already “disproportionally socially and economically vulnerable” and that “Forcing carers to pay back a possibly accidental overpayment in a radically short period should not be a welfare priority.” It also quoted Neil Gray, the SNP’s Work and Pensions Spokesman, as calling for an urgent review to establish how big the problem is, alongside a review of the eligibility criteria for Carer’s Allowance, “as it’s not clear that there is an income ceiling which disqualifies carers from receiving support.”
Carers UK responseIn response to this report, Carers UK released a statement on 8 October which included the following:
At Carers UK, we hear from carers who are told that they have been overpaid Carer’s Allowance. This can happen when carers did not realise the rules in relation to earnings, studying or other rules. This can be hugely stressful, particularly for those providing significant care or who are juggling responsibilities, or who are on low incomes and are finding it hard to manage financially. Our most recent survey found that over a third of carers (37%) were struggling to make ends meet. When that overpayment goes back several years, this can become extremely difficult or even impossible for the carer to repay.
The Department for Work and Pensions should be pointing these areas out earlier to carers to stop this from happening, and acting on overpayments more quickly. This would make life easier for everyone, and it would reduce the number of carers whose overpayments go back years.
We need to make it easier for Carer’s Allowance claimants to report changes so that this can be done more quickly. Unlike Universal Credit, Carer’s Allowance claimants cannot manage their details or account online and we think this should change. This would make it easier for carers to upload supporting documents and notify changes to the DWP quickly and efficiently. We think this would help the DWP to update carers in receipt of Carer’s Allowance much more easily, with reminders on what to do if their earnings change, or they start studying, for example. We think that this would be better for everyone and we have proposed this to the Department for Work and Pensions.
Those without online access would still be able to use the telephone or write in, as Carer’s Allowance recipients largely have to do now to make changes happen.
No-one wants a situation where carers who are earning and caring are concerned about whether their benefits will be affected. We want to ensure that carers are clear about the entitlements and rules and are able to report changes quickly and easily, and stay in touch with the labour market where they are able to do so.
The most important thing is for carers to read our detailed advice on Carer’s Allowance at www.carersuk.org/carersallowance
The Government’s responseIn response to a variety of written parliamentary questions on this topic following publication of the Guardian report, the DWP has provided the following information:
Asked by: George, Ruth | Party: Labour Party
To ask the Secretary of State for Work and Pensions, how many cases of recovered overpayments of carers allowance due to earnings in excess of the threshold related to earnings which exceeded the threshold by (a) less than 10 per cent and (b) less than 20 per cent in each of the last 10 years.
Answering member: Justin Tomlinson | Party: Conservative Party | Department: Department for Work and Pensions
The Department for Work and Pensions (DWP) recognises and appreciates the vital contribution made by informal carers who provide invaluable support for relatives, partners, friends and neighbours who may be ill, frail or disabled. We also recognise and value the work that carer’s organisations undertake for and on behalf of carers.
Since 2010 the rate of Carer’s Allowance has increased from £53.90 to £64.60 a week, meaning an additional £550 a year for carers. By 2022/23 we are forecast to spend around £3.7 billion a year on CA, a real terms increase of more than a third since 2016/17.
DWP has a duty to protect public funds and an obligation to ensure that, overpaid benefit payments are recovered in accordance with the appropriate social security legislation.
In September 2018 DWP introduced the Verify Earnings and Pensions (VEP) system for use in Carers Allowance. The VEP service presents earnings and employment data to users, with an automated alerts service generating notifications of earnings or pensions related changes. This allows benefit awards to be updated far more quickly.
Where there are discrepancies DWP will contact the claimant for further information. This activity is part of the normal claims handling and maintenance process.
DWP has a Carers Allowance (CA) Fraud and Error Framework which addresses potential fraud and error losses in CA. Activity is based on CA overpayment data. This data shows that the main causes of errors are earnings and to a lesser extent, change of entitlement and hospitalisation. Individual benefit strategies have been developed in order to target these risks types
Data is only available from 2011/12. Table 1 below shows the volume and value of CA new debt overpayments deemed recoverable for the period available up to 2017/18. Table 2 shows the monetary value of CA overpayment recoveries in each year. Please note, recoveries in a financial year won’t necessarily correspond to the new debts raised within that year.
DWP has different deduction rates to be applied in different circumstances and these rates can vary dependent upon a claimant’s particular circumstances. Because of this it would not be possible to provide a meaningful average recovery amount.
Table 1
Financial Year
Count of New CA Debts
Value of New CA Debts Raised in Year
2011/12
30.7k
£39.32m
2012/13
22.4k
£28.27m
2013/14
19.1k
£25.86m
2014/15
14.4k
£18.01m
2015/16
14.5k
£16.74m
2016/17
21.4k
£19.01m
2017/18
18.1k
£18.18m
Table 2
Financial Year
Value of CA Debt Recovered in Year
2011/12
£18.02m
2012/13
£18.65m
2013/14
£19.28m
2014/15
£19.60m
2015/16
£19.01m
2016/17
£21.12m
2017/18
£20.91m
The Government keeps the CA earnings limit under regular review. In April 2018, the CA earnings limit increased from £116 to £120 a week. This 3.4% increase was higher than average earnings growth (Sep 17). In the Economic and fiscal outlook (March 2017) the OBR forecast that average earnings would increase by around 7.5% between 2015 and 2018, whereas we will have increased the CA earnings limit by around 9%.
