Carers UK regularly receives contact from concerned carers who have received a notice about overpayments. They often contact us before they have sought more in-depth advice.

Background:

The Committee’s Inquiry into the overpayment of Carer’s Allowance has gathered some information regarding the levels, figures, etc.  The purpose of this evidence is to submit the experience of carers as they present their concerns/advice queries to Carer’s UK.    We also present our views on the information provided to carers regarding the earnings limit and changes of circumstances.

Most carers tell Carers UK’s information and advice services, that they have made an honest mistake and we have set out a few reasons below for this.

Carers UK also recognises that reasons for overpayments may vary including someone not caring for the disabled person, studying more than 21 hours per week (deemed full time education), earnings or another reason.  This evidence focuses only on earnings overpayments. 

Carers’ lived experience:

The cases that Carers UK tends to hear about tend to be about overpayments – which have started around £400.   Most are over £1,000 close to the average stated by the DWP, but some are higher and there was one very large example around £10,000, but that is unusual.   Carers UK does not provide a case work service and after giving detailed responses, we signpost carers to locally appropriate case work services in Citizen’s Advice, welfare rights or other appropriate organisations locally.

• A carer looking after someone who is severely disabled knew they would be earning more for a couple of months running and dutifully contacted the DWP to report changes of circumstances. They then received a notice about overpayments which came as a total shock and surprise.  They had not realised that they were around only several £ over the threshold for nearly a year.  They are paying this back over 18 months all the while they are a reduced income – effectively nearly cancelling out the current income from Carer’s Allowance.
• Another carer looking after their disabled child used to be on a standard part-time job with regular hours and had proved, through pay slips that they were under the earnings limit. After a period of no work, they moved onto a zero hours contract with more irregular earnings and as a result of oversight, didn’t notify the DWP.  After contact with the compliance section of the DWP, they provided all the information but have no idea whether they are over the limit because of fluctuating earnings.
• A carer who was self-employed has fluctuating earnings and again, was not sure how to average out earnings and had made a mistake.
• A carer who was registered as self-employed did not realise that they needed to include that work as part of changes of circumstances and report earnings to the DWP.  They received a demand including notice of a potential prosecution and the administrative penalty takes this to nearly £5,000. Their comments clearly show that this process is extremely stressful not just in the process of the overpayment, but also having to pay the money back.
• Another carer said, “There is a very strong possibility that I have been overpaid Carer’s Allowance for almost three years.  As you can imagine I feel sick to the pit of my stomach.  I did not realise that it was “means-tested”.   I thought because I’d had contact and had updated the DWP when I was moving from Income Support into work that they’d know.”  This problem arose because the carer didn’t realise that she had to inform the Carer’s Allowance unit.
• A former carer said that they had received a notice that they had been overpaid for several years. They are now paying back the overpayments even though they are no longer caring, and will continue for several years as it has been set at what the carer can afford.  They were very much in distress as it was also accompanied by court letters.
• A carer told Carers UK that their Carer’s Allowance payments stopped as a carer had not told the DWP of around £70 in weekly earnings until all payslips over the past two years had been submitted. Whilst this prevents the build-up of more overpayments in the longer term, it has the short term effect of being problematic income-wise for carers.
• A carer was told of an overpayment (receiving Carer Element as part of Universal Credit) but was not told what the overpayment was for and had contacted Carers UK asking how it might be worked out and why.  In these situations, we would advise a system that clearly identified to the carer the reason for the overpayment.  This is important capacity building to help carers understand the system better so that they avoid mistakes in the future.

DWP does tell carers about earnings being a change of circumstance:

The initial Award letter sent by paper to all claimants includes information in the appendix towards the bottom of the page (page 4 of the letter) within a long list of “important changes you must tell us about”.   This states, “you start work as an employed or self-employed person, either full-time or part-time, temporary or casual, whatever your earnings”.  We understand from the DWP that this is repeated in the annual upratings letter.

The language on the website refers to “report a change in circumstances” .

However, carers say they make mistakes because:

• Carers say that they don’t always realise or remember about earnings and that it constitutes a change in circumstance.
• Letters from the DWP are fairly long and fully of complex information, so earnings can be missed in the very detailed, closely written pages.  The earnings threshold does not appear in the Award letter, so there are no further “prompts” as to earnings thresholds – or any prompt as to what happens if the earnings threshold is exceeded.
• Carers have also said that they meant to read the letters, but because they were long, didn’t have time, were tired from caring and other responsibilities and were put aside for when they had time.
• Carers are not always sure how to work out earnings translating from monthly income, or spreading out uneven earnings.  There are no tools to help them do this and decision-making can be complex.
• Carers find the information on deductions difficult to find and not straightforward to work out. There are no worked examples on gov.uk – something that the Select Committee has suggested there could be in their last Inquiry on carers.
• One carer said that as work paid earnings straight into the bank account monthly, they didn’t notice that their wages went up by a few £ per month, and that took it them over the threshold. They only found out when they received a notice.
• Tracking earnings can be more complicated for some, particularly those who are self-employed.
• The averaging of earnings rules are important, but can be difficult to understand and it is not easy for carers to predict how this works.

The caring situations vary including caring for parents, partners and children.  Often they have other responsibilities caring for other children or even other family members who also have disabilities.

Most the queries relate to carers who were already claiming Carer’s Allowance but had started work whilst claiming, although there were some cases of people who were working prior to claiming and had made errors during that claims process.

