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Benefits Overpayment

Guide to Benefits Overpayments, what they are, why they happen and what you should do if you have been overpaid

1. What is a Benefit Overpayment?

This guide does not apply to overpayments of Universal Credit, New Style Jobseeker's Allowance (JSA) or New Style Employment and Support Allowance (ESA). If you have been overpaid any of these benefits, please use our guide on Overpayments under the Universal Credit system.

An overpayment of benefits occurs if you are paid:

  • A benefit you are not entitled to, or

  • More benefit than you are entitled to.

Some of the reasons why this may happen include:

  • You give incorrect information when you claim benefit

  • You do not report a change in your circumstances

  • The benefit office makes an administrative error

  • Information that you give the benefit office is not taken into account correctly.


How do I know if I have been overpaid?

You might realise that you have been overpaid because:

  • The amount you have received is incorrect

  • You have given incorrect information

  • You have not reported a change in your circumstances

You may also receive a letter from the benefits office telling you that you have been overpaid.

If you have been told that  you have been overpaid a benefit, seek advice.  You can find a benefits adviser or a legal adviser near you using our Find an Adviser tool.

2. What should I do if I think that I have been overpaid?

If you think you are being overpaid or your award of benefit is incorrect, you should notify the office paying the benefit in question of any error as soon as possible.

If you are unsure whether the amount you receive is correct, seek advice from a benefits adviser.

Don’t delay. The longer an incorrect award goes on, the bigger any total overpayment will be.

What will happen if I have been overpaid?

If the benefits office decides that your award of benefit is incorrect, they will:

  • Work out how much benefit you should have been getting

  • Work out how much you would need to pay back

  • Decide whether you will have to pay back the overpayment

  • Decide if they will apply a civil penalty

  • Tell you what your new award is and what you need to pay back.

You might get one letter telling you about the overpayment or you might get separate letters about your new award and the overpayment.

The calculation of your correct benefit, the amount overpaid, and the decisions whether it is recoverable and whether a civil penalty should be applied, will be carried out by your usual benefit delivery centre/benefit office. You have the right to appeal against one or all of these decisions if you think they may be wrong.

The Department for Work and Pensions has a number of special offices called debt recovery centres, which are responsible for collecting repayments of amounts overpaid.

3. Will I have to repay the overpayment?

This guide does not apply to overpayments of Universal Credit, New Style Jobseeker's Allowance (JSA) or New Style Employment and Support Allowance (ESA). If you have been overpaid any of these benefits, please use our guide on Overpayments under the Universal Credit system.

For benefits other than under the Universal Credit system and Housing Benefit and Council Tax Support, overpayments are only recoverable if they were caused by you misrepresenting or failing to disclose a relevant fact. These benefits include Income Support, JSA (but not New Style JSA), ESA (but not New Style ESA), Personal Independence Payment (PIP) and Disability Living Allowance (DLA).

If you have an overpayment of Housing Benefit, use our page on Housing Benefit Overpayments

If you have an overpayment of Universal Credit, New Style ESA or New Style JSA, use our page on Overpayments under the Universal Credit system

If you have an overpayment of tax credits, use our Tax credits overpayment guide.

Misrepresentation

Misrepresentation means that you have given information that is not correct or is incomplete. It may happen when you:

  • Make a claim for benefit by telephone or on a claim form

  • Fill in a form or write a letter or sign a document

  • Speak to someone at a benefit office.

The benefits office might decide that it was misrepresentation if you gave wrong information on a claim form and the award has always been incorrect.

To avoid misrepresentation, make sure that you:

  • Answer questions that the benefit office asks you correctly, checking your facts first if unsure

  • Do not ignore questions

  • Check that information is correct before you sign any form

  • Check the decision letter you receive when benefit is awarded.

Failure to disclose

A failure to disclose might apply to an award of benefit that has become incorrect because you either failed to:

  • Give accurate and complete information that you were asked to give, or

  • Report a change of circumstances that you could have reasonably been expected to know might affect your benefit.

Failure to disclose may happen where you:

  • Make a claim for benefit or complete a form

  • Speak to someone at a benefit office

  • Do not report a change which you could reasonably be expected to know affects your benefit.

To avoid failure to disclose, make sure you:

  • Answer all questions the benefits office ask you accurately and completely

  • Read all letters from the benefit office

  • Read leaflets sent to you about your benefits

  • Note the changes that you must report

  • Report any changes which you think may affect your benefit.

What if I did not misrepresent or fail to disclose?

If the benefits office decides that the overpayment was not caused by your misrepresentation or failure to disclose, the overpayment will not be recoverable and you cannot be made to repay it.

No civil penalty can be imposed if the overpayment is not recoverable.

However, even if an overpayment is not recoverable, the benefits office may ask in their letter whether you want to pay it back anyway. If this happens, seek advice from a benefits adviser. You can use our Find an Adviser tool to find a local one.

Please note: Your duty to report changes of circumstances is set out in the letters awarding benefit to you. If, for some reason, you were not notified of your obligations, an overpayment may not be recoverable.

For example, if you are visually impaired and asked the Department for Work and Pensions (DWP) to provide letters and leaflets about your benefits in large print but you only ever received letters in ordinary text. You may be able to argue you were not properly notified of your obligations to report specific changes of circumstances.

