Carer’s Allowance

Stephen Timms Excerpts

Monday 22nd April 2024 Westminster Hall

[Sir Stephen Timms (East Ham) (Lab)]

I congratulate my hon. Friend the Member for Neath (Christina Rees) on the good way in which she opened this important debate on behalf of the Petitions Committee. It is a pleasure to serve with you in the Chair, Ms Elliot.

The Work and Pensions Committee is taking a close interest in the discussions around carers, and I am delighted to see my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) here; she has taken a lot of interest in this issue. I have a particular personal interest in the debate because my constituency accounts for the largest number of signatures on the petition—73—so I thought it was particularly important for me to be here.

As others have said, for the best part of two decades now the Work and Pensions Committee and its predecessors have been calling on the Government to reform carer’s allowance, including the rate at which it is paid. A 2008 Select Committee report, “Valuing and Supporting Carers”, concluded that carer’s allowance was “outdated” and

“should be radically overhauled at the earliest opportunity to recognise the contribution carers make”.

Well, that “earliest opportunity” still has not arrived. Challenges raised in that report remain unaddressed 16 years later.

We know that the Department has conducted research to support policy development on carer’s allowance. In the response to a 2019 Select Committee report, it promised to publish that research. It has never been published—we still have not seen it. The Select Committee is very much looking forward to hearing from the Minister about carer’s allowance on Wednesday. Will she tell us when the policy development will conclude and whether the research will finally be published, as promised in 2019?

As we have heard, carer’s allowance is paid at a weekly rate of £81.90, which is less than other income-replacement benefits—jobseekers’ allowance is nearly £10 a week more. In my Committee’s recent inquiry on benefit levels in the UK, we heard that carer’s allowance was paid at too low a rate and that as a result carers often had to cut back on food and were struggling to make ends meet.

Last month, in a one-off evidence session on carer’s allowance, we heard from Terry Kirton, a full-time carer for his father. He said, of caring and of receiving carer’s allowance:

“I am tired of struggling. I want to be able to look after my father. I want to make sure he does not have to go without things, and I would like to be able to have bit of a life myself without having to fight with my finances every day.”

I know the Minister has substantial experience of caring; does she recognise that the rate of carer’s allowance today is just not enough?

Terry is a registered nurse by profession. To retain his registration he would have to work a certain number of hours a week, but that would take him over the carer’s allowance earnings limit. It is impossible for him to maintain his registration and continue to receive carer’s allowance. To balance his caring role and his finances, he has had to leave the profession—to give up work altogether—and care for his father. He now just about survives on carer’s allowance.

That brings me to the second challenge: the earnings limit for carer’s allowance. In the same session of our Committee, we heard how the carer’s allowance earnings limit acts as a disincentive for carers who would like to work, either because they would be worse off financially should they lose carer’s allowance because of their work, or—this is the really big problem—due to fears that they would accidentally slip over the limit for carer’s allowance, giving rise to the overpayments we have just heard about. The earnings limit effectively traps carers only in low-paid work, whatever their skills or training.

The carer’s allowance earnings limit is not increased in line with the national minimum wage. As my hon. Friend the Member for Neath rightly told us, Carers UK has pointed out that the number of hours that a carer has been able to work at the national living wage while also receiving carer’s allowance has decreased over the last few years. Our report called on the Government to commit to uprating the earnings threshold for carer’s allowance annually. There should be a commitment to increase it every year.

A similar point was made in the 2019 report. In their response, the Government said:

“We will look at the findings from the research”—

to which I have referred—

“with an open mind, and would consider any changes to the earnings limit to be a priority.”

However, since then, nothing has happened. Will the Minister tell us today whether there are plans to review an increase on the earnings limit on the carer’s allowance, such as by linking increases each year with rises in the national living wage?

We have also heard that the earnings limit is just one of several eligibility restrictions. Another is the 21-hour rule, which prevents carers in full-time education— those attending 21 or more hours a week—from claiming carer’s allowance. Last month, Carers UK made the point to our Committee that a young adult carer has to

“choose between getting an education and qualifications and getting some financial support”.

They added:

“That is not right. It will affect people for the rest of their lives”.

