Carer’s Allowance recipients facing penalties as overpayments rocket | Personal Finance | Finance
The National Audit Office‘s newly published data revealed the outstanding debt from Carer’s Allowance overpayments soared to an astonishing £250million last year, marking a £100million increase from the 2018/2019 tax year.
Consequently, more than 260,000 unpaid carers have had to collectively repay £325million. An additional 600 carers were prosecuted and received criminal records when their cases of overpayment were referred to the Crown Prosecution Service.
The report also discovered that staffing levels in the Carer’s Allowance processing unit were reportedly determined by internal financial savings targets rather than ensuring adequate support for carers to prevent them from unknowingly overclaiming benefits.
Currently, 134,500 unpaid carers are still repaying overpayment debts after their income exceeded the threshold allowed to receive the benefit.
Due to the lack of a taper rate around its earnings criteria, if a carer earns £1 over this amount for 52 weeks, they must repay the full £4,258.80 of Carer’s Allowance they received despite only earning £52 more.
To make matters worse, many carers appear to be unaware that they are receiving more than they are eligible for, meaning the penalty notice comes as a shock.
This leaves unpaid carers facing financial hardship and emotional distress as they repay these staggering sums.
Charities and MPs have flagged the new data as a stark illustration of the current failures within the benefits system and the Department for Work and Pensions (DWP) to correctly distribute benefits and address overpayments.
The damning report comes amid the Labour government’s independent review of Carer’s Allowance.
The review’s goal is to uncover the reason for overpayments that carers are unaware of, explore modifications to the benefits system to shield carers, and figure out how the DWP can assist those repaying debts. Its findings and recommendations are scheduled for release next summer.
Sir Stephen Timms MP, Minister for Social Security and Disability, commented: “We need to get to the bottom of what has been going on. The Review also builds on the action we’ve already taken to boost the earnings threshold which will benefit more than 60,000 carers.”
As it stands, to qualify for the £81.90 weekly Carer’s Allowance, carers must not exceed a £151 weekly income.
Indicative of Labour’s commitment to supporting unpaid carers, this threshold is set to rise to £196 come next April, thereby increasing carers’ permissible earnings by £45 per week without jeopardizing their benefits or being ensnared in overpayment issues.
