DWP urged to loosen Carer’s Allowance rule that triggers £4,330 debt | Personal Finance | Finance

Carer’s Allowance provides £83.30 per week from the Department for Work and Pensions (DWP), with carers additionally permitted to earn up to £196 a week elsewhere before jeopardising their entitlement. Yet, this threshold stands as a stark precipice for carers, where earning even £1 over it results in total disqualification from receiving the allowance.

This scenario places carers at risk; surpassing the threshold by just £52 annually could lead to losing £4,330 in benefits.

The issue was brought into sharp focus when MP Sarah Gibson challenged the Secretary of State for Work and Pensions, inquiring about the possibility of “writing off historical Carer’s Allowance overpayments in cases involving small or inadvertent breaches of the earnings limit”.

In response, MP Andrew Western acknowledged that, under the last administration, some carers faced demands to return “thousands of pounds”.

He noted that the ongoing review initially centred on understanding how such overpayments occurred, ways to avoid future incidents, and exploring avenues to assist those still repaying these debts.

He continued, as reported by the Daily Record: “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.”

Other Carer’s Allowance changes have already been confirmed. The DWP is set to notify individuals who exceed the earnings threshold via text messages.

It’s important to note that weekly income calculations for this benefit take place after specific taxes and expenses are deducted.

Carers UK noted this includes as including Income Tax, National Insurance, half of any pension contributions, and 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