Repeated failures by Tory ministers and top welfare officials pushed hundreds of thousands of unpaid carers into debt and distress, and led to hundreds of millions of pounds of taxpayers’ money being wasted, a devastating review has concluded.
The independent review of carer’s allowance benefit overpayments identified “systemic issues” at the Department for Work and Pensions (DWP) and said carers could not be blamed for falling foul of unclear and confusing benefit rules.
The review was triggered after a Guardian investigation revealed how carers had been hit with draconian penalties of as much as £20,000 after unwittingly and unfairly running up overpayments of the carer’s allowance.
Liz Sayce, the disability rights expert and author of the review, said problems with carer’s allowance led to injustice and poor use of public money and had affected carers’ health, finances and careers. She blamed repeated failures by top DWP officials over a decade to fix the problems.
“Overpayments over many years at this scale and impact, with missed opportunities to resolve them, are entirely unacceptable. They are an inappropriate use of taxpayers’ money, which has involved using public money for a purpose not intended, and then incurring further cost to attempt to recover it,” she wrote.
She added: “The prevalence of overpayment related to earnings has been caused not by widespread individual error by carers in reporting their earnings but by systemic issues preventing them from fulfilling their responsibility to report.”
Ministers have announced hundreds of thousands of unpaid carers who ran up overpayments as a result of unsafe decisions will have their cases reassessed and in many cases their debts cancelled or reduced. It described the scandal as a “mess inherited from the previous government”.
But there is disappointment from many carers that the review did not recommend compensation for those whose lives were turned upside down and health destroyed after being hit with massive overpayments they were unaware they had incurred.
The review highlights the stress, shame and humiliation experienced by carers caught up in the system, and their treatment at the hands of DWP staff that “made them feel degraded, like a criminal or cheat trying to game the system”.
Sayce added: “This shame is experienced as the polar opposite of the recognition carer’s allowance aims to offer to unpaid carers who are regularly described by the government as ‘unsung heroes’.”
The review highlights how the flawed “cliff edge” design of carer’s allowance penalties resulted in carers rapidly and unwittingly building up big overpayments. Sayce urged “quick, imaginative and fair solutions” to the cliff edge problem.
Unpaid carers who look after loved ones for at least 35 hours a week are entitled to £83.30 a week carer’s allowance, as long as their weekly earnings from part-time jobs do not exceed £196. But if they exceed this limit, even by as little as 1p, they must repay that entire week’s carer’s allowance.
Under the “cliff edge” earnings rules, this means someone who oversteps the threshold by as little as 1p a week for a year must repay not 52p but £4,331.60, plus a £50 civil penalty.
Top officials and previous government ministers are criticised for a failure to “grip” the problem of overpayments. “The … DWP has failed to demonstrate the ministerial and senior focus needed to resolve these persistent injustices and reform carer’s allowance to implement its core purposes in the modern world,” the review said.
Problems with changes introduced by DWP in 2020 to modify the way carers were allowed to average their earnings from part-time jobs to avoid overpayments were also highlighted. These changes, ostensibly to make the system clear for claimants, were in effect unlawful and resulted in more carers falling foul of the system.
While carers were expected by DWP to report changes to their circumstances, such as if they earned more than earnings limits, confusing rules meant they “have no way of knowing exactly what they need to report and when”, the review found.
Sayce cited an unpaid carer who gave evidence to the review who described the predicament faced by carers trying to navigate the carer’s allowance system as “like playing a game where only one side knows the rules”.
She paid tribute to the “invaluable” role of carers, carer’s charities, DWP whistleblowers, and journalists in bringing what had become known as the carer’s allowance scandal to the policy forefront.
“I hope this report will lead to concerted, accountable action to resolve the persistent – and repeatedly reported – problem of overpayment of carer’s allowance,” she said.
