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Forum Home  →  Discussion  →  Decision making and appeals  →  Thread

Overpayment of Carer Allowance and averaging of earnings (or not?)

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CRU/CARF-FIFE

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Joined: 22 April 2014

Client has been hit with an overpayment of Carers Allowance for period May 2016 to 19/12/21 as DWP have decided that her earnings have now exceeded the weekly limit. Client is contracted for 14 hours per week, is paid 4 weekly and may occasionally earn extra for working on a bank holiday or being late off shift and also her May pay always included a bonus payment. Client already has her MR decision.

It seems that the DWP have only looked at her earnings for each 4 week pay period to see if the earnings exceed the weekly limit. The amount she was paid for each 4 week period did fluctuate as, for 16/17 there were 5 different totals paid (one 4 week o/p for May pay - 4 weeks overpaid) , 17/18 - 7 different totals paid (two 4 week o/p for May pay and also a period with a bank holiday payment which took her £1.56 over the 4 week earnings limit £464 - 8 weeks overpaid) , 18/19 - 12 different amounts (three pay periods exceeded the 4 week earnings limit - 12 weeks overpaid), 19/20 - 11 different amounts (nine periods exceeded 4 weekly amount - 36 weeks overpaid) , 20/21 - 12 different amounts paid (four periods exceed 4 weekly amount - 16 weeks overpaid)  and 21/22 - 9 out of 10 payments were different before CA stopped(40 weeks paid) four periods exceed 4 weekly amount - 16 weeks overpaid. 

If the DWP had used average earnings for each tax year (as they are allowed to by SS Computation of Earnings Regs 1996 8(3),
16/17 client earned £5676.73,  less than 52 x the weekly limit £116 so potentially 4 week overpayment not applicable if yearly average earnings used.
17/18 client earned £5953.96, less than 52 x weekly limit £116 so potentially 8 week overpayment not applicable if yearly average earnings used
18/19 client earned £6167.68, less than 52 x weekly limit £120 so potentially 12 week overpayment not applicable if yearly average earnings used
19/20 client earned £6479.56, £83.56 more than 52 x weekly limit £123 so potentially increase to 52 weeks overpaid instead of 36 weeks if average yearly earnings used, would I be correct in thinking this?
20/21 client earned £6555.39, less than 52 x weekly limit £128 so potentially 16 week overpayment not applicable if yearly average earnings used
21/22 client has earned £5927.06,  more than 40 x weekly limit £128 so potentially increase to 40 weeks overpaid instead of 16 weeks, would I be correct in thinking this? 

So if average earnings are used it could potentially reduce her overpayments by 40 weeks but could also potentially increase her overpayment by 40 weeks if my understanding is correct? Which due to the different amounts of CA paid would actually increase the amount overpaid! Not good for the client!

Would it be possible to ask that earnings for each tax year can be treated differently so that the most advantageous way is given to the client or do you think they have to be consistent?

This also highlights that it is unfair that the weekly earnings limit does not keep track of the National Minimum wage although client was earning slightly more than NMW but with only doing 14 hours/week it would have allowed for fluctuations in earnings. In 2016/17 you could work 16 hours at NMW and be below the earnings threshold yet now you would be above the earnings threshold working only 15 hours/week!

I should add that I have checked payslips for any unaccounted deductions but client was normally below threshold for tax/NI.

Sorry for the long post but I have hopefully laid it out relatively clearly for people to understand the situation.
My view is that DWP/Appeal Judge need to be consistent in how they apply regs but willing to be advised otherwise as it could help the client.

Ianb
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Macmillan benefits team, Citizens Advice Bristol

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As a note - now even 14 hours at minimum wage of £9.50 is over the CA earnings threshold of of £132/week. It would indeed be so much better if CA earnings threshold was indeed linked to NMW and set at 16 hours like ESA.

Holly1989
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Social Welfare Law Unit Citizens Advice Sefton

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Hi, Sorry I can’t help answer your questions, but I am seeking advice re a similar issue hence the reason I have come across your post and wondering if you have any answers after posting this? My client has 2 months where she has earned over the allowed amount and “attempting” to challenge this. Thank you!