Hundreds of thousands of DWP benefit claimants have been hit with a surprise bill with debts of £20,000.
Some 134,800 people owed Carer’s Allowance payments to the DWP because of overpayments, as of May 2024.
Carers UK has released a report looking into the issue, with carers surveyed for the report saying they owe debts of between £150 and £20,000, with an average overpayment debt of £4,000.
Around seven in 10 of the overpayments are due to carers breaching the earnings limit for the benefit, with Carers UK warning this is because many claimants are “not understanding the rules”.
To be eligible for the benefit, your income must not exceed £151 a week after tax, National Insurance and expenses are deducted.
If your income goes over this amount you have to pay back the entirety of the benefit, which is currently £81.90 a week, or £4,258.80 a year.
Reasons for carers going over the earnings limit include fluctuating earnings, receiving a pay rise, or errors on the part of an employer, such as paying them late.
Claimants have often had to endure cuts to their other benefits to make the repayments, with one person saying their PIP was reduced by £200 a month.
The study found: “Many carers reported that it took years to pay back the debt and many were still in the process of paying it back.
“Some had left employment due to the stress, strain and fear of having another overpayment only to be living on a reduced income as well as having to pay off the overpayment debt.
“For others, Carer’s Allowance was stopped without warning causing them severe financial difficulties. This is on top of significant unpaid caring responsibilities for older, ill or disabled relatives.”
Carer’s Allowance supports people who care for some for at least 35 hours a week, if the person they care for gets certain benefits, such as PIP or Attendance Allowance.
One carer spoke about the ‘threatening’ letters they receive from the DWP about the repayments. They said: “It pushed me over the edge as the letters were very threatening and on top of my caring responsibilities it made me ill.
“I was scared and felt under constant threat from debt collectors and being taken to court.”
Carers UK is calling for Carer’s Allowance to increase by at least £11.10 a week and for the earnings threshold to be set in line with 21 hours a week at the National Living Wage.
This would increase the earnings limit from the current £151 a week to £180.60 a week for claimants aged 18 to 20 and to £240.24 a week for claimants aged 21 and over.
The Government was asked if they had considered the report in a question in Parliament for Lord Bishop Christopher Chessun, the Bishop of Southwark.
Baronness Maeve Sherlock said in response: “The Government welcomes the report published by Carers UK, and is considering its findings.
“Ministers were pleased to meet with the organisation, and with carers, to discuss the issues raised shortly after publication of the report.
“More broadly, in respect of overpayments of Carer’s Allowance, the Government is moving quickly to understand exactly what has gone wrong so that it can set out its plan to put things right.”
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