Carers do an incredible job of looking after those with physical or mental impairments.
There are thought to be 10.6 million carers in the UK, which equates to around 1 in 5 people.
While carers' work is usually unpaid, some are entitled to a payment known as the Carer’s Allowance. However, new information about carers having to repay money the government has previously awarded them has come to light.
Here’s an overview of what’s going on with the Carer’s Allowance overpayments issue, plus what to do if you’ve been affected.
What Is Carer’s Allowance?
Carer’s Allowance is a benefit for those who spend at least 35 hours per week caring for someone with an illness or disability.
As with all benefits, Carer’s Allowance has an eligibility criteria. However, someone may be classed as a carer if they provide unpaid support to someone who has a physical or mental health condition or if they are suffering from an addiction.
For 2024/25, the Carer’s Allowance is £81.90 weekly. Those who qualify for Carer’s Allowance are paid this amount every four weeks.
Why Are Carers Having to Pay Back Money?
Carers are being asked to pay back their Carer’s Allowance due to overpayment.
As the earnings threshold for Carer's Allowance is just £151 per week, those receiving the benefit may have exceeded the threshold without realising.
In the news, many carers have reported exceeding the £151 earnings threshold by taking on extra part-time work to help them cover their bills. Due to the stress and exhaustion from trying to juggle their care work with making ends meet, the fact that they are no longer entitled to Carer’s Allowance may have gone unnoticed.
While these reasons are understandable, any money paid in error to carers must be repaid to the DWP.
The government is now seeking £250 million back from carers due to overpayments of the Carer’s Allowance.
Do I Have to Pay Back Carer’s Allowance?
If you have been notified that you have been overpaid Carer’s Allowance, then you will need to pay the money back.
It may also be that you’ve just realised you are earning more than £151 per week (after deductions) and receiving Carer’s Allowance. If so, you will also need to pay any overpayments back.
Since the DWP will want to claim back all of the money you’ve been overpaid, the sooner you notify them about your overpayments, the better.
Paying Back Overpayment of Carer’s Allowance - What To Do
In the first instance, we’d advise contacting the DWP if you think you may have been overpaid the Carer’s Allowance.
You can call the Carer's Allowance Unit on 0800 731 0297.
From there, you can confirm if you’ve been overpaid and by how much.
Even a tiny amount can be a massive shock if you have overpaid. That’s why engaging with the DWP at the earliest opportunity is vital to stop the payments from increasing.
Top Tips If You Need Help With Carer’s Allowance Overpayments
Being asked to repay your Carer’s Allowance may impact your ability to make other repayments.
That’s why we also advise contacting anyone you owe money to, such as your energy suppliers, if you think you might be unable to make any other payments. In some cases, you may qualify for additional help or support.
Likewise, if you are currently struggling to repay any debt, then it’s also important to engage with your debtors. You can get free debt advice from StepChange by calling 0800 138 1111.
Next, check if you’re entitled to any other benefits. In a previous post, we mentioned how £15bn worth of benefits go unclaimed annually in the UK.
Those who are eligible for Carer’s Allowance may also qualify for other financial help, including:
- Council Tax reduction
- Grants or bursaries for courses or training
- National Insurance credits
- Pension Credit
- Universal Credit
Various carer support centres across the UK will understand the challenges you are experiencing. Be sure to reach out to your local centre to access any support you may need.
Beyond official support channels, make sure you also keep in contact with friends and family.
Being a carer can be stressful, with much of this invisible work going on in homes across the UK. That’s why it’s important to reach out, as even a cup of tea with a friend can be hugely beneficial for your well-being, especially in difficult times.
Carer’s Allowance FAQs
We know the topic of Carer’s Allowance can be daunting and complicated. We hope you’ll find our answers to the following common questions helpful.
If you have any further queries you’d like us to answer in more detail in a future post or on social media, please let us know, and we’ll pass your suggestions on to our team.
Can I Claim Carer’s Allowance for Myself?
No, you can’t claim Carer’s Allowance for yourself.
However, you may be able to claim extra money if you’re eligible for either the disability premium, enhanced disability premium or the severe disability premium.
How to Claim Carer’s Allowance
You need to head to the GOV UK website to make an application for Carer’s Allowance.
Have any important information ready, such as your bank details and national insurance number.
If you can’t apply online, you should call the helpline on 0800 731 0297 for further advice.
You can also request an application form to be sent to you via post.
How Much Is Carer’s Allowance In 2024?
The 2024/25 rate for Carer’s Allowance is £81.90 per week.
Is Carer’s Allowance Taxable?
Yes, Carer’s Allowance is a taxable benefit. However, you will only need to pay tax if your total earnings exceed the personal allowance for 2024/25, which is £12,570.
Since the Carer’s Allowance alone would not take you over the limit, this would mean you would have income from other sources, e.g., part-time work or a personal pension.
How Much Can You Earn On Carer’s Allowance?
As of the 2024/25 threshold, you can earn up to £151 after deductions (i.e. National Insurance or Income Tax) and claim Carer’s Allowance.
In other words, if following any deductions, your earnings are above £151 per week, you are no longer entitled to Carer’s Allowance.
Many people are unaware of the £151 a week earnings limit. As a result, the thought of losing eligibility and being required to pay back any previously awarded Carer’s Allowance can come as an unwelcome surprise. That’s why checking your eligibility is important, including if your circumstances change.
Does Carer’s Allowance Affect Universal Credit?
Yes. If you receive Carer’s Allowance, then the amount of Universal Credit you receive may be reduced. You will need to contact the DWP to be given a definite answer that’s based on your personal circumstances.
However, carers who receive Universal Credit may be eligible for another type of payment known as the Carer’s Premium, which can give you up to £198.31 per month.
Does PIP Affect Carer’s Allowance?
If you receive the Personal Independence Payment (PIP) this won’t stop you from receiving Carer’s Allowance. We recommend using a benefits checker to see what benefits you could be entitled to, as other benefits can be means-tested.
Fair for You - Helping You Afford the Things You Need When You’re on a Low-Income
If you or someone you know is a carer, we hope you’ve found the above advice useful.
Carers often form some of the many people in the UK who are on a low income. When money is tight, it can be difficult to afford the things you need for your home or family.
Fair for You is a non-profit organisation that was set up to help those who are financially excluded including carers.
Our flexible repayment system offers a range of items and prepaid shopping cards, making it easier to afford the things you need.
Take a look around our website to learn more about the products we offer.
Also, follow Fair for You on social media and sign up for our newsletter to keep up with our latest news and updates.