I was left in tears when DWP said I owed £11k after earning just 50p more than ‘cliff edge’ benefits threshold
Plus, we've explained how you can avoid falling victim to the flaw
A SINGLE mother from North Wales was left in tears after a demand to repay thousands of pounds in benefits she received caring for her disabled daughter.
Karina Moon, 62, was told by the Department for Work and Pensions (DWP) that she must pay back £11,292.75 of her carer’s allowance or would face fraud charges.
She’s just one of tens of thousands forced to pay back huge sums after unknowingly breaching the rules, which have been described as unfairly complicated.
Karina prides herself on her financial diligence.
She meticulously keeps records of her earnings, scrutinises benefit entitlements, and manages her budget with care.
Despite this, she, like many others, fell into what’s been called the carer’s allowance trap.
Carer’s allowance is paid to those providing at least 35 hours of unpaid care a week, in most cases to disabled or sick relatives.
It is currently paid at a weekly rate of £81.90 and anyone on the benefit is allowed to have a second income from a job.
However, you can’t earn more than £151 a week, or you lose all of your benefit allowance.
This is a different approach to other benefits, like Universal Credit, which has a tapered approach to earnings so that those who do work don’t lose all of their money at once.
The Department for Work and Pensions (DWP), which pays the benefit, also looks to get any overpaid benefits back.
Speaking to Karina said: “I broke down, I was crying. I was gobsmacked.
“I was absolutely distraught because I live within the law. They made me feel like I was defrauding it.”
As a single mother, Karina dedicates most of her time to caring for her 22-year-old daughter, who suffers from Bardet-Biedl syndrome, autism, type 2 diabetes, and blindness.
She supplemented her income by working part-time at Tesco, earning £9.50 an hour, believing she stayed within the earnings threshold set by the DWP.
But she was shocked when contacted in 2019 and informed she had exceeded it.
Karina contacted Citizens Advice for help, and it found that she had exceeded the £151 a week earnings limit by between as little as 50p and £3, depending on the week.
The DWP has the technology available to identify minor overpayments early on.
However, it did not contact Karina until around three years after she started working at Tesco, allowing overpayments to accumulate significantly.
Despite efforts to resolve the issue, the DWP insisted she repay the full amount received in carer’s allowance over three and a half years—a total of £11,292.75, plus a £50 civil penalty.
Reluctantly, Moon agreed to the repayment terms out of fear of criminal charges.
Citizens Advice assisted her in negotiating a monthly repayment plan of £5 a month, but the DWP’s insistence on £60 per month means Karina will likely continue payments until she’s 73.
New figures revealed that in 2022-23, 26,700 carers were asked to repay sums relating to earnings breaches.
More than 800 were repaying sums between £5,000 and £20,000, and 36 were repaying more than £20,000
There’s no time limit on how far back the DWP can go to spot erroneous carer’s allowance payments and demand money back.
A DWP spokesperson said: “Carers across the UK are unsung heroes who make a huge difference to someone else’s life and we have increased carer’s allowance by almost £1,500 since 2010.
“We are committed to fairness in the welfare system, with safeguards in place for managing repayments, while protecting the public purse.
“Claimants have a responsibility to inform DWP of any changes in their circumstances that could impact their award, and it is right that we recover taxpayers’ money when this has not occurred.”
What is carer's allowance?
CARER'S allowance is a UK benefit designed to help people who have caring responsibilities for more than 35 hours each week.
Those eligible get £81.90 a week paid directly into bank accounts.
To qualify, the person you care for must already get one of these benefits:
- Personal independence payment (PIP) – daily living component
- Disability living allowance – the middle or highest care rate
- Attendance allowance
- Constant attendance allowance at or above the normal maximum rate with an Industrial Injuries Disablement Benefit
- Constant attendance allowance at the basic (full day) rate with a war disablement pension
- Armed forces independence payment
You don’t have to be related to the person or live with them to apply.
But if you share caring responsibilities with someone else, only one of you can make a claim.
The type of care you provide can vary, but includes things such as helping with washing or cooking, taking the person to medical appointments or helping out with household tasks such as shopping or organising bills.
To get the benefit, you must also meet a certain set of criteria:
- You must be 16 or over
- You have to spend at least 35 hours a week caring for someone
- You need to have been in England, Scotland or Wales for at least two of the last three years (this does not apply if you’re a refugee or have humanitarian protection status)
- You must normally live in England, Scotland or Wales or live abroad as a member of the armed forces (you might still be eligible if you’re moving to or already living in an EEA country or Switzerland)
- You cannot be in full-time education
- You must not be studying for 21 hours a week or more
- You cannot be subject to immigration control
- You will also have to meet certain earnings criteria in order to get the benefit.
Your earnings must also be £151 or less a week after tax, National Insurance and expenses.
You can apply for the carer’s allowance online by visiting www.gov.uk/carers-allowance/how-to-claim.
What to do if you breach the earnings limit
If you breach the £151 earnings limit, you should try and proactively report it to the DWP as it is classed as a change in circumstances.
You can report any change in circumstances online via the Government’s website.
But you’ll need your National Insurance (NI) number to hand, details of the person you’re caring for and details of the change.
If you have been overpaid carer’s allowance, you will have to pay it back in full or in instalments via the DWP Debt Management platform.
This is also on the Government’s website.
If you don’t do this, the DWP can take deductions from your work salary, or even pass your case on to a debt collector.
If you don’t engage with the debt collector, it may then take your case to the county courts.
You can dispute an overpayment if you don’t agree with it, but you’ll need evidence as to why you claim not to have overpaid.
You can do this through what’s known as a “mandatory reconsideration,” which you can submit to the DWP online, by phone, or by letter.
The decision letter you receive from the DWP will contain the specific contact details to which you need to send correspondence.
Once the DWP has received your mandatory reconsideration, you will receive a “mandatory reconsideration notice” informing you whether it has changed its decision.
If you disagree with that outcome, you can appeal to the Social Security and Child Support Tribunal.
A judge will listen to both sides of the argument before making a decision.
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity works out what you could get.
Entitledto’s determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto’s data.
You can use to determine which benefits you could receive and how much cash you’ll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.