The cliff’s edge forces people to pay thousands for earning just £1 more
Carer’s Allowance offers much-needed financial support for people taking on unpaid care work. Alongside the £83.30 per week it provides from the DWP, carers are also allowed to earn £196 elsewhere per week without losing this benefit.
However, this threshold is a staggering cliff-face for carers. Earning just £1 over the threshold makes them completely ineligible for the benefit.
Essentially, earning £52 more per year can cost them £4,330. Some carers might even end up indebted to the DWP because they don’t realise they have breached the threshold.
MP Sarah Gibson quizzed the Secretary of State for Work and Pensions on this as an independent review is underway looking at this squeeze on carer finances. She questioned if the department has weighed up the potential of “writing off historical Carer’s Allowance overpayments in cases involving small or inadvertent breaches of the earnings limit”.
MP Andrew Western responded, recognising that under the previous government, some carers were forced to repay “thousands of pounds”. Adding that the review started focused on how these overpayments happened, how this can be prevented in the future and how to support people still paying back these sums.
He shared, as Daily Record reported: “It is anticipated that the Independent Review will arrive at its conclusions this summer. We will, of course, carefully consider the findings of the review and its recommendations.
“Both the report from the Independent Review and the Government’s response will be published. It would not be appropriate to speculate on the findings of the review or any potential outcomes.
“Where overpayments do occur, the Department has a duty to the taxpayer to protect public funds and to ask for money to be paid back. We remain committed to working with anyone who is struggling with their repayment terms and will always look to negotiate sustainable and affordable repayment plans.”
The DWP recently confirmed some changes coming to Carer’s Allowance. This includes sending a text message to claimants who have breached the earning threshold and overhauling how overpayments are checked.
Some people may not recognise that they have surpassed the earnings limit, or mistakenly believe they’re not eligible for the benefit because of it. Your weekly income for Carer’s Allowance purposes is calculated after certain taxes and deductions are paid.
This can include, according to Carers UK:
- Income Tax
- National Insurance
- Half of any contributions to your pension
- Certain business expenses
The following income streams also don’t count as earnings for Carer’s Allowance calculations:
- Money received from an occupational or private pension
- Contributions towards your living or accommodation costs from someone you live with
- The first £20 a week and 50% of the rest of any income you make from someone boarding in your home
- A loan or advance payment from your employer