Carer’s Allowance Overpayments

Debate between Stephen Timms and Anna Dixon

Tuesday 14th April 2026 Westminster Hall

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I am delighted to serve under your chairmanship this morning, Sir Roger. I congratulate my hon. Friend the Member for Shipley (Anna Dixon) on securing this extremely timely debate, which is a welcome opportunity to set out some of the work that the Government have been doing in response to the concerns that she has raised. She is a very strong advocate for unpaid carers; she was before entering Parliament, as she said, and she is now as chair of the all-party parliamentary group on carers. I echo her remarks about the significance of this year, which is the 50th anniversary of the introduction of carer’s allowance by Harold Wilson’s Government. It is right to mark and celebrate that.

My hon. Friend has spoken previously of how her mother cared for her grandmother for nearly 30 years. I think all of us can grasp how important and valuable the heroic scale of the contribution made by unpaid carers is, and my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali) is right to draw our attention to the economic value of that contribution. The contributions of unpaid carers are vital to the family members, friends and neighbours they look after, but also to our communities, our country and our economy.

We inherited a dreadful situation in which some very busy, hard-pressed carers, already struggling under a huge weight of caring responsibilities, found themselves with large, unexpected debts due to alleged overpayments of carer’s allowance. My hon. Friend the Member for Shipley gave a particularly clear example of the problem that arose, and I will comment on it a moment.

The Work and Pensions Committee, among others, including the Public Accounts Committee, looked at this problem when I was the Chair, and I am pleased to now be a part of a Government who are able and willing to do something about it. We made a very early move after we were elected—I think that it was in the first Budget after the general election—to increase the weekly carer’s allowance earnings limit, as my hon. Friend said, to match 16 hours of work at national living wage levels.

As my hon. Friend said, that change from April 2025 resulted in the largest ever increase in the limit. It means that more than 60,000 additional people will be able to receive carer’s allowance between 2025-26 and 2029-30, but it is also important to note, particularly in the context we are discussing, that the chance of inadvertently slipping above the earnings limit is greatly reduced, because the limit will keep track with increases in the national living wage in the future. As my hon. Friend said, the earnings limit rose again to £204 per week from the beginning of this month.

People had a real problem in the past when the national living wage was increased, because their earnings that had been below the earnings limit went above it, and there was nothing to alert them to that; they had to monitor it themselves. Quite a lot of people were tipped inadvertently above the earnings limit, leading to an overpayment of carer’s allowance. I am very confident that the change we have made to keep the earnings limit in line with the national living wage will be a big step forward in reducing the incidence of overpayments in the future.

[Anna Dixon]

I had understood that we were also looking into opportunities to alert carers of potentially having breached the earnings limit. Is there anything in place to help communicate information from His Majesty’s Revenue and Customs or the DWP to carers?

[Sir Stephen Timms]

My hon. Friend makes a very good point. I will come on to that, because there is some progress in that area.

As my hon. Friend said, having made the change to the earnings limit, we commissioned the independent review led by Liz Sayce, the former chief executive of Disability Rights UK and a well-respected and widely recognised expert in disability benefits. Her review was published in November and, in my view, she did a brilliant job. She really got to grips with what had gone wrong, and I echo my hon. Friend’s thanks to her. The report found that many carers had faced unexpected debts because of errors in the way that the DWP had applied averaging rules on fluctuating earnings. The guidance used by DWP staff since 2015 had not properly reflected the law, which permits averaging over a period when assessing whether earnings are above or below the earnings limit.

The case that my hon. Friend mentioned of somebody who was receiving income once every six months is a clear example of the problem. I do not know what the figures were in that case, but it may well be that if Helen’s earnings had been averaged over six months instead of being taken into account in one month, they would have been below the limit. That is exactly the sort of instance that we will examine in the reassessment exercise, which I will say more about in a moment.

We accepted 38 of Liz Sayce’s 40 recommendations in full or in part, and we have already made progress on more than half of them. I will set out those recommendations and what we have done in response, and I will pick up on a couple of my hon. Friend’s questions. The review recommended putting right historical overpayments caused by flawed guidance on the averaging of earnings. I am pleased to say that new and correct guidance has now been in place since the start of September 2025, but it was wrong from 2015 for 10 years.

We are now delivering the reassessment exercise that Liz Sayce recommended: reclassifying affected overpayments as “not recoverable”, refunding carers where appropriate, and applying a fair approach where records are no longer held by the Department. The reassessment exercise began yesterday, so this debate is particularly well timed, and I am grateful to my hon. Friend for having secured it.

