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Carer’s Allowance Overpayments

Let me come to that point in a moment. I saw the article that my hon. Friend refers to. It is an important point, and I will address it in a couple of minutes.

My hon. Friends have quite rightly raised questions about accountability for the review’s delivery. We have appointed a senior responsible officer, and we have committed to update both the Public Accounts Committee and the Work and Pensions Committee on progress every six months. The review highlighted the need for clearer guidance and better communication with carers, particularly on earnings averaging, overpayments and reporting responsibilities, so we have revised the decision letters so that carers are clearer on how their earnings have been averaged and on exactly what changes they need to report and when.

We have also redesigned the overpayment communications to be clearer and to show more empathy, I hope, than was shown in communications previously. We have strengthened the signposting to independent advice and debt support, including to charities and free money guidance, and we have made it clearer how carers can ask questions, challenge decisions or agree affordable repayment plans. We are continuing to test and develop the letters and the guidance, and there has been recent user research to assess clarity, understanding and impact.

We are planning further improvements. I want to express my appreciation for the carers organisations, particularly Carers UK and the Carers Trust, that we have been working with. They have put a good deal of work into this, together with the Department, to try to ensure we get these communications right. I hope that is going to be a significant improvement.

The Sayce review pointed to the lack of awareness and take-up of carers’ national insurance credits. We want to make sure that carers understand what they are entitled to, so we have been reviewing our letters and guidance to increase awareness. The review recommended reducing the impact of the earnings cliff edge while longer-term reform is developed. As my hon. Friend the Member for Shipley quite rightly pointed out, if someone is a penny over the earnings limit, they are not entitled to any carer’s allowance; that has been the case ever since 1976.

We have commissioned research on the impact of the higher earnings limit, which is now being regularly updated, unlike in the past, and commissioned behavioural research to inform future policy decisions, including changes to regulations, short-term mitigations and longer-term reform, including a taper. In the end, I think that will be the answer: instead of an earnings cliff edge or cut-off limit, there should be an arrangement so that the carer’s allowance reduces in a tapered way. It will take some time to develop that and put the IT in place and so on, so we are looking at what we can do in the meantime.

As my hon. Friend touched on, the review recommended better join-up between carer’s allowance, universal credit and other benefits. We are aware that a considerable burden is placed on carers, requiring them to resolve offsetting issues themselves. We have accepted Liz Sayce’s recommendation, and we will put in place an automated solution. While we develop that—again, that will take a while—we will put in place a manual workaround.

The review recommended tackling backlogs and identifying overpayments earlier. We have reduced the backlog of automated earnings notifications from HMRC. We now process those alerts much faster, allowing issues to be identified more quickly—another point raised by my hon. Friend. In future, we want to follow up on all those alerts, not just about half of them as we did in the past, so that we can draw people’s attention to problems as they arise. Taken together, those actions are about listening to carers, fixing what went wrong, supporting people better and modernising carer’s allowance in the future.

In response to the review’s recommendations on faulty averaging guidance, we will reassess carer’s allowance cases that might have been affected. A number of people, including my hon. Friend the Member for Bethnal Green and Stepney, have raised the question of why we did not pause all carer’s allowance earnings overpayments action pending the review’s outcome. My answer is that we have been clear about our approach all along: we have to balance fairness for carers with our duty to taxpayers. If money has been paid out incorrectly, it needs to be recovered. We have retained that position as the review was under way.

In most cases, the Department already holds enough information to carry out the reassessment, and affected carers will not need to take action unless the DWP asks for additional details. For older overpayment cases, dating back to 2015 or perhaps a few years after that, the DWP may no longer hold the relevant data and information: we are required to retain data only as long as it is needed for the purpose for which it was collected. The Department will open a simple online form to allow people to submit the relevant information. We are aiming to do that in November this year.

The Department will work closely with organisations supporting carers who think they may have been affected to register for reassessment on gov.uk. Everybody whose case is reviewed will be notified of the outcome, including whether their overpayment has been confirmed or changed. Advice and support for anyone whose carer’s allowance case is, or might be, involved in the reassessment exercise will be available, at no cost, from the Department or trusted partner organisations such as Carers UK and the Carers Trust—I thank them again.

Hon. Members have asked how progress will be tracked. The reassessment exercise is part of our broader response to the independent review and, as I have said, we have committed to updating the Public Accounts Committee and the Work and Pensions Committee on our progress every six months. Those updates will include statistics on progress, and they will enable the Committees to scrutinise progress and hold the Department to account. We will also put some information in our annual report and accounts.

Rebuilding trust requires honesty, accountability and action, and that is the approach we have aimed to take throughout this process. We have to fix the problems and correct the mistakes; the work of unpaid carers is too important and too valuable not to do so. More broadly, we want to improve and modernise carer’s allowance to make it easier for unpaid carers to combine their caring responsibilities with paid work where they are able to, and better reward them for doing so. We will also ensure that those receiving carer’s allowance and universal credit receive a more joined-up service than they have in the past. We owe that to those who provide such a vital service to our fellow citizens.

I know that my hon. Friend the Member for Shipley, the all-party parliamentary group and the Committees represented in the debate will scrutinise how we deliver on those aims very closely. They are absolutely right to do so.

Motion lapsed (Standing Order No. 10(6)).

11.30 am

Sitting suspended.