Carer's allowance penalties trap many in debt: report

HUNDREDS of thousands of unpaid carers have been hammered by harsh penalties for minor rule breaches, a damning national audit has revealed.

The National Audit Office (NAO) report exposed a system that has pushed vulnerable carers into financial and emotional turmoil.

According to the report, over 262,000 overpayments totalling £325 million were clawed back, with 600 carers even facing criminal prosecution.

The most shocking detail is the brutal "cliff-edge" earnings rule: earning just £1 over the £151 weekly threshold can trigger a repayment of £4,258.80 instead of just £52. Currently, 134,500 carers are struggling to repay over £251 million in debt.

Critically, the Department for Work and Pensions (DWP) appears to have deliberately understaffed its carer's allowance unit. Only half of electronic alerts identifying potential overpayments were investigated, with staff numbers cut by 14 per cent in two years.

Vivienne Groom, a former carer who was prosecuted and had a £16,000 inheritance seized, condemned the system. "They need to stop," she said. "I feel sorry for people who might lose their house or car."

Helen Walker from Carers UK described it as a "serious failure" causing immense distress, while Dominic Carter from Carers Trust called the system "broken".

Liberal Democrat leader Ed Davey called it "a scandal of the DWP's own making" that has caused "misery and distress on a staggering scale".

The average family carer – often already in poverty – repays nearly £1,000 in overpayments annually. Some cases have accrued over £20,000 in undetected breaches.

The DWP, however, maintains that legally, claimants must inform them of eligibility changes. However, ministers have now launched an independent review due next summer to investigate why overpayments spiralled and how to protect carers.

Social security minister Stephen Timms acknowledged the challenges, promising to boost the earnings threshold to help over 60,000 people and "make the system fairer".