As my hon. Friend said, the Government have set aside £75 million of funding for refunds under the exercise in the financial years 2026-27 to 2028-29. That is a three-year period; we are hoping we can complete the exercise in two, but just to be sure, we have allowed three years to ensure we can complete it properly. We are expecting to review more than 200,000 cases, so it is a major undertaking. As she said, we estimate that we will be reducing, cancelling or refunding debts for perhaps some 25,000 carers in the course of the exercise.

Oral Answers to Questions

Debate between Stephen Timms and Anna Dixon

Monday 8th December 2025 Commons Chamber

[The Minister for Social Security and Disability (Sir Stephen Timms)]

Liz Sayce did an outstanding forensic job in getting to the bottom of the carer’s allowance overpayment problems. We have accepted or partially accepted 38 of her 40 recommendations. The Department will reassess overpayments incurred between 2015 and last summer where fluctuating earnings were an issue, and we will set out detailed plans in the new year.

[Anna Dixon]

I thank the Minister for his response. As he well knows, over the last decade, around 185,000 unpaid family carers have been pursued by the Department for Work and Pensions to return overpayments in their carer’s allowance. Through no fault of their own, many working carers have faced bills that have often run into thousands of pounds. It is incredibly positive that, after years of inaction from the Tories, this Government have acted. Does the Minister share my hope that trust might now be rebuilt between the state and the near 6 million unpaid family carers in this country?

[Sir Stephen Timms]

My hon. Friend is a great campaigner for carers on this issue and others. She is absolutely right: this is a very serious problem that was ignored for 10 years, despite there being quite a lot of publicity about it. I hope, as she says, that trust will now be rebuilt as we fix these problems in the coming months.

Oral Answers to Questions

Debate between Stephen Timms and Anna Dixon

Wednesday 18th June 2025 Commons Chamber

[Sir Stephen Timms]

At the moment, there are 200,000 people out of work on health and disability grounds who would love to be in a job, and who say they could be in a job today if they had the support to make that possible for them. We are determined to provide them with that support.

[Anna Dixon (Shipley) (Lab)]

As the Minister knows, the personal independence payment is a passport benefit for carer’s allowance. The Government’s impact assessment suggests that approximately 150,000 family carers will lose out due to the proposed changes to the eligibility criteria for PIP. What further analysis have the Government done of the financial impacts of welfare reform on family carers?

[Sir Stephen Timms]

We are consulting on the support that will be needed over the next few years for perhaps one in 10 of those currently claiming PIP. Support will be needed for those who lose their benefit, and that will include family carers who receive carer’s allowance at the moment.

Personal Independence Payment: Disabled People

Debate between Stephen Timms and Anna Dixon

Wednesday 7th May 2025 Westminster Hall

[Sir Stephen Timms]

My hon. Friend is absolutely right. The people who are getting PIP are the people who meet the criteria. My point is that we cannot simply carry on increasing spending at the current rate. That has to be addressed.

I well understand the concerns among people who claim PIP, and I want to take the opportunity of this debate to address those concerns. We are talking to disabled people, disability charities and disabled people’s organisations. The Green Paper consultation will continue until the end of June, and a White Paper will follow later this year. But we need to act ahead of a White Paper. Claims to PIP are set to more than double this decade, from 2 million to more than 4.3 million. That increase is partly accounted for by a 17% increase in disability prevalence, as mentioned, but the increase in the benefit caseload is much higher. It would certainly not be in the interests of people currently claiming the benefits for the Government to bury their heads in the sand over that rate of increase.

Following the Green Paper, we are consulting on how best to support those affected by the eligibility changes. We are looking to improve the PIP assessment; as mentioned, I will lead a review of that. The current system produces poor employment outcomes, high economic inactivity, low living standards and high costs to the taxpayer. It needs to change. We want a more proactive, pro-work system that supports people better and supports the economy as well.

I will turn specifically to the changes to PIP eligibility. PIP is a crucial benefit that contributes to the extra living costs that arise from disability or a health impairment. The changes we have announced relate to PIP daily living; the PIP mobility component is not affected. We are clear that the daily living component of PIP should not be means-tested, taxed, frozen or anything else that has been suggested. We are committed to continue increasing it in line with inflation. For the majority of current claimants, and categorically for the most vulnerable, who have been highlighted in this debate, it will continue to provide, in full, the support that it currently provides. Employment support for those who are able and want to work will be substantially improved as well.

