WIREDGOV

• Carer’s Allowance overpayment debt has increased from £150m in 2018-19
• In 2023-24 the government recovered £47m of Carer’s Allowance debt
• The government has made greater use of civil penalties, issuing 30,129 in 2023-24, and less use of administrative penalties or referring cases for prosecution

The total amount of outstanding Carer’s Allowance overpayment debt rose to £251.7 million in 2023-24, increasing from £150.2 million in 2018-19. Over the same period, the number of new overpayment cases identified each year fluctuated between 32,500 and 60,800, according to a new report from the National Audit Office (NAO).

In 2023-24, the Department for Work & Pensions (DWP) paid £3.7 billion in Carer’s Allowance to over 900,000 claimants. Currently a carer must earn no more than £151 a week and provide at least 35 hours of care a week to someone who receives a qualifying benefit to claim.

Overpayments occur when a claimant receives a payment they are not entitled to, or they receive the wrong amount. The eligibility rules for Carer’s Allowance create a ‘cliff-edge’ with no taper rate – a claimant is entitled to either the whole allowance or none of it – meaning significant overpayments can quickly build up.

In 2023-24, the most significant causes of new overpayment cases related to:

• claimants having earnings over the permitted limit (58% of cases).
• claimants ceasing to provide care (24% of cases).
• other reasons where the claimant no longer met the eligibility criteria, e.g. being in receipt of an overlapping benefit; the person being cared for had died (16% of cases).

The number of people with outstanding overpayment debt increased every year from 2018-19 to 2023-24 – rising from 80,169 to 136,730, an increase of 71%.

However, the average value of new Carer’s Allowance overpayments identified by DWP fell in each of the past four years, dropping from £1,471 in 2019-20 to £988 in 2023-24, suggesting that overpayments are being identified earlier.

Overall, from 2018-19 to 2023-24 DWP increased both the amount of Carer’s Allowance debt recovered and the amount written off. It recovered £28 million more in overpayments, and wrote off £6 million more, in 2023-24 than it did in 2018-19.

DWP has said it has a renewed focus on making sure all overpayments are detected and are either promptly referred to debt management for recovery or are written off.

DWP introduced the Verify Earnings and Pensions Service (VEPS) in 2018, which uses earnings information provided by HM Revenue & Customs (HMRC) to identify where a claimant may be being overpaid.

Since 2020-21, DWP has investigated around half of VEPS cases and stated that it would have to redeploy staff from other parts of the business to increase the number of cases investigated.

In 2022-23, 12,600 (25%) of the 50,000 VEPS cases that DWP investigated resulted in an overpayment being detected or prevented. DWP reports it has achieved £121 million in savings through investigating VEPS cases and is on course to exceed its target of £139 million by 2025-26.

The number of cases DWP referred for prosecution fell from 246 in 2018-19 to 54 in 2023-24. The highest-value suspected fraud case referred was £44,565 in 2022-23.

DWP can offer an ‘administrative penalty’ of £350 or 50% of the overpayment (whichever is greater, up to a maximum of £5,000) to a person as an alternative to prosecution – the number of administrative penalties has fallen significantly in recent years, from 774 in 2018-19 to 75 in 2023-24, a drop of 90%.

DWP also imposes ‘civil penalties’ of £50 – overall there has been an upward trend in its use of these – the number of civil penalties increased by 50% from 20,023 in 2018-19 to 30,129 in 2023-24.

In October 2024, DWP announced a review into Carer’s Allowance overpayments to cover how and why overpayments were accrued, operational changes to minimise future overpayment risk, and how DWP can best support those with overpayments.

Read the full report

Carer’s Allowance

Notes for editors

1. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
2. The Work and Pensions Committee held two oral evidence sessions in spring 2024 to follow up on an earlier inquiry. In May 2024, the then Chair of the Committee wrote to the Comptroller and Auditor General (C&AG) to ask if we could set out the latest information on Carer’s Allowance, including on overpayment levels. In his reply, the C&AG agreed that, given the continuing concerns about the administration of this benefit, there would be value in us undertaking some further work on this area. The purpose of our work was to improve transparency and inform public debate about Carer’s Allowance. Our work was not designed to assess the value for money of DWP’s administration of Carer’s Allowance.