To put things into perspective, a study by Petrillo and Bennett (2023) found that unpaid carers save UK the economy around £162 billion each year – for context, in 2021, the entire NHS budget in England and Wales was £164 billion. Unpaid carers are the unsung heroes of the British health and social care system.
It’s a sad fact then that the heroic efforts they go to for their dependents, and the savings they make to the state, are not reflected in their financial wellbeing as found by a recent report published by Carers UK and Abrdn Financial Fairness Trust. 1.2 million carers in the UK live in poverty, while 400,000 live in ‘deep’ poverty, where their income is so low they are 50% or more over the poverty threshold.
We’ll think first about the cause of the scandal around DWP benefit overpayments to carers centres on the earnings threshold and the DWP notification that a person working is earning over this. Carers Allowance currently has an earnings threshold of £151 per week, meaning that as soon someone earns even a penny over this, they lose their full entitlement to Carers Allowance (currently paid at a rate of £81.90 per week). When a person breaches that threshold the DWP/HMRC do receive real-time notification that that threshold has been breached and theoretically, should be stopping a person’s claim. Part of the reason that this has caused such scandal is that, often, they do not do anything after receiving that notification and continue to pay a person CA before eventually chasing them for that overpayment.
Governments of all stripes have said that work is the way out of poverty – unfortunately, we at Society Matters and our parent charity Citizens Advice Gateshead know that isn’t always the case. For carers particularly, full time work may simply not align with the demands of their caring role. But even when we consider part time work, the system can seem stacked against carers. £151 per week threshold equates to just 13 hours a week working at minimum wage for someone 21 or over. Typically, the earnings threshold rises in line with broader benefits uprating each April – last April, in line with other benefits it rose 6.7% from £139 to the current £151. However, last April the minimum wage rose by 10.8% meaning that those working and claiming Carers Allowance were increasingly facing that financial cliff edge, perhaps even reducing their hours to ensure they maintain their entitlement to what is one of the lowest-rated carer benefits in Europe. Over 60% of carers are stressed about the impact of caring on their finances, a third report cutting back on essentials, a fifth cut back on food. The system should not be designed to actively encourage people to forgo a chance at maximizing their income to stay in poverty.
One of the key criteria for claiming Carers Allowance is that you must be providing care to that disabled person for at least 35 hours a week – a full time job in its own right. At a rate of £81.90 per week, that means that the carer is being paid the equivalent of £2.34 per hour. Should we be shocked that carers are struggling to make ends meet, if caring is taking up so much of their time and they receive so little financial support? The report mentioned earlier published by the Carers Trust found that among those caring for more than 35 hours a week, the poverty is rate is double that of people without caring responsibilities. Again, is this any wonder when support from the state seems so threadbare?
On the back of this, the report makes several recommendations – for example, increasing the earnings threshold to the equivalent of 21hrs at the national minimum wage (currently £240.42) and, crucially, pegging future increases to the rates of the national minimum wage. This would mean carers could tangibly increase their income without risking the loss of their benefit entitlement. A survey by the Centre for Social Justice found that 60% of working-age carers felt they could return to work with the right support; imagine the transformative impact that could have on a carer’s wellbeing, finances and even the wider economy if the state was only able to provide that support.
The report also calls on the government to consider uplifting the rate of Carers Allowance to lift carers out of poverty. By nature of their caring responsibilities, many carers are far more reliant on state welfare benefits and so the answer must come from the state. The report models various rates, but even doubling the rate of CA (bringing it more in-line with Statutory Maternity Pay) would lift 20,000 carers out of poverty/deep poverty.
Whilst still in opposition, the Labour Party (now government) committed to a review of the Carers Allowance system. Any chance at reforming the system has to get to grips with its complexities, recognize the immense value of unpaid carers across the UK and help them move towards lives well lived, just as they would no doubt want for those they care for.
For more information, an executive summary of the report, its findings and recommendations can be found here. Society Matters also runs a half-day CPD-accredited course on Caring and Carers Matter covering the support available to carers in more detail. More information on that can be found here.
