DWP to reassess hundreds of thousands of cases in carer’s allowance scandal

Hundreds of thousands of vulnerable unpaid carers will have their cases reassessed after a damning official review concluded they had been left with huge debts because of government failure and maladministration. The review, due to be published on Tuesday, was triggered after a year-long Guardian investigation revealed how carers had been hit with draconian penalties of as much as £20,000 relating to carer’s allowance. Some were plunged into hardship, others were jailed. Ministers have promised to cancel or reduce penalties that were wrongly issued after the review concluded many were the result of official error rather than “wilful rule-breaking”. Related: Penalties for unpaid carers in benefits scandal must be halted, says Ed Davey However, the government has stopped short of offering compensation to those affected. It is understood compensation was both considered by the review and by ministers but is not one of the published recommendations of the review, headed by disability policy expert Liz Sayce. The stress, ill-health and anxiety endured by carers who were pushed into debt and hardship by carer’s allowance failures emerged in a series of Guardian articles over the past 20 months. Many carers said they were harassed and treated like criminals by DWP staff. Hundreds were convicted of benefit fraud. It remains unclear what will happen to carers convicted of benefit fraud as a result of official mistakes. Pat McFadden, the welfare secretary, said putting right past failures was essential to rebuild trust with unpaid carers. “We inherited this mess from the previous government, but we’ve listened to carers, commissioned an independent review and are now making good for those affected,” he said. Ministers are understood to have accepted the vast majority of the review’s 40 recommendations. Sayce welcomed the government’s promise to review all carer’s allowance overpayments since 2015, saying the policy had “major impacts on carers’ health, finances and family wellbeing”. The reassessment of overpayments is likely to focus on those whose weekly or monthly earnings fluctuated, and who were penalised despite their “average” total earnings over a defined period being within allowed earnings limits. Unpaid carers who look after loved ones for at least 35 hours a week are entitled to £83.30 a week carer’s allowance, as long as their weekly earnings from part-time jobs do not exceed £196. But if they exceed this limit, even by as little as 1p, they must repay that entire week’s carer’s allowance. Under the so-called “cliff-edge” earnings rules, this means someone who oversteps the threshold by as little as 1p a week for a year must repay not 52p but £4,331.60, plus a £50 civil penalty. The draconian penalties were exacerbated by the DWP’s failure to alert carers who overstepped the weekly earnings limit, even though it had access to near real-time data. This meant overpayments in some cases were allowed to accumulate for years before unwitting carers were handed huge bills. At least two social security tribunal cases this year have found in favour of carers. Andrea Tucker and Nicola Green had overpayment penalties struck out after successfully arguing their monthly part-time earnings were lawful when averaged over a one-year period. This suggests DWP policy on the treatment of fluctuating earnings since 2020 has been flawed. Echoing the wording of a report by MPs in 2019, which found breaches of the rules were mostly human error and not fraud, Sayce said: “This wasn’t wilful rule-breaking – it simply wasn’t clear what earnings fluctuations carers should report.” The failure to offer compensation to carers whose lives were turned into a nightmare of debt and anxiety as a result of DWP failures will disappoint many carers. One told the Guardian: “A lot of carers have suffered serious stress and worry over this. They’ve suffered ill-health as a result. It should be more than just about cancelling or reducing some overpayments.” Carers UK welcomed the report as a “big step forward” which acknowledged “the gravity of system failures” within the DWP. Its chief executive Helen Walker praised the government’s commitment “to put right the wrongs of the last 10 years”. Carers Trust’s chief executive Kirsty McHugh said: “As the review makes clear, the DWP’s guidance on overpayments was both wrong and confusing. It was a huge error going back a decade that meant countless carers were wrongly judged to have received overpayments of carer’s allowance. “We are pleased the DWP has taken it on the chin and listened to both carers and the services that support them.” Katy Styles, of the We Care Campaign, said: “If the Sayce review finally ensures carers can claim carer’s allowance with confidence, that’s not a minor tweak, that’s justice. “If the government delivers this, it will be a huge win for people who’ve carried so much, for far too long. Carers deserve certainty, not constant anxiety.” The DWP’s repeated failure to tackle carer’s allowance design and administrative failures despite repeated warnings, not least internally by a civil servant whistleblower, caused public outrage last year and became known as the carer’s allowance scandal. It has been frequently compared to the Post Office scandal. Currently at least 144,000 unpaid carers are repaying more than £251m in overpayments, with the total amount in carer’s allowance wrongly paid out by DWP since 2019 estimated at more than £357m.