This article is more than 1 year old

This article is more than 1 year old

More than a thousand carers face being prosecuted for fraud as the government attempts to claw back overpayments to people who have been looking after sick and elderly relatives from the poorest communities, the Guardian has been told.

Another 10,000 carers could face fines, as the Department of Work and Pensions prepares to recover money mistakenly paid out over several years.

But campaigners say the ‘get tough’ policy could unfairly penalise people who are already struggling to make ends meet, and claim the government has to share the blame for the overpayments.

The DWP has had access to records from the taxman that allow it to check carers’ eligibility for the benefit, but continued to pay the sums anyway.

The department’s own figures show that £700m in carer’s allowance may have been overpaid over the past five years; however, the estimate is based on analysis of fraud and error rates undertaken more than 20 years ago.

Following investigations into the overpayments, the DWP is understood to be seeking hundreds of criminal prosecutions, while others face fines through civil ‘compliance action’.

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As well as any potential financial penalties, carers – who are typically on low incomes – will have to return the overpayments, which in some cases add up to many thousands of pounds.

Pritie Billimoria, of the charity Turn2us which helps people in poverty get access to benefits, said carers were already “disproportionally socially and economically vulnerable”.

“Many have completely given up their working and personal lives to care for friends or family,” said Billimoria.

“Forcing carers to pay back a possibly accidental overpayment in a radically short period should not be a welfare priority.”

Neil Gray, the SNP’s shadow DWP spokesman, said the problems with overpayments highlighted “the lack of attention ministers give to this area other than seeing it as a cash cow for Treasury cuts”.

“There is an urgent need for a full review to establish how big a problem this is, as it is clear errors will be costing carers substantially,” he said.

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“There is also a need for the eligibility criteria for carer’s allowance to be reviewed as it’s not clear that there is an income ceiling which disqualifies carers from receiving support.”

The overpayment cases involve people who have received too much carer’s allowance, often because they have had a change in their earnings or enrolled as a student.

The allowance, which is worth £64.60 a week, is paid to people who care for someone who also claims certain benefits for at least 35 hours a week.

But carers do not always realise that the sum they receive is linked to their earnings, and that if they take home more than £120 a week the allowance stops, or that studying more than 21 hours a week is a bar to claiming.

Carers have to give details of their earnings when they apply, but can be caught out when their circumstances change.

In some cases people have received £10,000 more than they were entitled to over several years.

Previously, benefit claimants’ earnings were checked at the end of every tax year and any overpayments they had received were clawed back through a reduction of the following year’s benefits.

But the DWP introduced a new system that was supposed to result in overpayments being picked up more quickly.

Instead, it seems to have made the situation worse.

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On the Carers UK forum there are recent posts from people who have been asked to attend compliance interviews about their claims.

In August, one carer wrote that she had been asked for an interview about the money she received to look after her disabled mother.

“I had no idea carers allowance was means tested etc? How come I’ve been allowed to claim for past 2 years since working? As far as I’m concerned I still care for my mother every day with or without what amount I earn?”

Another wrote that they had continued to receive payments despite reporting that they had started a job in December. They had now been asked for an interview and believed that they had received more than £2,000 in overpayments on carer’s allowance and other benefits.

The DWP did not challenge the figures when the Guardian asked for comment.

In a statement a spokesperson said: “We work to ensure claimants are aware of their responsibility to provide the correct information when making a benefit claim and reporting any changes of circumstance which may affect their claim.

“This includes informing customers of the consequences of incorrect or late reporting of information eg prosecution, financial penalty and debt implications. We are also introducing new technology to make it easier to identify and prevent overpayments and improve debt recovery.”

When it asked if the department was confident that the fraud rate accurately reflected repayments, the Guardian was told: “We use a reasonable proxy measure to estimate the amount of carer’s allowance fraud and error in the system.

“Some benefits are measured less frequently in order to concentrate our resources where they are most needed. However, we recently consulted with the public on which benefits they need us to measure and we will publish our response in due course.”

The National Audit Office found that overpayments across all benefits except the state pension had gone up last year, to an estimated £3.7bn. Inaccurate or “untimely” reporting of income was the main cause of overpayments, accounting for £1.2bn.

The government’s website says that cases will usually be referred to the Crown Prosecution Service if they meet one or more of a set of criteria that includes the overpayment totalling more than £5,000.