Carer's Allowance overhaul needed to prevent 1,000s being chased for overpayments, says charity

MSE_Molly_G

Demands to repay Carer's Allowance overpayments are having a "shocking" impact on unpaid carers' lives, according to a new report from Carers UK. The charity has called for urgent action to prevent carers from unwittingly building up huge debts – an issue MoneySavingExpert.com (MSE) founder Martin Lewis has also raised with the Government. 

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Carer's Allowance overhaul urgently needed to prevent 1,000s being chased for overpayments, says charity

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Muttleythefrog

I struggle to understand how someone can unwittingly build up tens of thousands in overpayment rather like someone accidentally falling through open cellar trap doors of 3 different pubs in the same afternoon.

Perhaps they should look at whether it would actually cost less to run the system if the earnings threshold was removed completely (and include the anticipated extra taxes raised from those who then work or work more)..  tapering it may be fairer but it doesn't sound easy to administrate which is perhaps the problem at the heart of the current one... it'd just make it worse.

HillStreetBlues

After just screwing 10 millions pensioners, I don't think writing off monies owe will be high on the agenda.

born_again

Or limit the number of hours that can be worked. Given the criteria for carers allowance. I agree the running up a large back payment is not something that should happen. But guess that people fail to act on the warning given when given carers allowance about the amount you can earn, and blindly think that it will be automatically adjusted for them over earning.
As would be said a lack of personal responsibility in some cases.

But given the announcement on winter fuel allowance today. Mmm

Savvy_Sue

born_again said:

Or limit the number of hours that can be worked. Given the criteria for carers allowance. I agree the running up a large back payment is not something that should happen. But guess that people fail to act on the warning given when given carers allowance about the amount you can earn, and blindly think that it will be automatically adjusted for them over earning.
As would be said a lack of personal responsibility in some cases.

But given the announcement on winter fuel allowance today. Mmm

Building up a large overpayment is definitely not something which should happen, because HMRC's RTI system has been able to inform DWP's systems for some time. And people are told that DWP will be told about their earnings. So you kind of naively assume (I know, I know) that DWP will tell you promptly if you earn too much in any period. But they don't: it's allowed to build up for years. 

I've read about several cases, and not a single one has indicated any lack of personal responsibility. Claimants are given wrong information, misled, and then heavily penalised. 

Frogletina

Muttleythefrog said:

I struggle to understand how someone can unwittingly build up tens of thousands in overpayment rather like someone accidentally falling through open cellar trap doors of 3 different pubs in the same afternoon.

Perhaps they should look at whether it would actually cost less to run the system if the earnings threshold was removed completely (and include the anticipated extra taxes raised from those who then work or work more)..  tapering it may be fairer but it doesn't sound easy to administrate which is perhaps the problem at the heart of the current one... it'd just make it worse.

Hi Muttley

My daughter gets carers allowance and whenever her earnings go up she puts a little bit extra in her pension, as half of this is disregarded, but it takes a while to do and in the meantime her carers allowance stops. It can take quite a while for the pension to get sorted - she only needs to put a few pounds extra in but getting the carers money back is no mean feat. It can take months, and during that time her income is much reduced.

She has friends who also claim carers allowance who don't do this even though she has advised them - one is doing the same job as her and earns the same, but has been earning over the limit for 2 years. My daughter has told her that it will catch up with her but so far she's not listened.

The extra pension my daughter will get will not amount to much but keeping the carers money is worth it. When she retires there will be no pension credit, so she won't lose that through having a small private pension as some pensioners do now.

I myself will lose my winter fuel allowance as my income is over the pension credit limit, but I feel for those with just a small private pension on the old state pension

 

kaMelo

Iim pretty sure the RTI feed integration is UC specific so impossible for DWP to pick up in real time. Trying to integrate RTI into carers allowance may be desirable but with such an old system it would probably only be possible by rewriting it, not a small task. This is also why tapering is a problem, without the real time earnings information it can't happen.  Maybe something like an annual review along the lines of tax credits is an option to reduce the size of overpayments.

