DWP overhauls carer’s allowance checks with ‘cliff edge’ penalty for £1 plus breach

The DWP has been ordered to hire more staff to investigate 100% of carer’s allowance earnings breach alerts and to notify carers if they are at risk of getting into debt

Government ministers have said there will be an overhaul of the way carer’s allowance overpayments are checked as a way to fix the system which has left thousands with debts and criminal records.

The Department for Work and Pensions has been ordered to hire more staff to investigate 100% of carer’s allowance earnings breach alerts and to notify carers if they are at risk of getting into debt.

For the last six years the department only investigated 50% of alerts on cost grounds, even though it meant huge numbers of carers were accruing massive overpayments without their knowledge, the Guardian revealed last year.

Campaigners are hoping the move could reduce the numbers of carers falling foul of the current system. However, it warned that thousands more will be hit by overpayments as massive backlogs of alerts are processed over the coming months.

Carers in both England and Wales who breach carer’s allowance earnings limits of £196 a week have to return the full £83.30 a week benefit payment. But it is a “cliff edge” penalty, meaning that going £1 a week over the limit for one year would result in the claimant being hit with a repayment demand not of just £52, but a whopping £4,330.

The refusal to properly check the alerts has been central in the carer’s allowance scandal, exposed by The Guardian articles over the past year.

DWP has been accused of creating a lottery in which some carers are alerted to earnings breaches and some are allowed to accrue years of overpayments. Some cases have repayment sums as high as £20,000.

Overpayments have spiralled, with 144,000 carers currently repaying over £250m. The DWP promised MPs six years ago that theintroduction of electronic earnings alerts from HMRC would eradicate overpayments, but it has neglected to deploy enough staff to do the checks.

A report is expected by an independent government-commissioned review of the carer’s allowance in the summer.

The review will look at how the overpayment scandal came about and how to fix it, and is part of what ministers have promised will be a “new settlement” for care.

Chief executive of Carers UK, Helen Walker, said: “When the alerts target was set at 50%, thousands of carers were missed and experienced large and damaging overpayments, in a situation that could have been largely avoided”, The Guardian reported.

But she said an estimated 20,000 are still at risk due to backlogs related to national insurance credits which the DWP allowed to build up.

A DWP spokesperson said: “We are drafting in extra staff so the backlog of all under- and overpayments are investigated promptly and corrected. We will agree affordable repayment plans and, when issuing debt management notifications, signpost to independent advice services”, The Guardian reported.

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