Penalties for unpaid carers in benefits scandal must be halted, says Ed Davey | Society

Fines imposed on thousands of unpaid carers who breach discredited carer’s allowance benefit rules should be suspended until the government fixes the system, Liberal Democrat leader Ed Davey said.

An investigation by the Guardian last year found that hundreds of thousands of unpaid carers were left with huge debts and in some cases prosecuted for fraud after being unwittingly trapped by chronic failures in the design and management of benefits.

Although the government promised to reform carer’s pay a year ago, impatience is growing among campaigners over the lack of progress and there are fears hundreds of unpaid carers will face new repayment claims every week.

“It cannot be right that the government is still chasing carers’ back pay so long after this scandal has been exposed, and even after securing an independent review, but before anything has been done to put things right,” Davey said.

An independent inquiry into carer’s pay was ordered by the government in December, chaired by disability policy expert Liz Sayce. Sayce presented his findings to ministers three months ago but it is unclear when the government will publish its report or official response.

“The government needs to stop repayments now, publish the findings of the review without further delay and start fixing the system so it actually works for carers,” Davey said.

Liberal Democrat change The government’s fraud and error bill, which will be debated in the Lords next week, calls on the Department for Work and Pensions (DWP) to stop tracking carers’ repayments until the government’s plans to reform benefits are implemented.

Lord Palmer, the Liberal Democrat work and pensions spokesman in the House of Lords, who introduced the amendment, said it was wrong that unpaid carers continued to be unfairly punished by a system that was clearly not working. He described the carers’ allowance scandal as a “national disgrace”.

At least 144,000 carers are currently paying back more than £251 million in carer’s allowance overpayments; usually between £2,000 and £5,000, but sometimes up to £20,000. These draconian penalties are imposed when part-time carers breach earnings limits, which are added to the £82.30 weekly benefit.

This “cliff edge” penalty means that if carers breach earnings limits, even by very small amounts, the full benefit must be repaid. A carer who receives 50p more than the £196 per week threshold for 52 weeks will pay back £4,258.80, not £26.

The impact was exacerbated by the DWP’s routine failure to investigate all electronic notices it had received over many years, alerting them to potential earnings breaches. This has led to carer’s allowance claimants unknowingly accumulating overpayments over several years.

Campaigners have repeatedly called for carer’s allowance overpayments to be written off, given the previous government’s chronic failures to address problems they were warned about years ago internally through a DWP whistleblower and externally after the problems were raised by MPs.

Emily Holzhausen, director of policy and public affairs at Carers UK, said: “It is critical that we see the independent review published very quickly, with a clear timeline for action to ensure this scandal is addressed head on. Day after day, unpaid carers are still exposed to overpayment claims that operate under a system that everyone recognizes is broken.”

He added: “Given the devastating impact this could have on unpaid carers who unknowingly exceed the earnings limit, it is crucial that we make this change as soon as possible to prevent more carers being put in such a dire situation.”

A DWP spokesman said: “We stand with carers. That’s why we commissioned an independent review into carer’s allowance overpayments and delivered the biggest ever cash increase in the benefit’s earnings threshold – helping 60,000 carers by 2029-30.”

“We will respond to the independent review in due course and, in the meantime, we need to balance our duties to taxpayers while ensuring that carer’s allowance is administered fairly, properly and best supports those who use it.”