As has been referenced, we have published data that shows that just over half of those who claim PIP today scored four points in one daily living activity in the last PIP assessment. Understandably, as we have heard, almost half of those who currently claim the benefit will be concerned that they will not be eligible in future. However, we have also published the Office for Budget Responsibility’s assessment, which is that by 2029-30 only around 10% of those who currently claim the daily living component of PIP will lose it as a result of the changes. That is the assumption that has gone into the spending forecasts. We are projecting that spending on PIP will continue to increase in real terms every year, but not at the unsustainable rate of the last five years.

[Anna Dixon (Shipley) (Lab)]

Will the Minister give way?

[Sir Stephen Timms]

I am afraid I cannot give way again.

The OBR is right on this. Its assessment is based on previous experience of changes of this kind. The behaviour both of the people claiming the benefits and of those who conduct the assessments changes. For example, I have met people who were awarded two points for one of the activities last time around, when I thought they were entitled to four, but it did not change their award, so it was not challenged and nobody minded. In future, someone in that position could well score four points on that activity and so retain the benefit, even though they did not score four points on any of the activities last time around.

Changes to the PIP assessment will not be immediate; they will take effect from November 2026.

--- Later in debate ---

[Anna Dixon]

I apologise for not getting here earlier; I have been listening to carers who have been sharing their stories. I spoke to a woman who is caring for her husband, who has a neurodegenerative disease and currently scores only two points across the board. Their family would be penalised under the tightening restrictions. Does the Minister agree that somebody with a neurological and degenerative disease should be counted as severely disabled and protected from the changes?

[Sir Stephen Timms]

I would be happy to talk to my hon. Friend about the details of that particular case. I think the threshold we have set is the right place to set the eligibility criteria in the future. I am happy to discuss that point specifically. Our goal is a system that is financially sustainable in the long term so that it can be there for all of us who need it in the future.

Disability History Month

Debate between Stephen Timms and Anna Dixon

Thursday 12th December 2024 Westminster Hall

[Sir Stephen Timms]

It was a very good event. I made some rather poor efforts to address the group in British Sign Language—my first attempt. I know that she will be pleased—I am sure the hon. Member for Bognor Regis and Littlehampton (Alison Griffiths) will be as well—to know that we are committed to supporting the British Sign Language advisory board, which was set up in the wake of Rosie Cooper’s British Sign Language Act 2022. It is the UK Government’s first dual-language board focusing on key issues that affect deaf people. We are committed to promoting and supporting British Sign Language and we will shortly be publishing the 2023-24 British Sign Language annual report.

I am pleased to join my hon. Friend the Member for Derby North in congratulating the Royal School for the Deaf Derby on the accolades that it has received from Ofsted, and I very much agree with the important points made by my hon. Friend the Member for Bury St Edmunds and Stowmarket (Peter Prinsley) about the importance of what is being provided to ensure that people’s hearing is well looked after and supported.

I need to work closely with ministerial colleagues and with other Departments right across Government to ensure that disabled people get the support they need to overcome the daily barriers that they face. The commitment that I am setting out today on behalf of the Government needs to be a whole of Government endeavour, so I was very pleased about and grateful for what Members said in the debate about my announcement last week of a lead Minister for disability in every Department to represent the interests of disabled people and to champion disability inclusion and accessibility in their Department. I will chair regular meetings with the members of that group and encourage them to engage directly with disabled people and their representative organisations as they work on their departmental priorities. I am looking forward to the group’s first meeting next week, and I can give my hon. Friend the Member for Thurrock the assurance that she is looking for about our shared aims and what that group will be working towards.

[Anna Dixon (Shipley) (Lab)]

It is fantastic to hear about all that the Government are doing on disability. My right hon. Friend the Minister will know that many disabled people rely on family and friends to provide care and support to enable them to have a full life—to participate in work, school and other things that they enjoy—so will he reassure me and others that, in taking a cross-departmental approach to disability, he will be considering the important role of family carers?

[Sir Stephen Timms]

I am grateful to my hon. Friend for her point and can certainly give her the assurance that she seeks. As she knows, in the Budget we made an important improvement to the arrangements for carer’s allowance through the commitment that the earnings threshold for carer’s allowance will be increased to 16 hours a week at the national living wage rate. That will be a permanent link with the national living wage and, we hope, will overcome the problem that a lot of carers have run into over the last few years, whereby they get a bit of a pay rise that tips them above the threshold and therefore inadvertently receive an overpayment of carer’s allowance. We hope that the change will help, and we know that the increase itself will bring about 60,000 more family carers into eligibility for carer’s allowance.

