Work and Pensions Committee

Overpayments of Carer's Allowance

Inquiry status: open

Scope of the inquiry

There are 6.5 million unpaid carers in the UK who make a hugely valuable contribution to society. Many carers will be entitled to Carer’s Allowance, but this Committee has previously reported on the “cliff edge” within this benefit; if someone earns just £1 over the earnings threshold, they lose 100% of their Carer’s Allowance. It has been reported that many carers are often not aware that a rise in their earnings has taken them over this threshold. This means that they could, inadvertently, continue to receive Carer’s Allowance when they are no longer eligible, resulting in an overpayment.

The DWP estimates that it overpays £160 million in Carer’s Allowance on an annual basis and is now looking to recover that money. This means that many carers could have to repay up to thousands of pounds, or even face more serious action; it has been reported that 1,000 carers could face prosecution and up to 10,000 may face fines.

The Committee is holding a one-off evidence session with Emily Holzhausen OBE, Director of Policy and Public Affairs at Carers, UK, to explore:

  • why the levels of overpayments in Carer’s Allowance are so high
  • how clear the rules around earnings for carers are
  • the impact that repaying overpayments has on carers

    Commenting on the one-off investigative session, Committee Member Ruth George MP said:

"Our health and social care systems would fall apart without the contribution of unpaid carers, who perform a selfless and invaluable role for at least 35 hours a week to qualify for the £64.80 carer’s allowance – that’s a maximum £1.85 an hour. When I worked with retail staff, we would often see someone get a small pay rise and inadvertently exceed the earnings threshold. It was bad enough when this was picked up at the end of the year and they had to find and pay back hundreds of pounds. When carers are only being informed of overpayments years later and potentially being taken to court for thousands of pounds, it is imperative for the Committee to look at the evidence and question whether Government is acting in the best interests not just of individuals, but of society and the wider economy."

Earlier this year the Committee conducted an inquiry into the support available for people with caring responsibilities to help them get into and stay in work – you can find all the information about that here:  Support for carers. 

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