Carers and working:

Those carers who are able to have a small part-time job alongside caring greatly value the ability to do so, for the additional income that it brings, the foothold in the labour market which they know can so easily be lost and skills outdated, and the change that is brings alongside caring.  Our objective is to ensure that carers are able to juggle some work with caring. 

Solutions:

Quicker information from Government systems alerting carers to the fact that they may have made a mistake is welcome, and we hope that the new systems will ensure that these are picked up earlier. 

Information provided to carers should be reviewed and modernised and Carers UK has suggested that letters could be emailed as well as posted.   Carers UK would be happy to work with the DWP about how this could the changed.   When the DWP changed to a revamped version of the online benefit – the first of  its kind – it dramatically improved customer experience, satisfaction and use increased significantly.

A journal for Carer’s Allowance recipients?  Carers UK has suggested to the DWP that there could be some kind of tracking record for both carers and the DWP so that they can a log of their earnings and other important factors and changes of circumstances. This might help to align the systems for Universal Credit and Carer’s Allowance.

Payment cycles – Carer’s Allowance is normally paid weekly unless they request it can be paid four weekly.  Weekly payments are sometimes out of step with how most people are paid, but we do not know carers’ preferences and the potential impact this would have moving to monthly payments (which is different to four weekly payments).  

Structural changes to Carer’s Allowance, such as the earnings limit and the taper for Carer’s Allowance set out below.

Better off under Universal Credit? Carer’s UK is currently running a number of different scenarios to see who is better off or worse off under Universal Credit with earnings.

Structural Solutions: Carer’s Allowance and a taper to soften the earnings threshold – bringing closer alignment to Universal Credit

Carers UK has always welcomed the fact that carers are able to have some limited earnings with Carer’s Allowance.   However, the fact that a carer can go even £1 over the earnings threshold, means they lose 100% of their Carer’s Allowance as a benefit.  This is the most severe withdrawal rate in the benefits system.

Carers UK has argued for many years that there needs to be a taper on Carer’s Allowance to soften this effect and to allow carers to move in and out of work and have fluctuating earnings – reflecting the different nature of caring, as well as the new world of work.

Carer’s UK is starting to run a number of different scenarios to test whether someone is better off or worse off under UC if they have earnings and are a carer.   With one simple example, Sarah has some Housing Benefit, is a carer in receipt of Carer’s Allowance but earns £125 that week i.e. £5 over the earnings threshold. She is £14.58 worse off than if she had stayed under the earnings threshold. In the same scenario, Sarah would be £46.38 a week under Universal Credit, because although she loses Carer’s Allowance, she retains the Carer Element and it is tapered.   

Carers UK is cautious about this particular area until we have explored different scenarios.  Not all carers will automatically move over to Universal Credit in the future and the reduced pace of change of Universal Credit roll out, this will affect how many carers can benefit from this measure. 

Recommendation:  That Carer’s Allowance is tapered similar to UC so that there is new alignment into the Universal Credit system. The objective would be to ensure that “work paid”.

Solutions: Carer’s Allowance, earnings threshold and the National Living Wage of 16 hours of work

Carers UK welcomes the rises in the National Living Wage.  The earnings limit for Carer’s Allowance has also risen faster than average wages, which Carers UK recognises as positive, helping those on the lowest incomes.

When the National Living Wage rises faster than average wages, it reduces the number of hours that carers can work and still receive Carer’s Allowance, if the two are out of synch.  It also does not work with the 16 hour work threshold for tax credits as all relevant carers with earnings will be under the hours limit.

In the past two years, the number of hours that a carer over the age of 25 and in receipt of the National Living Wage can work and still receive Carer’s Allowance has fallen from 15.3 hours in 2018 and to its lowest level of 14.9 hours per week in April 2019.   For those needing to receive tax credits, the hours threshold starts at 16 hours.  This does not match, therefore, and it would be advantageous to ensure that the systems aligned.

We have welcomed the Government’s rise in the earnings limit.   Had the Government not done so over the past few years, the number of hours it is possible to work would have dropped even further.  For this reason, changes to the earnings threshold have been important as the amount of work possible for carers would have fallen consistently year by year.

Recommendation:   That Government increases the earnings limit in line with the National Living Wage equivalent to 16 hours and continues to rise annually to allow carers on the lowest incomes to benefit from the changes that others have.

Solutions: Tracking and reporting

It can be very difficult for some carers to track earnings/changes in circumstances which many also be frequent.  Carers UK has proposed to the DWP that there could be a journal.   This would also help carers to keep up to date.  This could be offered as an option.  Because carers are very time-poor, they would not always be able to go into the Jobcentre to access journals online or to go to the library for the very reasons why they are getting the benefit and working.   This cannot be the only solution and we need to keep existing mechanisms.

Solutions: Review of information provided to carers

Carers UK believes that there could be a review of the information provided to carers about earnings in particular, everything from the information on gov.uk to help understanding of how earnings might work, to clearer differently designed letters to DWP clients, which are also provided by email.  

Minister’s response regarding data

Carers UK has welcomes the Minister’s response to the debate on overpayments, that the Government is reviewing the data that they currently have on the levels of fraud and error on Carer’s Allowance as current estimates are based on a study carried out over 20 years ago in 20016/17.   This should provide better information.

We also welcome the Minister’s (Justin Tomlinson’s) comments in debate with regard to the information and the letter. 

November 2018