The letter arrived three weeks after Christmas, and Gai Shahar and his wife Oksana exchanged looks of stunned disbelief.
They had been following reports about a scandal linked to caregiver allowances that had left many families struggling with debts and criminal records. But they thought they were safe from it.
Reading the letter, which was marked as “important,” Gai felt a sinking feeling. “You’ve received more caregiver benefits than you’re eligible for. Now, you must pay this back,” it stated.
The sum demanded was staggering: £10,180.45.
“It felt surreal,” the 53-year-old said.
This incident was reminiscent of the post office scandal, where numerous caregivers unintentionally breached Department of Labor and Pensions (DWP) regulations and found themselves repaying hefty amounts.
Oksana, also 53, cared for their 15-year-old son Daniel, who is autistic. Alongside her part-time job as a school dinner lady, she sometimes exceeded the income threshold by just £1.92.
On a few occasions, she earned only 38p over the limit, yet this small discrepancy meant repaying £64.60 each time.
Unpaid caregivers can work as long as they stay under a strictly enforced income limit (£196 weekly). If they exceed it, they owe back caregiver allowance, even if it’s just 1p. A mere 1p over would incur a penalty of £83.30.
This so-called “cliff edge” system has faced harsh criticism, described as “cruel” and “perverse,” especially after investigations revealed how many caregivers were pushed into debt and criminal charges.
As of February, around 100,000 caregivers in the UK had repaid a total exceeding £20,000 due to breaches of these regulations.
In examining Oksana’s earnings over the last five years, it revealed that for three of those years, her income was below the strict DWP threshold. In another year, her earnings slightly exceeded the limit, resulting in a shocking annual repayment of £1,938.
Overall, she had earned just £505 over the allowable limit—an average of £1.92 per week. Instead of a simple repayment of that amount, however, the DWP demanded a staggering £10,130.45, along with an additional £50.
“This is going to destroy us financially,” Guy lamented. “It feels so unfair. Honestly, it’s hard to believe this is even real. In a fair world, something like this wouldn’t happen.”
The DWP’s failure to notify caregivers about their overpayments sooner meant that Shahar only learned of the issue this past January, nearly seven years later.
This resulted in an accumulating debt until 2023, when Shahar informed the DWP that he could take on more work at Sports Direct, leading to a halt in caregiver allowances.
In 2019, Peter Schofield, a top DWP official, promised to address the delays affecting caregivers who unknowingly racked up significant debts. Yet, this problem persists even after six years.
“They never warned us,” Guy said. “They just let it build up, and now six years later, here’s this huge fine. I feel let down by the system.”
The DWP is supposed to consider caregivers’ average income when assessing rule violations, but the application has been inconsistent.
In Oksana’s scenario, they penalized her based on her specific weekly earnings rather than her average income, which has been criticized for being inherently unfair.
“This feels like a flawed welfare system. It’s inhumane,” Shahar expressed. “It traps families in long-term debt and anxiety rather than providing proper care for those we look after.”
Welfare Secretary Liz Kendall initiated an independent review into caregiver allowances last year in response to the findings. A report from former UK disability chief executive Liz Sayas is expected soon.
Earlier this month, the DWP indicated it would increase staffing to help address a significant backlog of unpaid caregivers exceeding their income limits.
The family challenged the £10,000 fine but was denied by the DWP and is now awaiting the outcome of a second appeal.
Guy described the government’s actions as “unfair persecution,” saying it feels like their modest, fragile life is under threat.
Helen Walker, CEO of Carers UK, urged the DWP to reconsider debts in cases like this, highlighting an urgent need for significant reform.
“I’m deeply concerned to still hear about families like his falling victim to such an inflexible system,” she remarked. “This highlights why we need alternatives to this ‘cliff edge’ model.”
A DWP spokesperson stated, “We have paused Mrs. Shahar’s repayment process until her appeal is resolved. We understand the challenges caregivers face and are reviewing how these overpayments occur and what changes can be made.”
