DWP’s unchecked database leaves tens of thousands of carers at risk of debt

Tens of thousands of unpaid carers are at risk of debt and criminal prosecution because their cases are lying unchecked on a government “alert” database of people being overpaid benefits, according to new figures.

Officials are aware of the mounting number of instances where UK carers are at risk of racking up overpayments that can in some cases lead to crippling debt, but for the past five years have chosen not to investigate all cases..

Overpayments happen when someone who claims £81 a week carer’s allowance, often for looking after a frail, disabled or ill relative, breaches a strict government-imposed earning cap, which means they cannot earn more than £151 a week in a paid job.

Related: Carer’s allowance scandal is not going away – but will DWP reform happen?

If the carer breaches that limit, even by a penny, their whole allowance is deemed to be an overpayment, which the DWP forces them to repay, and in some cases also takes them to court.

The Department for Work and Pensions (DWP) has been accused of “burying its head in the sand” after it emerged ministers put in place only enough staff to check half of the alerts it receives when unpaid carers’ benefits are deemed “overpayments”.

The failure to identify and notify carers of breaches for months and sometimes years is at the centre of a scandal, revealed by the Guardian, which has pushed affected carers into debt and ill health, stripped them of savings and inheritances, and in one case their home.

There are more than 150,000 unpaid carers paying back overpayments – and in some cases being prosecuted for fraud – after falling foul of earnings rules, according to figures which critics say show the system is not working.

Of these, 11,600 carers are repaying sums of more than £5,000. About one in five unpaid carers in part-time work breached the weekly earnings limit last year.

New figures show that of 67,000 alerts flagging up potential carer’s allowance earnings rules infringements last year nearly half were not acted upon by DWP staff. That ratio – about 50% of alerts not being investigated, potentially allowing overpayments to build up – has remained roughly the same for the past five years.

Separate figures indicate staffing levels in the unit tasked with investigating overpayment alerts have barely changed over the same period. There were 49 full-time-equivalent staff in the unit in 2023-24, down from 60 the previous year and only marginally higher than the 46 in place in 2019.

Since 2018 the DWP has had data-matching technology in place linked to HMRC data that issues thousand of alerts a month, enabling potential earnings breaches in theory to be investigated almost immediately. Five years ago it said the system would “stop overpayments occurring in the first place”.

The Public and Commercial Services Union, which represents thousands of DWP staff, accused DWP ministers of continuing to “bury their heads in the sand” on overpayments. “Had carer’s allowance been properly staffed, overpayments could have been spotted earlier and this outrage avoided,” said the PCS general secretary, Fran Heathcote.

Emily Holzhausen, the director of policy at the charity Carers UK, said: “There’s a clear lack of resource, investment and political will to tackle the issue of carer’s allowance overpayments, which is continuing to cause carers huge levels of distress when they unwittingly go over the earnings limit.”

The director of policy and public affairs at the Carers Trust, Dominic Carter, said: “Honest mistakes by unpaid carers are spiralling out of control because the DWP hasn’t provided enough staff to deal with the issue. This is inexcusable.”

The DWP says overpayments are ultimately the fault of claimants, who must report any changes in income. Charities argue it is unethical for the DWP to penalise carers when its own systems could have spotted the infringement at an early stage, and it has chosen not to fully resource the investigation of all earnings alerts.

In 2019, the DWP said in its formal response to an MPs’ report on carer’s allowance overpayments that its future strategy was “centred around stopping overpayments occurring in the first place”. It said it had “sufficient staff in place to meet demand” and new data-matching technology would help it “limit future overpayments”.

Correspondence between Peter Schofield, the DWP permanent secretary, and the work and pensions select committee last year suggests the DWP policy not to investigate all alerts was made on financial grounds. In the letter, Schofield says the DWP is “unable to action” every alert. Instead, it “makes the best use of our available resources” by targeting alerts relating to the highest value overpayments.

A DWP spokesperson said: “We ensure all our teams are resourced to deliver key services and support the most vulnerable in our society. We have simplified processes and improved communications to help protect claimants from accruing debt or being incorrectly paid and we remind claimants of their responsibility to inform us of any changes in their circumstances.

“DWP recognises the importance of the welfare of those who have incurred debt and remains committed to supporting customers to manage repayments to ensure fairness for both claimants and taxpayers.”