Carers UK is campaigning to change the way that Carer's Allowance works for people who have earnings and receive Carer's Allowance, particularly trying to combat the problems with unpaid carers unwittingly going over the earnings limit and ending up with overpayments, some running into thousands of pounds a year.
Our work has taken a significant step forward with the announcement in the Autumn Budget that the earnings limit on Carer’s Allowance will increase to the equivalent of 16 hours at National Living Wage. This is an unprecedented increase and, with the rise of National Living Wage from £11.44 to £12.21 an hour from April 2025, will result in one of the biggest increases in the earnings limit since the benefit was created in 1976. From April 2025, working carers will be able to earn £196 per week without losing entitlement to Carer’s Allowance – an increase of around 30% from the previous earnings limit of £151. 60,000 more carers will be able to access Carer’s Allowance as a result and carers will be able to earn £2,340 per year more than before. For the first time in decades, the earnings threshold will also be pegged to National Living Wage increases, ensuring that the earnings limit goes up in proportion to the National Living Wage.
The Government has also announced an independent review, to be led by Liz Sayce OBE, which will investigate the reasons why overpayments have occurred for some carers and make recommendations for change. The review will focus on how and why overpayments were accrued, operational changes to minimise future overpayment risk and how the DWP can best support those with overpayments. Carers UK will be actively feeding into this review with our evidence and we will work to ensure that the review hears directly from carers affected.
Campaigning on this area is part of a three-year project looking at some of the challenges that carers in employment can face when claiming Carer’s Allowance. This project is funded by the Lloyds Bank Foundation and it aims to influence national policy and practice in relation to Carer’s Allowance and help make the social security system work better for unpaid carers. In particular, we are keen to influence change in the following areas:
-
the way in which the earnings threshold for Carer’s Allowance operates. Some carers face a harsh penalty when unintentionally going over the earnings threshold
-
the way in which carers interact with the Department for Work and Pensions when claiming Carer’s Allowance, particularly in relation to the earnings threshold
To underpin our campaign, Carers UK has conducted research to:
- examine the evidence and rationale for change, informed by carers’ lived experiences
- develop a stronger evidence base for campaigning on this issue
We are also working with carers and professionals to:
- improve information and advice for unpaid carers in relation to claiming Carer’s Allowance and combining it with paid work
- develop learning materials and increased awareness amongst local carer organisations on the earnings limit
Gathering our campaign evidence:
We’re continuing to gather carers’ experiences of overpayments in relation to earnings and Carer’s Allowance here. They can be submitted by carers and advisers can add cases anonymously. This provides important continuing evidence of why we need change to see a the system better meet carers’ needs.
Report on Carer’s Allowance overpayments
On 29 July 2024, Carers UK was pleased to meet with two Ministers, Rt Hon Sir Stephen Timms MP, Minister for Social Security and Disability and Andrew Western MP, Minister for Transformation at the Department for Work and Pensions (DWP) to share our new report on Carer's Allowance overpayments. Ministers heard first-hand from four unpaid carers with experiences of overpayments.
A Private Notice Question was raised in the House of Lords on the same day, where Peers from all sides of the House spoke about how important it was that this issue is resolved.
Campaign successes
In the Autumn Budget, Chancellor of the Exchequer Rachel Reeves MP, announced that the Government will raise the Carer’s Allowance Weekly Earnings Limit to the equivalent of 16 hours at the National Living Wage. The changes will support those receiving Carer’s Allowance, 70% of which are women, to start work or work more hours. This is an increase of £45 per week and will allow 60,000 more carers to access Carer’s Allowance.
The Government has also announced that an independent review into the Carer’s Allowance overpayments scandal, investigating why overpayments occurred and how to minimise risk in the future.
The Liberal Democrats chose Carer's Allowance overpayments as one of their Opposition Day debates which you can read here, including contributions from Members of Parliament from across the House and more detailed Government responses.
On 6 March 2024, Carers UK gave oral evidence to the Work and Pensions Committee on their session covering Carer’s Allowance where we raised the issue of overpayments. The Committee Chair’s letter to the DWP recommended:
“We remain concerned … that progress has not been made since our predecessor’s 2019 report [on overpayments]. DWP must undertake work to improve how it identifies and communicates overpayments with claimants. For example, DWP should send a communication to carers whenever the VEP system identifies that they are suspected of having exceeded the earnings limit—even if this might include allowable deductions… it is imperative that these changes are introduced without delay and without a lengthy process of trials.”
“DWP should set out to us how it defines “gainful employment” in the context of Carer’s Allowance. The Government should commit to introducing a taper rate to Carer’s Allowance when work on its IT system allows. This should include work to explore what impact different taper rates would have on earnings and work incentives for those in receipt of Carer’s Allowance.”
Following media interest in overpayments, Government published its plans to explore the use of text messages and targeted communications to carers who might have gone over the earnings limit, using HMRC data already available to DWP. However, no timeline has been announced for implementation. DWP also published its research on Carer’s Allowance after a delay of several years.
Media
Carers UK has been working with a variety of journalists to raise awareness of the issue of Carer’s Allowance overpayments. Carers UK and unpaid carers have been featured on several programmes covering the story in recent months, including Good Morning Britain, Money Box live and BBC Breakfast. We have also been featured in the Guardian, local radio stations and regional news outlets.
Carers UK also issued a number of comments about Carer’s Allowance overpayments:
Carers UK welcomes Carers Allowance earnings threshold increase in Autumn Budget, 30 October 2024
Carers UK responds to government plans to commission an independent review of Carer's Allowance overpayments, 16 October 2024
Carers UK to present Carer’s Allowance overpayments report to Minister detailing the experiences of unpaid carers, 29 July 2024
Carers UK respond to NAO letter to Work and Pensions Select Committee re Carers Allowance overpayments, 22 May 2024
Carers UK reaction to DWP research and Work and Pensions Select Committee recommendations on Carer’s Allowance, 16 May 2024
Carers UK reaction to DWP plans to text carers at risk of overpayments, 15 May 2024
Carers UK responds to Work and Pensions Committee discussion on Carer's Allowance, 24 April 2024
Support for Carers UK's Carer's Allowance overpayments campaign, 13 April 2024
Carers UK responds to news reports of Carer's Allowance overpayments case, 11 April 2024
Read our report on Carer's Allowance overpayments.