As my right hon. Friend the Chancellor of the Exchequer said in the Budget, we will also be looking at the possibility of a new taper arrangement for carer’s allowance, in order to move away from the current cliff edge, which has always been there. That will require quite substantial IT development; it will not be ready overnight, but I think that my hon. Friend the Member for Shipley (Anna Dixon) will agree that it is quite a promising idea to improve support for unpaid carers in the future.

My focus is primarily on domestic disability policy, but I also oversee UK implementation of the UN convention on the rights of persons with disabilities and represent domestic disability-related policy on international platforms, so in October I attended the first ever G7 disability inclusion summit, which was hosted by the Italian presidency and held just outside Assisi, where I and my G7 counterparts and Ministers from several other countries all signed up to the Solfagnano charter. That sets out a collective agreement to advance work in eight key areas, among which is:

“Inclusion as a priority issue in the political agenda of all countries”.

It is a useful document, focusing specifically on disability inclusion all the way through. We have also worked to extend the UN convention to a number of UK overseas territories. We recently extended the treaty to Bermuda—the first British overseas territory to which it has been extended. I can confirm that we are committed to protecting and promoting the rights of disabled people around the world as well as in the UK.

A great perk of my job was to attend the Paralympic games in Paris in August. The hon. Member for Faversham and Mid Kent (Helen Whately) was right to draw attention to the huge improvement that was the London 2012 Paralympic games, which took the Paralympics movement to a new level. I visited the athletes’ village in August, and it was most interesting to see how it had been laid out to be accessible to everybody. There were ramps everywhere and electrical devices at the bottom of every slope that people could clip on to their wheelchair to help them up it. It is worth making the point that in those games, we came second in the medals table, ahead of the United States and all the other European countries and behind only China. The games attracted unprecedented support and audiences, with the venues full of enthusiastic —and, I must say, highly partisan—French audiences. It was good to hear everybody highlighting the importance of UK leadership in not just starting the games at Stoke Mandeville, but hosting the groundbreaking 2012 games. The unique contribution of Channel 4 in 2012, and ever since, has clearly been deeply appreciated around the world in the Paralympics movement.

My hon. Friend the Member for West Bromwich was absolutely right to draw attention to the importance of disabled people being able to be physically active. There is a problem in the benefits system, because too often people fear that being physically active could lead to them losing their benefits. We need to address that challenge of reforming the system in our Green Paper, when it is published in the spring.

Disability History Month reminds us that progress is a shared endeavour. Working together across Government, across the House and with the wider community, we can build a society in which everyone can participate fully and equally. The hon. Member for Strangford (Jim Shannon) rightly raised the question of the extent to which I am working with Ministers in Northern Ireland, in Scotland and in Wales. I met Minister Lyons from Northern Ireland when he came to London, and the Minister for Transformation, my hon. Friend the Member for Stretford and Urmston (Andrew Western), also met him on his recent visit to Northern Ireland. The hon. Member for Strangford is right to underline the importance of us working together across the United Kingdom on these priorities.

Let us honour the courage and contributions of disabled people, past and present, by reaffirming our commitment to not just a month of reflection, but a permanent springboard for lasting change and a more inclusive future.

Oral Answers to Questions

Debate between Stephen Timms and Anna Dixon

Monday 7th October 2024 Commons Chamber

[Anna Dixon (Shipley) (Lab)]

16. What steps she is taking to tackle carer’s allowance overpayments.

[The Minister for Social Security and Disability (Sir Stephen Timms)]

The work of unpaid carers is vital and often heroic, and we are determined to give them the support that they need. We are currently looking at options for tackling the problem of overpayments, including the possible introduction of a text message alert service.

[Sir Stephen Timms]

My hon. Friend is absolutely right, and I agree that we need to support carers properly. We want to get to the bottom of what has gone wrong with these overpayments and why so many people have been caught out. We have been piloting the introduction of a text message service, as I have mentioned, which has involved texting 3,500 claimants to alert them when His Majesty’s Revenue and Customs informs the DWP that they have breached the current earnings limit. We are currently looking at the results, and if they are positive, that will be the first step towards addressing the overpayments problem. We will need to do more, but it will be a good first step.

[Anna Dixon]

There are nearly 1,200 recipients of carer’s allowance in Shipley. The current earnings limit leaves people vulnerable to accidentally accruing overpayments if they become ineligible for the allowance, and it also acts as a disincentive, deterring people from working as much as they would like to. Will the Government consider raising the earnings limit?

[Sir Stephen Timms]

My hon. Friend has written to me about this matter, and I welcome her commitment to making progress. In an excellent piece of work, the former Work and Pensions Committee made a number of recommendations on the earnings rules, and once the new Committee is in place, we shall respond to the former Committee’s proposals.