Has the Department looked at the effect of that rule specifically on young and young adult carers, including on their opportunities later in life? The restriction on learning and caring is, we understand, being lifted in Scotland, with obvious advantages for young carers.

My final concern is overpayments, which we have touched on, and which have featured in recent news reports. It is not a new issue; our predecessor Committee published a report specifically on this issue in 2019. Data from the Department shows that in the year 2022-23, the Department was pursuing more than 30,000 overpayments of up to £2,000, and more than 7,000 payments of over £2,000, including 36 overpayments of over £20,000.

How has the Department allowed overpayments which, in some cases, clearly cover quite a few years, to accumulate? From real-time information from His Majesty’s Revenue and Customs, the Department knows what people are earning, and it can stop payment of carer’s allowance to those who are no longer eligible. Indeed, the Government’s response to the 2019 report confirmed that there is an automatic notification when weekly net pay exceeds the carer’s allowance earnings limit, yet the Department does nothing, instead allowing people to build up these huge overpayments, and then prosecuting them. Carrying on in that way is not right. I recognise that the Minister may not have the detailed data for 2023-24, as we have been given for ’22-23, but it would be helpful if she asked her officials to provide that to the Committee in the coming weeks. I very much look forward to the Minister’s response, and to her appearance before the Committee on Wednesday, when we will have an opportunity to explore these issues in further detail.

--- Later in debate ---

[Mims Davies]

I thank the hon. Lady for making that point. The right hon. Member for East Ham (Sir Stephen Timms) took us back nearly two decades to 2008, the year that he was Minister of State in the Department holding the welfare reform portfolio. This is not new; this is challenging. The hon. Lady makes an important point, to which I will try to reply in my wider remarks. When we discuss this issue at the Select Committee, I am keen to get to the crux of all the challenges, but that is too wide a subject for this debate.

The hon. Member for Lewisham, Deptford (Vicky Foxcroft) talked about benefit delays and the challenge of the long-standing principle that the carer’s allowance can being awarded only once a decision has been made to trigger a disability benefit to the person being cared for. Carer’s allowance can be backdated, however, to the date from which the disability is payable. I believe about 100,000 people are on PIP and the carer’s allowance. I hope that goes some way to answering her questions.

The hon. Member for Motherwell and Wishaw (Marion Fellows), with her characteristic approach, raised the work being done in Scotland. We will look fully and with interest at the evaluation of the changes that the Scottish Government make. At the DWP, we are supporting those changes, so we will engage on them. That also goes to the earlier point about looking and learning, which is exactly what we should do.

Many hon. Members spoke about young adult carers and the impact of study. We are engaging with the Department for Education and the cross-Government working group is meeting again soon. It is important that carers maintain links with the education system, so that they can receive part-time education and a carer’s allowance. We rightly recognise the aspirations of young carers to not only complete their studies and build a successful career, but be there for their loved one.

That is true not just for young carers: we need to ensure that carers understand that, while caring, they have developed amazing skills that an employer will find invaluable, such as managing finances, the resilience that has been spoken about today, dealing with crisis, organisation and planning, and that level of interpersonal skills. We need to ensure that our young people in particular get the financial support that they need while studying, so they can rightly progress into the career that they want.

On the latest data on overpayments, our most recent statistics are that carer’s allowance overpayments relating to earnings and employment represent about 2.1% of our £3.3 billion of carer’s allowance expenditure, which is approximately £70 million. I welcome the opportunity to discuss that further with the Select Committee later this week.

[Sir Stephen Timms]

Will the Minister respond specifically to my point about the Government’s response to the Select Committee report five years ago? Paragraph 20 says:

“The VEP Service receives the same information Universal Credit…receives from HMRC…A notification is automatically received by VEP when the weekly net pay exceeds the CA”—

carer’s allowance—

“earnings limit…The VEP Service then applies a series of…rules…to determine if a VEP Alert should be sent on to the CA Unit to action.”

It is puzzling that the Department knows when that is being overpaid, but seems not to be doing anything. Why is that?

[Mims Davies]

I was just coming on to overpayments and what has been in the press. I am not the Minister leading on the fraud side of the policy, but we will discuss that on Wednesday. I am keenly looking at it in the round and working with the right hon. Gentleman. There is a lot of interest, but there is always more to matters and more to discuss, although we should refrain from discussing individual cases.