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Carer's Allowance: Carer told to repay £20,000 'felt like a criminal' – why we're still pushing for change as Government announces review

Elderly person's hands being held by someone else.
Molly Greeves
Molly Greeves
News & Investigations Reporter
22 October 2024

A carer paying back nearly £20,000 in Carer's Allowance after going over the earnings limit without realising told MoneySavingExpert.com the experience has left her "devastated".

The Government has announced an independent review of nightmares like this that have impacted 100,000s of carers. Yet it doesn't address the core problem, the fact the benefit has a cliff-edge, and Martin included a call for that to be changed in his letter to the Chancellor earlier this year. Here's an extract:

Martin Lewis
Martin Lewis
MSE founder & chair

Unpaid carers are unsung national heroes who save the economy and the NHS billions and provide a national wellbeing boost. Carer's Allowance is a not particularly generous benefit that those on very low incomes, who care for people in need for over 35 hours a week, can get.

Yet its structure is broken, old-fashioned, unjust and in need of urgent change. Earn £151 a week or less, and those eligible can claim the £81.90 per week allowance. Yet, earn a penny more – £151.01 – and they get nothing. This is perverse – most benefits, including Universal Credit, have a taper, so if you go over the threshold, the payment received is gradually reduced. Carer's Allowance only has a cliff-edge, leaving many to plummet off.

Worse, the system seemingly sets people up to slip over the threshold unwittingly. Many on Carer's Allowance need to restrict any working hours to avoid hitting it (a strange disincentive to work), yet if their wage increases slightly, eg, when the annual minimum wage increases, they can fractionally bust the threshold. If that happens, the terrible disconnectedness and poor benefits systems mean they're often still paid the allowance for months, or even years. Then, even though they may have only earned a pound or two more, they're later asked for unaffordable £100s or £1,000s back.

I'd ask you to look at ending the cliff-edge going forward, and retrospectively for those carers who are facing requests for crippling back-payments – adding to the burden many are already faced with. The system is fundamentally unjust, and hits many of society's most venerable and vulnerable.

The Government's review will look at how and why overpayments happened, changes to minimise the future risk, and how the Department for Work and Pensions (DWP) can best support those affected – though we don't yet know how long this will take. And crucially, it seems to be focused on overpayments rather than the root problem itself.

If you're claiming Carer's Allowance, it's crucial to check your earnings are under the limit and report any changes to the DWP straightaway – see our step-by-step guidance below.

Carer repaying nearly £20,000: 'I felt like a criminal'

An image of the hands of two people who are holding hands.

Heather Aylesbury, 56, is the main carer for her 91-year-old mother who suffers from peripheral neuropathy, a condition which has caused her to lose feeling in both of her legs. She started claiming Carer's Allowance in 2012.

For seven years Heather continued as normal, working as a high-school librarian and caring for her mother and her two children. But in late 2019, the DWP arranged for a local government officer to visit and tell her she had been overpaid Carer's Allowance by £19,543.95. Worst of all, she would need to pay this back.

"I nearly fell through the floor," Heather told us. "At the time, I wasn't earning enough to cover the bills, the mortgage, the kids' outgoings. I found it so traumatic, I was at my wits' end."

As it turned out, Heather had been receiving yearly pay rises at her job without realising it would take her over the earnings limit.

"I do understand that it was my responsibility to make sure I was under the limit," she said. "But it didn't cross my mind. I was in the same role, in the same job, working the same number of hours. I was still caring for mum, more so than I was before. So I never had a reason to question it, nor did I have the time or the energy to."

'I don't understand how carers are supposed to juggle everything'

The guilt and stress Heather felt about the debt took a serious toll on her mental health, and she says she was prescribed medication for anxiety.

"I felt like ending it all," she said. "I was so devastated, I felt like a criminal. There are people in a worse position than me because I've got a very supportive family and amazing friends that rallied behind me, so I was able to get through it."

Eventually, Heather left her job at the high school and took on a new role as a co-ordinator for a community centre, where she says it's easier to ensure she stays safely under the earnings limit. She's still paying back the debt from her overpayment.

"I don't understand how people are expected to keep changing jobs, juggling life and doing the caring. It's full on, and I wouldn't change it for the world because it's what mum wants, but it's emotionally draining. And then to be made to feel like a convict for doing your best, it's shocking."

Claiming Carer's Allowance? Here's how to check your earnings and report changes

If you receive Carer's Allowance, check your earnings NOW to make sure you're not over the limit – especially if your earnings fluctuate or you've received a pay rise. The longer you receive the benefit when you're not entitled to it, the more you might end up having to pay back.

Here's what you need to do:

  1. Make sure you understand the earnings limit. This is currently £151 a week AFTER you take off the following:

    - Income Tax.
    - National Insurance.
    - 50% of any pension contributions you make (though if it's a private pension, you'll need to discuss this with the Carer's Allowance Unit if you're in England, Scotland or Wales or the Disability and Carers Service in Northern Ireland).
    - Certain business expenses you pay for if you're self-employed (see charity Carers UK for more info on what counts).

    For someone aged 21 or older on minimum wage, the limit is roughly equivalent to what you'd be paid for around 13 hours of work a week.

  2. Check what you take home each week. Start by looking at any payslips you've received. If you're paid monthly, you can work out how much you're paid each week by taking what you've earned (after any deductions as set out above), multiplying it by 12 and then dividing it by 52.

    If your earnings go above the limit, you'll lose your entitlement to your next Carer's Allowance payment – even if this was a one-off from, say, working an extra shift or receiving a bonus. So make sure you recheck that you're under the limit every time your earnings increase.

    If what you earn fluctuates, you may be able to have your earnings averaged out so you can still get Carer's Allowance. For help with this, contact the Carer's Allowance Unit in England, Scotland and Wales or the Disability and Carers Service in Northern Ireland.

  3. If you've gone even a penny over the limit, let the DWP know straightaway. For England, Scotland and Wales, you can do this online via Gov.uk or by phone or post. For Northern Ireland, see NI Direct.

    You also need to report it if you go on holiday or if the person you care for goes into hospital – see Gov.uk and NI Direct for more info.

  4. Struggling to work out if you're within the limit or need more help? Contact Carers UK for further support. You can do this by calling 0808 808 7777 between Monday and Friday from 9am to 6pm, or via email.

    If you can't afford to repay any overpayments, you can contact DWP Debt Management in England, Scotland or Wales or Debt Management Northern Ireland to talk through your options. Depending on your financial circumstances, you may see the rate of repayment reduced or temporarily suspended.

If your mental health has suffered due to debt, see our Mental Health and Debt booklet to find out how you can get support.

What does the Government say?

A spokesperson for the DWP said: "We recognise the challenges carers are facing and we are determined to provide unpaid carers with the support they need and deserve.

"This is why we have launched a review into Carer's Allowance overpayments to get to the bottom of how overpayments have occurred and to prevent people who devote such time and care to others from facing similar difficulties in future."

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Carer's Allowance overpayments: why we're still pushing for change

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