Carers saving Treasury billions every year

The Work and Pensions Committee has warned that carers are being disproportionately heavily penalised for years of Department for Work and Pensions administrative errors or their own honest mistakes.

It is estimated that there are approximately seven million carers in the UK (around one in every eight adults) who make an unpaid contribution of £132 billion to the UK economy every year. According to Carers UK’s 2019 ‘State of Caring’ report, 39 per cent of these are in financial hardship and 73 per cent of carers on Carer’s Allowance (CA) are unable to afford to save for retirement.

In its report on the Overpayments of Carer’s Allowance, the committee of MPs are calling on the government to completely reassess its approach, consider writing off debts due to its own protracted administrative failures. With the number of carers at an all-time high, saving the Treasury billions of pounds annually, it is now vital that the government provides carers with both the support and recognition they deserve.

The committee says that the DWP has allowed overpayments to build up because of administrative failures and a prolonged lack of resources and places the burden of reporting even minor changes in their circumstances on carers.

The National Audit Office reported in April that about two-thirds of carers with debts for earnings-related overpayments over £2,500 would have had their overpayments stopped earlier if the DWP had put in place sufficient staff. The DWP was aiming to recoup overpayments from 80,000 people, worth about £150m.

Frank Field, chair of the committee, said: “Carers are damned if they do, damned if they don’t: penalised as soon as they earn even a pound over the threshold, and punished by the department’s own administrative failures and hopelessly outdated systems. The department sets itself no targets for tackling fraud and error for individual benefits, yet jumps on struggling carers for every honest mistake. DWP has got its priorities all wrong. Bullying carers is no way to recognise, much less support, the invaluable contribution they make to our society and the people they care for, or the hundreds of billions of pounds they save the taxpayer. Will the government now please get off the back of carers? They have important work to do.”

Emily Holzhausen, director of Policy and Public Affairs at Carers UK, said: “Carers who have been impacted by overpayments of Carer’s Allowance - many already struggling financially - are experiencing considerable stress and anxiety, facing debt that could affect their incomes for years to come on top of demanding caring responsibilities. The department must urgently consider writing off overpayments where its administrative failures have allowed them to accrue. They should also assess the impact of their recovery of overpayments to ensure they don’t push people into further financial hardship.

“It’s clear that the current design of Carer’s Allowance places a huge administrative burden on carers and causes a lot of confusion. Carers need a solution to the sharp cliff edge of the earnings threshold that currently means their earning even £1 over the threshold sees a 100 per cent loss of benefit. It is the DWP’s job to provide frequent and clear information about the earnings threshold and they must introduce a simpler way for carers to track and report their earnings.”