Millions wasted, lives blighted: time to end the carer’s allowance scandal

The carer’s allowance overpayments scandal is surely one of the great public policy failures of recent years: a tale of official negligence and cruelty that has seen hundreds of millions of pounds of taxpayers’ money wasted while causing untold misery for tens of thousands of vulnerable carers.

These avoidable failures, the dismal human impact of which is succinctly illustrated in Monday’s Carers UK study, will not come as a shock to Guardian readers who have followed our reporting of the scandal in recent months, or to the new ministerial team at the Department for Work and Pensions (DWP).

The minister in charge of carer’s allowance is Sir Stephen Timms , who in opposition called for carer’s allowance to be urgently fixed and must now come up with a plan to do just that. He will be advised changes will be complex and expensive. This may be true, but so is the moral and economic cost of not doing so.

Eradicating overpayments must be a priority. The most shocking aspect of the carer’s allowance scandal is the life-shattering penalties imposed on unpaid carers for minor and unwitting breaches of the £151-a-week earnings limits, the operation of which has shown the social security system at its most brutal and indiscriminate.

The DWP’s failure to swiftly alert carers of overpayments, even when it knew – or could easily have spotted – they were happening, instead allowing them to build up over time into vast repayable debts levied on a mainly poor group of individuals whose lives are devoted to caring for loved ones, has been catastrophic.

An astonishing 134,500 unpaid carers are paying back £251m in earnings-related overpayments, most of which would never have accrued if the DWP had paid heed to whistleblower warnings about failures in its own systems, or kept promises made to MPs five years ago that it would fix them.

A grotesque byproduct of the overpayments scandal has been the criminalisation of hundreds of largely innocent carers for inadvertent earnings breaches. The policy of prosecuting carers for what MPs have called “honest mistakes” – even after carers have agreed repayments – should be urgently reviewed.

The DWP has for too long masked its failures by insisting carers are solely responsible for keeping within earnings limits. It must recognise it has a duty to proactively help carers stay within the rules. The government should consider compensating carers with historic overpayment debts the DWP could have prevented.

Carers UK argues DWP minds will be focused by being forced to write off any earnings overpayments it allows to accrue beyond six weeks. Officials have in the past boasted they have the technology to eradicate overpayments: ministers must ensure carer’s allowance is sufficiently well-staffed and resourced to see this happens.

The government also has an economic incentive to reform carer’s allowance. Many unpaid carers want to keep one foot in paid work while looking after loved ones. Part-time work is good for their wellbeing and finances, and allows them to maintain skills in the event they return to work full time.

Carer’s allowance rules, however, militate against this. Claimants cannot earn more than £151 a week, which works out at 13 hours at the minimum wage. Skilled workers such as teachers or nurses earning at a higher rate are limited to perhaps half a day’s work a week, which can see them lose touch with their careers.

Expanding the earnings limit – Carers UK suggests to 21 hours at the national minimum wage (£240 a week) – would allow many more full-time unpaid carers to keep one foot in the world of paid work while continuing to receive carer’s allowance. It would reduce the risk of unpaid carers breaching earnings limits.

The Guardian has spoken to professionals with in-demand specialist skills honed over many years who effectively are forced to abandon them when they start to care for loved ones and receive carer’s allowance. The government says it wants to “get Britain working” . Reforming carer’s allowance would be a start.

After years of being ignored by Conservative ministers, the injustices and inadequacies of carer’s allowances are firmly in the public eye and, not least because of the Liberal Democrat leader Ed Davey’s personal interest in the issue, on the political agenda .

Over to you, Labour.