Many people receiving benefits from the Department for Work and Pensions (DWP) have received unexpected bills, with some debts amounting to £20,000. As of May 2024, approximately 134,800 individuals owe money to the DWP because of overpayments of Carer’s Allowance.
Contents
- DWP Issues Alert, Massive Surprise Debts of £4,000
- Carer’s Allowance Earnings Limit
- Reasons for Exceeding the Earnings Limit
- Effect on Other Benefits
- Long-Term Financial Challenges
- Unexpected Halts in Carer’s Allowance
- DWP’s Threatening Letters
- Advocacy for Increased Allowance
- Government’s Response
- Government’s Plan
- Summary
- Related posts:
DWP Issues Alert, Massive Surprise Debts of £4,000
A report by Carers UK sheds light on this issue, showing that surveyed carers owe between £150 and £20,000, with the average debt being £4,000. About 70% of these overpayments occur because carers surpass the earnings limit for the benefit, often due to misunderstanding the rules.
Carer’s Allowance Earnings Limit
To be eligible for Carer’s Allowance, a person’s income must not exceed £151 per week after deductions for tax, National Insurance, and expenses. If the income exceeds this limit, the full benefit must be repaid, currently £81.90 per week or £4,258.80 annually.
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Reasons for Exceeding the Earnings Limit
Several factors can lead to carers exceeding the earnings limit, including:
- Fluctuating earnings
- Pay increases
- Employer errors, such as late payments
Effect on Other Benefits
When individuals are required to repay overpayments, they may also face reductions in other benefits. Someone reported a monthly reduction of £200 in their Personal Independence Payment (PIP) as a result of repaying overpayments.
Long-Term Financial Challenges
The report indicates that many carers take years to settle their debt, with some still repaying it. The stress and fear of additional overpayments have caused some to quit their jobs, leading to reduced income while still needing to repay the debt.
Unexpected Halts in Carer’s Allowance
Some carers experienced a sudden stop in their Carer’s Allowance without warning, which led to severe financial challenges. This is on top of their unpaid caregiving duties for elderly, ill, or disabled family members. Carer’s Allowance aids those who care for at least 35 hours a week for people receiving specific benefits like PIP or Attendance Allowance.
DWP’s Threatening Letters
One carer described receiving ‘threatening’ letters from the DWP regarding repayments. They reported feeling constantly at risk from debt collectors and potential court actions.
Advocacy for Increased Allowance
Carers UK is campaigning to increase Carer’s Allowance by at least £11.10 per week and adjust the earnings threshold to correspond to 21 hours per week at the National Living Wage. This would raise the earnings limit to:
- £180.60 per week for claimants aged 18 to 20
- £240.24 per week for claimants aged 21 and over
Government’s Response
In Parliament, Lord Bishop Christopher Chessun raised questions regarding the report. Baroness Maeve Sherlock responded by expressing the Government’s appreciation for the report and stated that they are currently assessing its findings. Additionally, key ministers have engaged with Carers UK and individual caregivers to address the concerns outlined in the report.
Government’s Plan
The government is currently taking prompt action to fully understand and address the challenges associated with overpayments of Carer’s Allowance. Their goal is to thoroughly investigate the issues and implement effective solutions.
Summary
Issue |
Details |
|---|---|
Number of Claimants Affected |
134,800 |
Debt Range |
£150 – £20,000 |
Average Debt |
£4,000 |
Earnings Limit |
£151 per week |
Benefit Amount |
£81.90 per week |
Advocated Increase |
£11.10 per week |
New Earnings Limit |
£180.60 (18-20 years), £240.24 (21+ years) |
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