Carer’s Allowance

Jim Shannon Excerpts

Wednesday 16th October 2024 Commons Chamber

[Ed Davey]

For carers who can receive carer’s allowance, which does not include young carers, it is a lifeline. Carer’s allowance is the main financial support available but, frankly, as the main way that we support family carers, it is not fit for purpose.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Gentleman for his endeavours in the debate, which we support, and on his compassion for carers given his own experience. Someone who cares for their parents all day and then works a couple of hours in the evening is precluded from receiving carer’s allowance. Does the right hon. Gentleman agree that those people, who do not get carer’s allowance because they happen to work a few hours, should qualify?

[Ed Davey]

I am grateful to the hon. Gentleman for that point. That should certainly be part of the review, but one or two other issues, which I will talk about, are critical to reform probably even before that.

At just £81.90 a week, carer’s allowance is the lowest benefit of its kind. For someone doing 35 hours of caring a week—the minimum period for eligibility—that is just £2.34 an hour. It is not just the low rate of the carer’s allowance that worries me but the fact that the eligibility rules are inflexible and very badly designed, chief among them being the earnings limit of £151 a week. Even for someone on minimum wage, that is just 13 hours and 20 minutes a week. The earning limit operates like a cliff edge. As soon as someone makes £151.01 a week, they lose the whole carer’s allowance—every penny of the £81.90. It acts as a significant barrier and a major disincentive to work. It means carers on low incomes cannot work a bit more to help make ends meet, so it is bad for them, bad for the person they are caring for, bad for their employers and bad for the economy.

But here is where things get worse. There are tens of thousands of carers who go slightly over the earnings limit, mostly without realising it. Maybe they pick up an extra shift, happen to get an end-of-year bonus, or understandably do not realise the way carer’s allowance operates in such a daft way. Even though the Department for Work and Pensions gets regular alerts from His Majesty’s Revenue and Customs when people go over the earnings limit, it has not been telling carers and it keeps paying carer’s allowance until one day, out of the blue, the carer gets hit with demands to repay those overpayments, which may have built up over months and years due to the DWP’s own inaction.

Back in July, I told the Prime Minister about one of my constituents, Andrea, who lives in Chessington. She is a full-time carer for her mum. Back in 2019, Andrea decided to go back to work part-time in a charity shop—mainly for her mental health, she told me. She informed the DWP at the time and it continued her payments. Five years later, it wrote to her and said that no, she now had to repay £4,600. Andrea says she feels “harassed, bullied and overwhelmed.” She now does just six hours’ unpaid work a month to avoid going over the earnings limit and getting into more debt. She says the whole thing makes her “want to give up work and give up caring.”

--- Later in debate ---

[Alison McGovern]

I will come to the review that we will be conducting, but let me make the general point that we in the Government ought to be able to understand the realities of life and take that into account.

The position that I have described makes the dire situation we have inherited all the more shameful. Family carers are being pushed to breaking point. They have too often been forced to quit jobs that they want to keep and could keep with the right support, which isolates them and shrinks our workforce. With the right support, we could help carers and help our economy as well. To rub salt into the wound, we have inherited a system whereby busy carers, already struggling under a huge weight of responsibility, have been left having to repay large sums of overpaid carer’s allowance, sometimes amounting to thousands of pounds. It seems as though what is supposed to be a safety net designed to catch those in need was instead designed to catch them out.

[Jim Shannon]

For some time constituents of mine have found that they are due to repay an overpayment. I always ask them whether they remember when they made their complaint. All telephone conversations with the Department are recorded, so there is a way of making it clear that the fault lies not with the applicant but with the Department. Is there also a way of ensuring that those who have been penalised unfairly for following the Department’s advice should not have to pay that money?

[Alison McGovern]

As the hon. Member knows, the Department is not responsible for the delivery of social security benefits in Northern Ireland, but I am sure that Northern Ireland’s Department for Communities will be keeping a close eye on the debate and will want to take his points into account.

This problem is one of the numerous ways in which our social security system is failing the people of this country, with 2.8 million left out of work because they are unwell and more than 4 million children growing up poor, and we have therefore moved fast to fix the foundations of the DWP. That includes our setting up a taskforce to tackle child poverty, extending the household support fund for six months, and holding the first meeting of our new Labour Market Advisory Board. The board’s expertise and fresh thinking will help us break down barriers to work, such as an inability to balance paid work with family care.