HMRC ‘is taking a punitive approach’ to care worker back-pay issue

The Voluntary Organisations Disability Group says there is a lack of clarity with the scheme to make care charities give sleep-in staff back pay within 15 months

A charity representing more than 80 voluntary sector and not-for-profit disability and care organisations has accused the government and the taxman of taking a punitive approach to charities over the back-pay issue for sleep-in care workers.

The Voluntary Organisations Disability Group accused HM Revenue & Customs of “bullish tactics” and of sending “ultimatum letters” that give organisations 30 days to sign up to a voluntary scheme drawn up by the government to resolve the issue.

The VODG said there was a lack of clarity around the scheme, making it difficult for its members to decide whether they should sign up.

Sleep-in care workers, who are widely used in the sector to care for vulnerable adults, were typically paid a flat rate of between £35 and £45, with workers receiving either the national minimum wage or the national living wage for any hours actually spent providing care rather than being asleep, according to VODG.

But in the wake of two employment tribunal decisions from last year, the government changed its guidance to ensure that the national minimum wage applied to sleep-in carers for the entirety of the time they are present.

Mencap estimated in the summer that the back-pay bill could cost the sector £400m and bankrupt many social care charities and providers.

Earlier this month, the government and HMRC published details of a scheme that gave providers a year to identify what they owe and a further three months to pay off the arrears.

But charities criticised the announcement, with Mencap saying that organisations signing up to the scheme could be “writing their own suicide notes”.

They want the government to foot the bill because they believe the issue has arisen as a result of the government providing incorrect guidance on the matter.

In the VODG statement yesterday, Steve Scown, chair of the organisation, said: “There are too many unresolved questions for providers to make an informed decision as to whether to join the government’s compliance scheme.

“In the absence of answers, and funding to cover the back-pay bill, HMRC’s approach and the timeframe it is imposing is unhelpful to a sector that is at full stretch financially.”

The chief executive of one disability charity, who did not want to be named, said: “This appears to be a concerted and planned campaign by government to undermine the sector when a constructive, not punitive, approach is needed.

“At a time when we need more funding for social care, the sector is instead being hammered by the HMRC, intent on taking away resources from the sector.”

An HMRC spokesman said the government had consistently made it clear that all employers were expected to pay workers according to the law. 

“The social care compliance scheme is designed to maximise the prospects of workers being paid arrears owed to them, while at the same time protecting existing jobs and the stability of the sector,” he said. 

“HMRC is engaging with the sector to help providers consider whether they are eligible for the scheme. As part of this we have contacted all social care providers who were already subject to a National Minimum Wage investigation at the scheme’s launch and where we have received a worker complaint.”

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Better Lives: Winter 2017 issue now available

Posted: 7th November 2017

Our latest issue of Better Lives magazine focuses on the support we offer to children and young people; making sure they don’t miss out and helping them to reach their potential.

Studies show that child poverty has long lasting effects on both educational attainment and health, well into adulthood. Our help ensures that even when families are struggling to make ends meet, children are able to live happy healthy lives.

Inside Better Lives

  • Meet the young people we have supported through university and find out what they’re doing now.
  • Find out how our TalentAid scheme is helping to nurture exceptional talent.
  • Learn more about Prostate cancer in our exclusive interview with Professor Colin Cooper who is leading revolutionary research funded by our £1 million grant.
  • Meet Masonic home resident, Mary, to find out about life in a dementia support house.

Take a look at the latest issue of Better Lives >>

Get in touch

If you have any comments, suggestions or questions about Better Lives, please contact the editor, Rachel Jones, at [email protected]

Additional copies of Better Lives can be ordered through our publication order form.




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Back-pay issue threatens care sector ‘as never before’, says Mencap chair

Derek Lewis says government should foot the bill to give back-pay to overnight sleep-in support workers, which could cost some charities up to £50,000

The learning disability sector is “under threat as never before”, according to Derek Lewis, chair of Mencap.

Lewis spoke out today as part of the sector’s continuing dispute with the government over who should fund £400m of back-pay for care workers that provide overnight sleep-in support.

Mencap has claimed that, besides the threat posed to charities that employ sleep-in carers, the issue could also affect up to 100,000 families who pay for sleep-in support through personal care budgets. Some, it says, might face bills of up to £50,000.

The row has been simmering for several months after the government changed its guidance on sleep-in care workers. Until recently, most overnight care workers received a flat rate of £35 to £45, according to the Voluntary Organisations Disability Group, which represents charities that provide services to people with disabilities.

But after two employment tribunal decisions, the Department for Business, Energy & Industrial Strategy changed the guidance to say staff should be paid the national minimum wage. Sleep-in staff are now eligible to claim for loss of earnings dating back six years.

Mencap began paying the national living wage in April, but Lewis said it would “cause us severe problems” if it had to foot the bill for six years of back pay. He warned that a number of major care providers could collapse unless the government stepped in.

Ministers, said Lewis, had previously issued incorrect guidance and the government should therefore pay. “For a government that spent £780.3bn in the 2017 fiscal year, £400m doesn’t seem like much to ask,” said Lewis.

He said families and care workers were suffering growing uncertainty and anxiety while the issue remained unresolved. Charities also faced uncertainty, he said. Voluntary organisations account for about 60 per cent of the 200 care organisations affected by the ruling.

“The learning disability sector is under threat as never before,” said Lewis. “For Mencap, it is the worst crisis that the charity has faced in its 70-year history.

“About 178,000 people across the UK have serious learning disabilities and depend on the care that charities like Mencap provide.

“At Mencap, we worry about the effect that this is having on our staff, families and the people we care for. Our care workers do a fantastic job and we want to pay them fairly. Since April we have been complying with new government guidance and paying the national living wage, but trying to fund six years of back pay would cause us severe problems”.

Last month BEIS announced “exceptional measures” to “minimise disruption”. These included temporarily suspending HMRC enforcement action over payment of sleep-in shifts until 2 October and waiving historical financial penalties against employers who underpaid workers for sleep-in shifts before 26 July. But organisations still face the prospect of having to find £400m after 2 October.

A statement from BEIS said: “The government will continue to look at this issue extremely carefully alongside industry representatives to see how it might be possible to minimise any impact on provision of social care, and ensure that action taken to protect workers is fair and proportionate.”

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