The DWP has profited by almost £5 million in the last four years by fining unpaid carers £50 each when they are found to have been overpaid. This is in addition to £400,000 in penalties paid by carers to avoid facing prosecution. Carers who consider appealing are threatened with even higher bills if they do so. Yet, in over half the cases where the DWP is warned by an HRMC system that carers are over the earnings limit, the DWP chooses to ignore the warning and let the overpayments increase. The level of DWP dirty tricks could reasonably be described as a war on carers and has echoes of the Post Office scandal.
One fifth of all carers who work part-time have been found to be overpaid because the rules around earnings are so complex and because the earnings limit was frozen for years, not keeping pace with inflation.
Last year alone, 34,000 claimants were found to have been overpaid, with 1,000 of those owing between £,5000 and £10,000.
As a result of the widespread overpayments, almost 100,000 carers have been subject to the £50 civil penalties between 2020/21 and 2023/24, according to a written Commons answer. The penalties are in addition to repaying the full amount of carers allowance paid in the overpayment period.
This amounts to a profit of almost £5 million from fines imposed by the DWP without any court being involved.
In the same period 225 carers have been forced to pay an ‘administrative penalty’ averaging £1,850 per carer, with the threat that if they do not pay they will be prosecuted for fraud. The penalties amounted to £417,000 in profits from carers for the DWP. Again, this is in addition to repaying the overpayment and again, no court was involved in levying the fines.
The DWP also resorts to dirty tactics, threatening carers who consider appealing against an overpayment decision that they will end up having to pay back more if they do so.
The Guardian has highlighted the case of a woman who cares for her husband who has dementia and Parkinson’s. The claimant had mistakenly calculated her earnings on a monthly basis rather than four weekly and was ordered to repay £4,000 as a result. The DWP warned her in writing that if she appealed the overpayment “the entire claim from the date it started will be looked at, which could potentially result in the overpayment increasing, if there are more periods where your earnings exceeded the allowable limits”.
HMRC have an automated system which informs the DWP when a carer’s earnings may have breached the limit, allowing the DWP to contact the carer and ensure a large overpayment does not build up. Five years ago the DWP promised MPs that, because of this system, the number of large overpayments of carers allowance would cease to be a problem and so MPs did not need to concern themselves.
Yet between 2020/21 and 2023/24 the DWP received 343,000 alerts and only contacted 169,000 claimants leaving the other 174,000 claimants with the risk of having to repay massive overpayments.
Three former secretaries of state for work and pensions have called on the government to pause investigations into overpayments of carers allowance, the Guardian has revealed. The Labour Party has said it will review the system of carer’s allowance payments if it wins power.
