- Document Cover
- Summary of recommendations and observations
- Executive summary
- 1. Introduction
- 2. Aims of Carer Support Payment
- 3. Policy changes from Carer’s Allowance
- 4. Employment and earnings
- 5. Carer’s Allowance Supplement
- 6. Older carers
- 7. Future Changes
- 8. Regulations: areas for clarification
- 9. Approach to scrutiny
- Annexe A: External stakeholders
- Annexe B: Scrutiny timeline
- Annexe C: About the Scottish Commission on Social Security
4. Employment and earnings
Carers in paid work can earn up to a set threshold, currently set at £139 a week (draft regulation 14). If earnings are below the threshold, the full amount of CSP is paid. If earnings are above the threshold, the award is set to £0 (draft regulation 23).
The way that earnings are calculated for CA is complex.1https://www.legislation.gov.uk/uksi/1996/2745/made Ideally, they would have been simplified for the launch of CSP.2An Upper Tribunal judge trying to make sense of the regulations previously said they would ”benefit from being reconsidered, if not redrafted.“: https://administrativeappeals.decisions.tribunals.gov.uk/Aspx/view.aspx?id=2580 However. the Scottish Government has told SCoSS that it was not “possible to make significant changes while maintaining our commitment to mirror Carer’s Allowance and protect safe and secure transfer.”3https://socialsecuritycommission.scot/current-work/the-carers-assistance-carer-support-payment-scotland-regulations-2023/draft-carers-assistance-carer-support-payment-scotland-regulations-2023-further-update-from-scottish-government/
From a short SCoSS survey of stakeholders,4Draft regulations on earnings were provided late in the scrutiny process so were not included in SCoSS’s initial consultation with stakeholders draft regulations in Schedule 2 appear to have met the Scottish Government’s intention to mirror the CA rules. However, stakeholders would have welcomed some simplification of the rules but were unsure of the extent to which this was possible. They noted that any simplification would need to consider the impact on passported benefits.
The earnings threshold and complicated earnings rules have consequences for carers and for the administration of CSP.
Administering an earnings test is inherently complicated. Social Security Scotland staff will need to develop skills quickly. The Scottish Government has said that the complexity of the process means there will need to be a mix of automated systems and processes, and manual client adviser processes e.g. manual processes for cases with fluctuating earnings or earnings from self-employment.5Scottish Government response to SCoSS question, April 2023 Staffing will need to be at adequate levels to cope with the complex manual processes.
Recommendation 9: Given this is the first time that Social Security Scotland has administered an earnings test, the Scottish Government should detail plans to learn lessons so that any problems can be quickly identified and addressed, and improvements implemented in future benefit development including a review of staffing requirements.
Overpayments are more likely to occur with CSP than other Scottish benefits. Systems need to be designed to reduce the risk of overpayments, reduce the impact on carers of recovering overpayments from them and ensure carers have the right to appeal against recovery.
There are lessons to be learned from recent experience of overpayments of CA. In 2019, the UK Parliament’s Work and Pensions Committee carried out an inquiry following an investigation by the National Audit Office that highlighted overpayments of CA being recovered from 80,000 carers (in the period between 2016-2019) totalling around £150 million. The Committee noted that, in theory, the DWP should be spotting these errors, “because it has access to data about carers’ earnings from HMRC”. The Scottish Government will also have access to information from HMRC (data on the amount of taxable pay, payment date and frequency).6Scottish Government response to SCoSS question, April 2023 While many overpayments were for short periods of time, in some cases overpayments continued for more than a decade before they were discovered. Most overpayments arose because carers failed to notify the DWP about their earnings. By value, around 70% of overpayments are because carers’ earnings are over the earnings limit.7https://www.nao.org.uk/wp-content/uploads/2019/04/Investigation-into-overpayments-of-Carers-Allowance.pdf
The Work and Pensions Committee’s inquiry heard evidence that repaying overpayments can cause carers significant distress and anxiety and recommended a case-by-case review on whether overpayments were worth pursuing given the cost for the DWP and the impact on the carer and cared for person. Carers have also highlighted that communication from the DWP about their obligations in this regard is limited and should improve. The Work and Pensions Committee also concluded that the design of CA itself – including the “cliff edge” earnings limit – had been a contributing factor leading to overpayments.
With CSP rules being very similar to CA rules, there can be little doubt that confusion over earnings rules and overpayments will also be a feature of the system in Scotland. It may be possible in the future to simplify CSP rules and in doing so not only lessen the risk of overpayments but also reduce the extent to which CSP acts as a barrier to carers exercising their right to take paid employment if they choose. The Scottish Government has already consulted on proposals to increase the earnings threshold and introduce a ‘run on’ of support when earnings go over the threshold. However, these proposals are being considered for the future after case transfer is complete.8Scottish Carer’s Assistance consultation: https://www.gov.scot/publications/social-security-scottish-carers-assistance-consultation-scottish-government-response/documents/
Meanwhile, there are other ways to reduce the number and size of overpayments, to lessen the impact of recovery on carers and to avoid carers falling out of the system when earnings go over the limit.
