Martin Lewis says 1p DWP carer cap update 'good & important' and adds 'we must change'

People registered as carers can claim £80 a week - but if they go 1p over the weekly earnings cap their money is taken away

Martin Lewis has said ‘bravo’ after the government said it was reviewing how carers are having their entire allowance taken away even if they earn 1p over the limit. People registered as carers can claim £80 a week - but if they go over the weekly earnings cap £151-a-week they currently have it all taken away from them.

Campaigners including personal finance expert Martin Lewis have been pressing for it to change. Today Work and Pensions Secretary Liz Kendall announced a review on X and said: “Family carers deserve to be valued for all they do. That’s why I’ve launched an independent review to find out what went wrong on Carer’s Allowance & ensure it never happens again. I’m delighted former @DisRightsUK chief executive @lizsayce will lead this.”

The news was greeted by Martin Lewis who said: “Bravo @leicesterliz. This is good & important. Carers being penalised by losing all their £80 allowance for going just a penny over the earnings threshold, has led to a broken system so some of the vulnerable families arw asked to repay £1,000s for earning just a few quid over.

“Yet pls go beyond just looking at the claw back. We must change the carers allowance cliff edge, where you lose all of it, and turn it into a taper, which is how almost all other benefits work. (Nb This is something I wrote in my open letter to the Chancellor for the budget)”

At Prime Minister’s Questions today Prime Minister Sir Keir Starmer vowed to look into carers’ allowance overpayment and “put it right”. At PMQs, Liberal Democrat leader Sir Ed Davey said: “Can I welcome the news that ministers are going to review the carers’ allowance repayment scandal after campaigns by carers’ organisations, The Guardian newspaper and the Liberal Democrats, culminating in our motion on the order paper today?

“But will he agree with me that the evidence needed for the review is already long established and many of the decisions self-evident? So will he and his colleagues vote for our motion today so we can write off the overpayments, we can end the crazy cliff-edge to the earnings limit now and have a fuller review for the support that carers deserve?”

Sir Keir replied: “I thank him for raising this. This is obviously a really important issue affecting a number of people and that’s why we’ve launched an independent review into the carer’s allowance overpayments to look at the circumstances of the overpayments to see what went wrong and therefore what can be done to put it right because carers must get the support that they deserve.

“So I’m grateful for him for raising it. I’m glad we’ve been able to take this action today to go forward on a really important issue.” Following up, Sir Ed said: “Can I thank the Prime Minister for that answer and ask him that ministers in the review will listen to the voices of carers throughout?”

Sir Ed added that the majority of cases of carer’s allowance overpayment can be “written off immediately”.He told the Commons: “I’d like to ask the minister if she can reshape the review she’s announced, because it does seem to me, self-evident that the vast majority of overpayments of carer’s allowance should be written off immediately.

“Now I accept there may be a few cases of genuine fraud where that wouldn’t be appropriate, but the DWP (Department for Work and Pensions) shouldn’t be persecuting tens of thousands of carers whose overpayments were caused by the crazy cliff edge in the current carer’s allowance system, and the DWP’s own incompetence in failing to notify them of overpayment immediately.”

He added: “As our motion says, we need to go further for carers in these obvious and relatively simple decisions. The Government should conduct a full-scale review of all support to carers so we can make it easier for them to carry on caring and juggle caring with work. That’s better for them, it’s better for their loved ones, and it’s better for our economy. So I urge the House tonight – pass this motion, and let’s not allow carers to be forgotten and ignored any longer.”

Later on, opening the first debate of the party’s opposition day, Sir Ed said: “For carers who can receive carer’s allowance, which doesn’t include young carers, carer’s allowance is a lifeline. It’s the main financial support that’s available, but frankly, as the main way that we support family carers I’m afraid carer’s allowance just isn’t fit for purpose.”

He added: “At just £81.90-a-week, carer’s allowance is the lowest benefit of its kind. So for someone doing 35 hours of caring a week, which is the minimum period for eligibility, that’s just £2.34-an-hour. But it’s not just the low rate of the carer’s allowance that worries me. It’s the fact that the eligibility rules are inflexible and very badly designed.

“Chief amongst them the earnings limit of £151-a-week, even for someone on the minimum wage, that’s just 13 hours and 20 minutes-a-week, and the earning limit operates like a cliff edge.” Sir Ed further stated: “So it acts as a significant barrier to work, a major disincentive to work, and it means carers on low incomes can’t work a bit more just to help make ends meet. So it’s bad for them, it’s bad for the person they’re caring for, it’s bad for their employers, and it’s bad for the economy.”