The Liberal Democrats will commit to a £1.5bn overhaul of carer’s allowance, including a £20-a-week boost for more than 1 million people who devote their lives to looking after frail, ill and disabled loved ones, in their general election manifesto.
An ongoing Guardian investigation has revealed that tens of thousands of unpaid carers have been forced by the government to pay back huge sums – and in some cases have faced criminal prosecution – for minor and accidental breaches of carer’s allowance earnings rules.
Proposed reforms to be unveiled on Monday by the Lib Dem leader, Ed Davey, will include a write-off of £250m of carer’s allowance overpayment debts run up by more than 100,000 carers, and measures to help carers earn more through part-time paid work.
Davey, who is a carer himself, said the proposals were designed to give family carers a fair deal and put a stop to what he called the “shameful hounding” of unpaid carers by the Department for Work and Pensions (DWP).
The Guardian’s revelations about the scale and human impact of avoidable carer’s allowance overpayments have caused shock and outrage, while the brutal treatment of vulnerable claimants has led to comparisons with the Post Office scandal.
Campaigners, MPs and academics have called for major changes to carer’s allowance, which is seen by critics as outdated, poorly designed and out of step with the needs of unpaid carers, the modern labour market and the demands of an ageing society.
Davey has spoken in party election broadcasts about his own experience as a carer for his severely disabled teenage son, John, and for his mother, whom he helped to look after when he was a child after she fell ill with cancer.
“Caring is why I got into politics. It isn’t just my story, it is the story of millions of family carers around the country working hard to look after their loved ones,” he said.
He added: “For too long carers have been treated as an afterthought by this Conservative government. Thousands of carers are being shamefully hounded in the overpayments scandal, all because of the unfair cliff-edge for carer’s allowance and the DWP’s incompetence.”
Overpayments occur when a carer’s allowance claimant who works part-time on top of their unpaid caring duties of at least 35 hours a week breaches a strict earnings limit, currently set at £151 a week.
So-called “cliff-edge” rules mean a carer who oversteps that limit, even by a penny, must repay the whole £81.90 weekly allowance. A carer who earned £1 more than the £151 threshold for 52 weeks, therefore, must pay back not £52 but £4,258.80.
The Liberal Democrat proposals, which the party has costed at £1.4bn a year, include:
An immediate £20-a-week increase in the value of carer’s allowance from £81.90 to £101.90. This would amount to a £1,040-a-year boost for family carers.
A £32 increase in the carer’s allowance earnings limit, taking it to £183 a week, with a taper applied above this limit to prevent carers from being hit with huge overpayment penalties.
An amnesty that would see existing carer’s allowance overpayment debts written off, except in cases of deliberate dishonesty and fraud.
The DWP said five years ago that new technology would enable it to prevent most earnings overpayments. But it has repeatedly failed to identify and act on potential breaches. As a result, claimants have unwittingly built up overpayments of as much as £20,000 before being hit with repayment demands and prosecution threats.
The latest official figures show 134,000 carers are repaying a total of £251m. About 11,600 are repaying sums greater than £5,000. There were 34,500 overpayments in 2023-24 alone, suggesting as many as one in five unpaid carers with a part-time job fell foul of the rules.
The DWP’s handling of carer’s allowance overpayments is being examined by the government’s spending watchdog, the National Audit Office, after MPs on the cross-party Commons work and pensions select committee raised concerns over the human and financial cost of the policy.
There are an estimated 5.7 million carers in the UK, the majority of them women. About four in 10 of them live in poverty and about 1 million claim carer’s allowance. Unpaid carers’ efforts help prop up the NHS and social care system, and according to Carers UK they save the country £162bn a year.