“I got backdated wages in Nov, then a training day in Dec which took my earnings [over the limit] so my claim was stopped. Sent away my pay slips for Nov, Dec, Jan and Feb to show wages are back to “normal” but still haven’t heard anything. I would definitely be entitled to it again in April anyway but haven’t heard anything.”9Participant at SCoSS carers event, 4 May 2023
Recommendation 10: Avoid overpayments developing, Social Security Scotland processes must respond quickly to changes in earnings identified through HMRC data feeds, and changes reported directly by individual carers.
The Scottish Government has already taken a step to simplify the process for carers whose earnings go over the limit. Draft regulation 23 introduces nil awards (see section 3.4 above) which removes the requirement to reapply for CSP in most cases when earnings fluctuate above and below the earnings threshold. This is a welcome improvement from the launch of CSP.
Stakeholders highlighted to SCoSS the importance to carers of clear, specific information so they understand their options.
There must be “effective information ensuring that unpaid carers are informed about all options for reducing their earnings below the threshold, including adding additional amounts to their occupational/personal pensions where possible”.10National Carer Organisations response to SCoSS call for evidence, May 2023
Recommendation 11: The Scottish Government should work with carers to develop clear, easy to follow information so that carers can understand whether their earnings are below or above the earnings threshold. Information should be in a range of accessible formats and available from services and in locations where unpaid carers attend. This should include specific reference to how earnings are calculated.
The majority of carers on CSP will also be on Universal Credit. They need to know how their UC is affected when a CSP award is set to £0 (the DWP should stop deducting its value from the UC award but continue paying the carer element). Although carers are responsible for notifying the DWP of relevant changes in CSP that effect UC entitlement, it is very important to avoid overpayments and underpayments of UC that Social Security Scotland shares data with the DWP so that relevant changes are reported automatically.
Recommendation 12: The Scottish Government sets out the systems it plans to have in place to share data with the Department for Work and Pensions to ensure relevant changes in Carer Support Payment awards are quickly and accurately reflected in Universal Credit awards.
Although individuals can ask for a redetermination and appeal if CSP entitlement ends or changes to a nil rate, currently there is no right to appeal against the separate decision about whether or not the person is liable to repay the overpayment. The Scottish Government has consulted on proposals to introduce this right of appeal. All respondents agreed that they should do so.11Pg 4: https://www.gov.scot/publications/consultation-analysis-scotlands-social-security-system-enhanced-administration-compensation-recovery/pages/4/ SCoSS also agrees that people should have these appeal rights which is in accordance with principle (b) that “social security is itself a human right and essential to the realisation of other human rights”. The right to social security12Article 9 of the International Covenant on Economic, Social and Cultural Rights also includes an implied right to due process where benefits are withdrawn or reduced, which could include this kind of reduction.
Recommendation 13: Appeal rights should be introduced against the recovery of overpayments.
The DWP writes off overpayments below £65.13https://publications.parliament.uk/pa/cm201719/cmselect/cmworpen/1772/1772.pdf There will be a level below which it is not cost effective to pursue overpayments. Given that overpayments are usually the result of misunderstanding the rules and accidentally accruing overpayments,14https://www.nao.org.uk/wp-content/uploads/2019/04/Investigation-into-overpayments-of-Carers-Allowance.pdf writing off small sums would seem a defensible policy in the public interest.15Overpayments which organisations decide not to pursue are subject to the guidance in the Scottish Public Finance Manual, Losses and Special Payments (www.gov.scot); Any decision not to pursue recovery, or not to pursue recovery in full, should be defensible and in the public interest, the Scottish Public Finance Manual, Overpayments (www.gov.scot)
Recommendation 14: The Scottish Government should consider writing off small sums of overpaid Carer Support Payment.
Some carers consider that self-employment offers them more flexibility to combine work and caring than working for an employer.16Feedback from participants at SCoSS roundtable, May 2023 Around 6% of unpaid carers have income from self-employment.17 Family Resource Survey, Care table 5.5 (www.gov.uk) not broken down by whether carer received Carer’s Allowance
Self-employed carers whose earnings are over the weekly threshold, currently £139, will not be entitled to CSP. CSP provisions for calculating self-employed earnings (paras 10 to 13 Schedule 2 of the draft regulations) are intended to be the same as for CA. Under the rules, earnings are averaged over a year, unless the self-employment is recent, or there has been a relevant change, when there is discretion to consider a different period.
Data from HMRC will only be available on employed earners not on self-employed earners. Therefore, carers who are self-employed will need to report their earnings themselves and supply evidence of income and expenditure. There will be planned reviews of earnings for self-employed carers and fixed-term awards (allowed under draft regulation 25(3)(a)) to reduce the risk of overpayments. This will be done annually for carers who have been self-employed for a year or more or more frequently when required given the individual clients’ circumstances.