Table 3 below shows a breakdown of the recoverable CA overpayment volumes by reason for the same period available. It should be noted that not all debts will be cleared in the year in which they have been raised.
Table 3
Financial Year
Count of CA Debts
Reason for CA Overpayment
2011/12
5.5k
Ceased to Care 35hours
9.0k
Earnings over CA Limit
0.3k
Full Time Education
2012/13
5.0k
Ceased to Care 35hours
8.0k
Earnings over CA Limit
0.3k
Full Time Education
2013/14
5.1k
Ceased to Care 35hours
9.2k
Earnings over CA Limit
0.4k
Full Time Education
2014/15
4.2k
Ceased to Care 35hours
6.7k
Earnings over CA Limit
0.3k
Full Time Education
2015/16
4.6k
Ceased to care 35hours
6.5k
Earnings over CA Limit
0.2k
Full Time Education
2016/17
7.5k
Ceased to Care 35hours
8.7k
Earnings over CA Limit
0.4k
Full Time Education
2017/18
4.9k
Ceased to Care 35hours
9.3k
Earnings over CA Limit
0.2k
Full Time Education
Data on specific earnings thresholds as requested is not recorded.
23 Oct 2018 | Written questions | Answered | House of Commons | 181308
Date tabled: 18 Oct 2018 | Date for answer: 23 Oct 2018 | Date answered: 23 Oct 2018
Asked by: George, Ruth | Party: Labour Party
To ask the Secretary of State for Work and Pensions, how many of the prosecutions relating to overpaid carer's allowance related to (a) 35 hours of care per week not being carried out, (b) earnings in excess of the threshold and (c) carers taking up an education course exceeding 21 hours of study time in each of the last 10 years.
Answering member: Justin Tomlinson | Party: Conservative Party | Department: Department for Work and Pensions
The Department for Work and Pensions (DWP) has a duty to protect public funds and an obligation to ensure that, overpaid benefit payments are recovered in accordance with the appropriate social security legislation.
DWP does not routinely publish prosecution statistics. The information is not available at a granular level. The level of detail requested could be provided only at disproportionate cost.
23 Oct 2018 | Written questions | Answered | House of Commons | 181307
Date tabled: 18 Oct 2018 | Date for answer: 23 Oct 2018 | Date answered: 23 Oct 2018
Asked by: Gray, Neil | Party: Scottish National Party
To ask the Secretary of State for Work and Pensions, how many prosecutions of carers for overpayments due to earning restrictions has his Department sought in each year since 2008.
Answering member: Sarah Newton | Party: Conservative Party | Department: Department for Work and Pensions
The Counter Fraud & Compliance Directorate (CFCD), part of the Department for Work and Pensions (DWP) is responsible for the prevention, detection and, where appropriate, investigation of fraud and error against all benefits administered by and on behalf of DWP.
DWP does not routinely publish prosecution statistics and the specific information requested is not available at a granular level. This could only be obtained at disproportionate cost.
12 Oct 2018 | Written questions | Answered | House of Commons | 176332
Date tabled: 08 Oct 2018 | Date for answer: 11 Oct 2018 | Date of holding answer: 11 Oct 2018 | Date answered: 12 Oct 2018
Work and Pensions Committee inquiry
On 23 November, the House of Commons Work and Pensions Committee announced that it was opening an inquiry into overpayments of Carer’s Allowance. This will involve a one-off evidence session on Wednesday 28 November with Emily Holzhausen OBE, the Director of Policy and Public Affairs at Carers UK “to explore why the levels of overpayments in Carer’s Allowance are so high, how clear the rules around earnings for carers are, and the impact that repaying overpayments has on carers.”
The Committee Chair, Frank Field MP, has written to the DWP to seek further clarification on the number of cases in which overpayment is being pursued as well as how many will result in prosecution, in addition to further information.
In its press release, the Committee made the following comments on overpayments of Carer’s Allowance to provide further context to its inquiry:
The DWP estimates that it overpays £160 million in Carer’s Allowance on an annual basis and is now looking to recover that money. This means that many carers could have to repay up to thousands of pounds, or face more serious action; 1,000 carers could face prosecution and up to 10,000 may face fines. The Committee has decided to investigate and launched an online survey to gather the experience of claimants’ who have been contacted by the Department about overpayments.
There are 6.5 million unpaid carers in the UK who make a hugely valuable contribution to society. Many carers will be entitled to Carer’s Allowance, but this Committee has previously reported on the “cliff edge” within this benefit; if someone earns just £1 over the earnings threshold, they lose 100% of their Carer’s Allowance. It has been reported that many carers are often not aware that a rise in their earnings has taken them over this threshold. This means that they could, inadvertently, continue to receive Carer’s Allowance when they are no longer eligible, resulting in an overpayment.
The press release also quoted Committee Member Ruth George MP:
Our health and social care systems would fall apart without the contribution of unpaid carers, who perform a selfless and invaluable role for at least 35 hours a week to qualify for the £64.80 carer’s allowance – that’s a maximum £1.85 an hour. When I worked with retail staff, we would often see someone get a small pay rise and inadvertently exceed the earnings threshold. It was bad enough when this was picked up at the end of the year and they had to find and pay back hundreds of pounds. When carers are only being informed of overpayments years later and potentially being taken to court for thousands of pounds, it is imperative for the Committee to look at the evidence and question whether Government is acting in the best interests not just of individuals, but of society and the wider economy.