DWP to send text message warnings benefits claimants over ‘earnings limit’ | Personal Finance | Finance

The DWP could send text messages to people who have been overpaid their benefits after some were forced to repay thousands of pounds.

A quirk of the benefits system concerning Carer’s Allowance means that if any carer claiming the benefit is overpaid even by a single £1, they must repay their entire benefit – a situation Martin Lewis described as a ‘cliff edge’ instead of being tapered like other benefits such as Child Benefit.

Tapering, by contrast, gradually reduces your entitlement over a certain threshold and asks you to pay back an amount depending on how far over the threshold you are, until you end up paying it all back at a certain point.

Now to fix the Carer’s Allowance cliff edge, the government is considering a text message service.

Work and pensioners minister Sir Stephen Timms said the department was reviewing ways to stop carers getting too much from the system, which can happen when people’s earnings exceed the benefit threshold.

Sir Stephen said: “The work of unpaid carers is absolutely vital and often heroic. We are determined to give unpaid carers the support they need. We are looking at the moment at options on tackling the problem with overpayments, including the possible introduction of a text alert service.”

Labour MP Alison Hume said: “Carers make incredible sacrifices to care for loved ones, but they can be left deep in debt, repaying carers allowance after unintentionally breaching the qualifying rules. Does my honourable friend agree that as a society we have a duty of care to carers?”

Sir Stephen replied: “We want to get to the bottom of what’s gone wrong with these overpayments, why so many people have been caught out.

“We have been piloting the introduction of a text message service, that involves texting 3,500 claimants to alert them when they HMRC informs DWP that the claimant has breached the current earnings limit.”