I don't think writing off these overpayments are an option either, there is a duty to protect public money and would be wholly unfair to those carers who stayed within the rules by dutifully reporting their income when it exceeded the threshold and losing the carers allowance for that period.

The bottom line is people need to know the rules for the benefit they are claiming and understand it is their responsibility to report any changes if they affect the benefit they are claiming.

MouldyOldDough

born_again said:

Or limit the number of hours that can be worked. Given the criteria for carers allowance. I agree the running up a large back payment is not something that should happen. But guess that people fail to act on the warning given when given carers allowance about the amount you can earn, and blindly think that it will be automatically adjusted for them over earning.
As would be said a lack of personal responsibility in some cases.

But given the announcement on winter fuel allowance today. Mmm

My wife/carer - is too knackered after spending 35 hours looking after me to even consider a second job anyway !!

HillStreetBlues

kaMelo said:

I don't think writing off these overpayments are an option either, there is a duty to protect public money and would be wholly unfair to those carers who stayed within the rules by dutifully reporting their income when it exceeded the threshold and losing the carers allowance for that period.

The bottom line is people need to know the rules for the benefit they are claiming and understand it is their responsibility to report any changes if they affect the benefit they are claiming.

TBH it's more of a headline grabbing article than one that's been clearly thought though.
If you start writing off claimant error debt, then overpayments will just increase as people would be hoping for their overpayment to be written off as well.

RAS

Frogletina said:

Muttleythefrog said:

I struggle to understand how someone can unwittingly build up tens of thousands in overpayment rather like someone accidentally falling through open cellar trap doors of 3 different pubs in the same afternoon.

Perhaps they should look at whether it would actually cost less to run the system if the earnings threshold was removed completely (and include the anticipated extra taxes raised from those who then work or work more)..  tapering it may be fairer but it doesn't sound easy to administrate which is perhaps the problem at the heart of the current one... it'd just make it worse.

She has friends who also claim carers allowance who don't do this even though she has advised them - one is doing the same job as her and earns the same, but has been earning over the limit for 2 years. My daughter has told her that it will catch up with her but so far she's not listened. 

The friend will end up in trouble. But what she should repay is the additional money she has received. She'll actually be fined the entire £8.5k.

One case featured in an article was someone who was told that she could not exceed an annual £7.5k earning limit. Not that any single instance had to be reported. She exceeded the limit six times over 5 years and has been told to repay every penny of carer's allowance received in the six years.

Apart from the cliff edge issue and the processing issue Frogletina cites, the basic concept is unreal. The reality is people don't earn exactly the same amount each week or month. If there's a change in their hourly rate, HR might take two or more months to get the increase into their pay packet.

That back pay could be enough tip them over the cliff edge just for one pay packet. And they lose their carer's allowance for month's whilst DWP process it, if the carer realises the situation. Or does the carer think "it's backpay and my earnings are still less than the limit."

I used to try and recruit experienced people to help with recruitment drives. Many refused because a few hours extra money would change their benefits situation and lead to months of financial hardship and cash flow problems. Couldn't get any one with children even if they would have liked to help. They would have been happy to have their benefits adjusted, but not to have them frozen whilst DWP got round to recalculating the impact of  single £50 payment.

born_again

MouldyOldDough said:

born_again said:

Or limit the number of hours that can be worked. Given the criteria for carers allowance. I agree the running up a large back payment is not something that should happen. But guess that people fail to act on the warning given when given carers allowance about the amount you can earn, and blindly think that it will be automatically adjusted for them over earning.
As would be said a lack of personal responsibility in some cases.

But given the announcement on winter fuel allowance today. Mmm

My wife/carer - is too knackered after spending 35 hours looking after me to even consider a second job anyway !!

Would agree given is roughly a full time job @35 hours. Most carers will spend far more than 35 hours a week in the role.