Financial Insights That Matter
Nearly 140,000 carers owe more than £250m for overpayment of a key benefit they receive, with a watchdog warning many may be racking up debt without knowing.
The National Audit Office, the public spending watchdog, said the number who owe carer’s allowance overpayment debt had risen every year since 2018, and was up by almost three quarters from 80,169 to 136,730 in 2023-2024.
In a report covering England, Scotland and Wales, it said the Department for Work and Pensions paid £3.7bn in carer’s allowance to more than 900,000 claimants in 2023-2024. Carers must earn £151 a week or less to qualify for the allowance.
The NAO said the current rules created a “cliff edge”, meaning a claimant – who by law must inform DWP promptly if their circumstances change – is either entitled to the whole allowance or none of it and so can “quickly build up significant overpayments”.
The report stated: “This means it is important to identify an overpayment early or, better still, prevent it from occurring.”
Total outstanding overpayment debt in 2023-2024 amounted to £251.7m, up from £150.2m five years ago.
Historic overpayments have led to many carers unwittingly racking up unmanageable levels of debt and some quitting their jobs as a result.
The issue of people being penalised for going over their earnings limit for carer’s allowance – even by as little as a few pence per week – was previously branded a “scandal” by charities.
The earnings threshold will rise to £196 a week from April.
We covered the hardships faced by carers in a Money series earlier this year:
#1a73e8;">Boost Your Financial Knowledge and Achieve Stability
Discover a growing online community dedicated to delivering financial news, tips, and strategies designed to help you manage money effectively, save smarter, and grow your investments with confidence.
#1a73e8;">Top Financial Tips for Saving and Investing
- Personal Finance Management: Master the art of budgeting, expense tracking, and building a strong financial foundation.
- Investment Opportunities: Stay updated on market trends, learn about stocks, and explore secure ways to grow your wealth.
- Expert Money-Saving Advice: Access proven techniques to reduce expenses and maximize your financial potential.