Why the Government should halt and write off the demands for carer’s allowance overpayments - Jayne Dowle
All power to Lib Dem leader Ed Davey, who is calling for a suspension of severe financial penalties for the hundreds of thousands of carers who fall foul of strict rules on carers’ allowance and find themselves punished.
Davey, a well-known champion for carers, is right to do so. Unlike many politicians who pontificate about the vital service carers provide for family and friends, he knows first-hand what it’s like.
As a child, Davey looked after his mother when she fell ill with cancer – his father had already died, when Davey was four - and is now a carer for his teenage son John, who has an undiagnosed neurological condition that causes severe physical and learning disabilities.
In May this year, Davey’s deeply moving autobiographical book, Why I Care: And Why Care Matters called for much more understanding of the plight of carers.
The scandal surrounding carers allowance came to light last year following an investigation by a national newspaper. It revealed that hundreds of thousands of unpaid carers had been landed with huge debts, and in some cases prosecuted for fraud, after being inadvertently trapped by failures in the benefit’s design and administration.
It's reported that the Department of Work and Pensions (DWP) has failed to investigate all the electronic notifications it receives alerting potential earnings breaches. This has resulted in carer’s allowance claimants unknowingly accumulating overpayments over several years.
As it stands, individuals who spend at least 35 hours a week caring for someone with an illness or disability, but who does not earn more than £196 per week, after certain deductions including tax, national insurance and certain expenses, may be eligible to claim the £82.30 a week carer’s allowance.
However, if an earner breaches the modest £196 earnings limit by even a tiny amount, they must pay back the entire benefit; so for instance, a carer who received 50p more than the £196 weekly threshold for 52 weeks would pay back not £26 but £4,258.80.
Affected carers say that typically, going over the £196 limit has happened due to circumstances beyond their control, such as a pay-rise they hadn’t accounted for, or a slight change in shift patterns attracting a premium.
It is reported that at least 144,000 carers are now repaying more than £251m in carer’s allowance overpayments, typically between £2,000 and £5,000, but sometimes as high as £20,000.
You can only imagine how terrifying these debts will feel to people who are already on such a low income; their lives will already be financially and emotionally precarious.
When you consider the eye-watering levels of benefit fraud in the UK going unchecked, it is unfair to target people, trying their best, often in extremely testing circumstances, who have innocently made mistakes.
In its report last year, the DWP said that £7.4bn, that’s 2.8 per cent of its £268bn total benefits outlay (which includes around £160bn on pensions, less susceptible to gaming the system), was lost to fraud.
How many of these fraudsters will never be held to account? They may go underground, change their identity, or even flee the country, leaving behind a massive hole in public money.
That doesn’t even touch the ranks of those erroneously claiming Universal Credit and deciding not to work at all, or those faking disabilities and life-limiting illnesses to secure eligibility for Motability vehicles.
Yet carers, who are also going out and earning wages, have been singled out. It does not seem fair, or just.
The government ordered an independent inquiry into carer’s allowance, headed by the disability policy expert Liz Sayce, in December last year. Sayce presented its findings to ministers three months ago but there is no news on when the government will publish her report or its formal response.
And meanwhile, carers are still being hounded for every last penny. “It cannot be right that the government is still hounding carers for repayments, long after this scandal was exposed, and even after we secured an independent review, but before anything has been done to put things right,” says Davey.
The Lib Dems, led by a man who knows only too well the challenges carers face, are absolutely right to be so vociferous. There is only one response any government which purports to care for carers should make, and that is to call a halt and write off the demands for carer’s allowance overpayments. And then buckle down and reform the system, so innocent people doing their best are never punished again.