Unpaid carers have been ordered to repay thousands of pounds for allegedly breaching benefit rules, despite officials knowing the decisions were based on illegal and discredited political guidance.
The Department for Work and Pensions (DWP) is believed to have sent letters to around 1,400 carers in January asking them to repay sums relating to breaches of income rules on carers’ allowances that had been scrapped four months earlier.
Campaigners have demanded to know why the DWP went ahead with issuing overpayments, causing distress and hardship to carers, rather than waiting and reassessing decisions under the new guidelines.
Some carers are believed to have already paid the sums or agreed monthly payment schedules. Most will also have received a £50 civil fine imposed for negligence. In theory, an overpayment of more than £5,000 would see a carer prosecuted for fraud.
Many of the cases are likely to be canceled or reduced over the next two years as part of a wider DWP reassessment of tens of thousands of potentially insecure carers’ allowance overpayment decisions dating back more than six years.
The reassessment was announced by ministers in November following a highly critical independent review by disability rights expert Liz Sayce into the DWP’s handling of carer’s benefit over the past decade.
“At a time when wider reforms to the system were approaching, these cases could have been considered under the new guidance rather than moving forward under previous guidance which had already been recognized as problematic,” said Helen Walker, chief executive of Carer’s UK.
He added: “The extreme distress caused by overpayments to some carers could have been avoided by simply assessing under the new guidance.”
The blunder will put further pressure on senior DWP officials, who have come under increasing criticism in recent weeks. MPs declared they had little confidence in the DWP hierarchy’s commitment to reform, while Sayce herself warned earlier this month of “resistance forces” within the DWP opposing change.
Sayce’s review concluded that the DWP’s “flawed” internal guidance had for years unlawfully punished carers who had averaged their earnings over three or 12 month periods to allow them to stay within the weekly earnings limits of the Carer’s Allowance.
As a result, thousands of caregivers working zero-hour jobs, or doing temporary jobs in schools, were unfairly punished, leaving them with large, unexpected debts from overpayments and plunging many into emotional despair.
Income limits on carers’ allowances were at the center of an award-winning investigation by The Guardian, which found hundreds of thousands of unpaid carers have been hit by overpayment claims in recent years after inadvertently earning more than the permitted weekly wage threshold.
Although many carers had earned just a few pence over the weekly limit, overpayments were inflated by tough “cliff edge” benefit rules, under which any breach of the weekly earnings limit resulted in the loss of the entire benefit. This meant that a breach of £1 over 52 weeks would result in a claim not of £52 but £4,332.
The DWP’s long failure to verify all electronic alerts it received informing it of potential overpayments meant carers were unaware of their mounting debts, which were allowed to accumulate over months and often years. Carers typically ended up owing between £1,500 and £5,000, but in some cases up to £20,000.
Sayce’s review concluded that responsibility for the majority of overpayments lay with “systemic” problems at the DWP and stressed that carers should not be held responsible for failing to comply with what it said were complex and confusing benefit rules.
It is understood that officials had shelved a backlog of overpayment cases submitted in January between January and September last year amid growing internal doubts about the robustness of guidance on average earnings.
The DWP had lost a series of benefits tribunal cases in which judges had questioned the legality of its guidance on averages and it was also clear that the Sayce review would examine the guidance.
The DWP quietly changed guidance in September, and ministers formally accepted in November that the old guidance was wrong. But instead of reevaluating the stored cases, officials pressed ahead with payment demands.
Benefits law has always allowed averaging and it is unclear why the DWP changed its guidance six years ago. Although he promised MPs in 2019 that he would make it easier for carers to average their income, within months he had tightened the guidelines to make it almost impossible for carers to do so.
A DWP spokesperson said: “We inherited a system that let carers down and we are taking decisive action by accepting the vast majority of the recommendations of the Sayce review.
“These cases relate to decisions that were made before the publication of the review and by ministers who accepted the recommendations of the Sayce review.
“They have been processed in accordance with the guidelines in force at the time the overpayment decision was made. Anyone who falls within the parameters of the review will be reconsidered as part of the reassessment exercise.”
