Warning for thousands of carers over ‘cliff edge’ rules that could land you with huge bill – how to avoid it

A WARNING has been issued to thousands of carers of rules that could land them with a huge benefits bill.

Fresh figures show 134,500 unpaid carers were repaying £251million in earnings-related overpayments last year.

Of these carers, 11,500 were told they owed £5,000 or more.

Carer's allowance is paid to those providing at least 35 hours of unpaid care a week, in most cases to disabled or sick relatives.

It is currently paid at a weekly rate of £81.90 and anyone on the benefit is allowed to have a second income from a job.

However, you can't earn more than £151 a week, or you lose all of your benefit allowance.

The Department for Work and Pensions (DWP), which pays the benefit, also looks to get any overpaid benefits back.

But in some cases DWP's systems don't flag earnings limit breaches for several years, seeing people overpaid massive sums which have to be repaid.

If you don't engage with the repayment process, you can even be taken to county court.

Carers are frequently being warned that this "cliff edge"; exists.

The latest figures from the DWP reveal that more than 100,000 unpaid carers were repaying around £251million last year in overpayments.

On top of this, according to The Guardian, the department has levied more than £5million in additional fines on thousands of carers in the past four years relating to earnings rule breaches.

These payments are made up of £420,000 from administrative penalty charges on top of existing fines.

Reportedly, 225 claimants have paid these since 2020 to prevent their cases from being passed to the CPS.

While, £4.8million of the sum was from more routine civil penalties of £50, which were levied on at least 98,000 carers deemed to have breached earnings rules over the same four-year period.

Carers Trust’s Director of Policy & Public Affairs, Dominic Carter said: "It's extremely frustrating that so many carers continue to suffer the consequences of an archaic Carer's Allowance system unfit for the present day.

"Carers shouldn't be made to feel like criminals, they should be recognised for the contribution they make to society and to the taxpayer.

"The DWP needs to get its house in order and overhaul this outdated system which seemingly sets carers up to fail, with its perverse rules on earnings and working hours."

Suzanne Bourne, head of carer support at Mobilise, agreed that carers are met with "admin sludge" and a system that’s often working against them.

She told Sun Money: “Over 10million people in the UK help care for a loved one or relative. These unpaid carers quietly and uncomplainingly get on with this important, challenging work every single day.

"Instead of being thanked and supported to claim the help they’re entitled to, they’re met with ‘admin sludge’ and a system that’s often working against them, not with them. 

“Claiming support such as Carer’s Allowance is complicated, slow and confusing. And we’re human - mistakes can happen when filling in the many pages of forms. And carer’s priorities are on their loved ones, with many struggling to keep on top of the exact details of their paperwork. Too often, these honest mistakes are being heavily penalised."

Suzanne also said that Mobilise believes it’s the DWP that needs to act to make things easier.

Back in May, the DWP announced new plans to help claimants avoid falling into this trap.

The department is now exploring the use of targeted text messages or emails to alert claimants and encourage them to make contact when the DWP is made aware of a potential overpayment.

This will reduce the risk of those customers being overpaid, according to the DWP.

However, the department hasn't set a date for when the changes could come into force.

Who has to repay?

In 2022-23, 26,700 carers were asked to repay sums relating to earnings breaches.

More than 800 were repaying sums between £5,000 and £20,000, and 36 were repaying more than £20,000.

There's no time limit on how far back the DWP can go to spot erroneous carer's allowance payments and demand money back.

Karina Moon, 62, is just one example of the thousands asked to repay the benefit.

The DWP told the single mother of one from North Wales that she must repay £11,292.75 of her carer's allowance or face fraud charges.

In another shocking case, a father who looks after his ill son had to sell his home to pay back £20,000 in carer's allowance.

George Henderson, 64, from Leyland in Lancashire was told he would have to repay the eye-watering sum due to a mistake he made when first applying for the benefit.

Henderson wrongly ticked a box saying he was unemployed, when in fact he was earning £7.50 an hour as a self-employed taxi driver.

However, the DWP failed to notify Henderson blaming it his responsibility to notify the department of any changes in circumstances.

How to avoid being caught out

If you breach the £151 earnings limit, you should try and proactively report it to the DWP as it is classed as a change in circumstances.

You can report any change in circumstances online via the government's website.

But you'll need your National Insurance (NI) number to hand, details of the person you're caring for and details of the change.

If you have been overpaid carer's allowance, you will have to pay it back in full or in instalments via the DWP Debt Management platform.

This is also on the Government's website.

If you don't do this, the DWP can take deductions from your work salary, or even pass your case on to a debt collector.

If you don't engage with the debt collector, it may then take your case to the county courts.

You can dispute an overpayment if you don't agree with it, but you'll need evidence as to why you claim not to have overpaid.

You can do this through what's known as a "mandatory reconsideration," which you can submit to the DWP online, by phone, or by letter.

The decision letter you receive from the DWP will contain the specific contact details to which you need to send correspondence.

Once the DWP has received your mandatory reconsideration, you will receive a "mandatory reconsideration notice" informing you whether it has changed its decision.

If you disagree with that outcome, you can appeal to the Social Security and Child Support Tribunal.

A judge will listen to both sides of the argument before making a decision.