Please note: As part of the Welfare Reform Act 2012 changes, all overpayments of Jobseeker's Allowance (JSA), Employment and Support Allowance (ESA) and housing costs paid with Pension Credit and Universal Credit will be recoverable, whatever the cause of the overpayment. However, the Government has not yet set a date for this rule to come into effect.

Will I always have to repay if I misrepresented or failed to disclose?

Even if an overpayment is recoverable, the benefits office can decide not to seek recovery or may accept partial recovery.

You can ask the debt recovery centre not to recover or to accept a lower rate of repayment. They are unlikely to agree unless you can show that you did not know that you were being overpaid and that it is very difficult for you to repay. You should contact the office shown on the letter you have received about the overpayment recovery to discuss this. We also recommend that you seek advice from a benefits adviser. You can use our Find an Adviser tool to find a local one.

Can I be made to repay my partner’s overpayment?

Overpaid benefits can only be recovered from the person whose misrepresentation or failure to disclose caused the overpayment and cannot usually be recovered from anyone other than the claimant.

If, however, you or your partner are overpaid the following benefits and you were a couple at the time of the overpayment, it may be recovered from either partner's ongoing benefit as long as you remain a couple:

Seek advice from a benefits adviser if you are asked to repay your former partner’s overpaid benefit. You can find an adviser near you using our Find an Adviser tool

4. How is an overpayment recovered?

When you have been overpaid benefits, the repayments can be taken from you by:

  • Making deductions from your benefit payments

  • Taking it out of benefits that are owed to you

  • Taking amounts directly out of your wages

  • Getting a Court order for debt recovery.

If you are receiving benefits, any overpayment is normally repaid by reducing your benefit payments. Overpayments can be recovered from most benefits you may be getting.

There is a maximum rate of deduction from:

The maximum deduction from these benefits is £11.10 a week or £29.60 a week where the overpayment was due to fraud or you have agreed to a civil penalty. See our Fraud Investigations guide.

The maximum deduction from Universal Credit depends on your circumstances, whether you are working and whether the overpayment is from overpaid hardship payments. 

There is no maximum deduction from other benefits, but you can always try to negotiate a lower rate if the amount the Department of Work and Pensions (DWP) ask for is too high.

The maximum amount that can be taken out of your wages depends on how much you earn and whether you have been found guilty of an offence. You are usually left with at least 60% of your net earnings. 

If the benefits office is not able to recover the overpayment from your ongoing benefit payments or your wages, you will be asked to repay the amount in full or to make a repayment plan.

If you do not repay, you may face court action. This must usually begin within six years after the date of the recovery decision.

If you are threatened with court action, you should get benefits or debt advice immediately. You can use our Find an Adviser tool to find an adviser near you. 

What if I can't afford to repay?

You would not normally be expected to make repayments if this would leave you without enough money to meet your basic living costs. You would usually need to provide a financial statement to show that you cannot afford to repay. Use our Find an adviser tool to find help to draw up your financial statement.

Even if the benefit office agrees not to recover for the time being, they may contact you again or start recovering from your benefit at a later date.

If you have been overpaid a benefit and can’t repay, you should seek advice as soon as possible.

Updated April 2019

5. Civil Penalties for benefit overpayments

Since 1 October 2012, the Department for Work and Pensions (DWP) have the power to impose a fixed rate civil penalty on some claimants who have been overpaid a social security benefit.

The civil penalty is £50. It will be added to the total amount of the overpayment and will be recovered by the same method. For each overpayment, only one civil penalty can be applied.

These rules on civil penalties only apply to benefits and not to tax credits.  

When can a civil penalty be applied?

For a civil penalty to apply the overpayment must:

  • have occurred wholly after 1 October 2012, and

  • be an amount of £65.01 or more, and

  • must be recoverable.

The overpayment of benefit must have been caused by a person:

  • making an incorrect statement, or

  • negligently giving incorrect information,

and

  • that person not taking ‘reasonable steps’ to correct the error.

A civil penalty will not be applied if the DWP decides to take action under benefit fraud provisions. See our Fraud investigation guide.

What circumstances may lead to a civil penalty?

DWP decision makers have issued guidance on how to decide when it may be appropriate to impose a civil penalty. This gives examples of the sorts of factors a DWP decision maker should consider when deciding whether to impose a civil penalty.

These include:

  • A decision maker should only apply a penalty when they are satisfied that a person has ‘negligently’ given incorrect information or failed to disclose information that they are aware of. The guidance defines 'acting negligently' as “acting carelessly, not paying sufficient attention to the task in hand, or disregarding the importance of what is required to be done ... “.

  • The person must have failed to take ‘reasonable steps’ to correct the error. The guidance advises that this means “sensible or practicable actions or interventions to correct the error”. What is considered to be reasonable will depend a great deal on the specific circumstances of each case. It will be important to make sure that the decision maker is aware of all the relevant factors which may have resulted in an incorrect statement being made. Also, that they know of any reasons why that person may not have been aware it was incorrect or been able to obtain any more up-to-date information.

  • A penalty should not be applied if the person has a ‘reasonable excuse’ for their failure to provide the correct information or for providing it late. The guidance gives the example of a person who has not been able to obtain up-to-date confirmation of the amount of their occupational pension from their pension provider.

Making a decision

The decision to impose a civil penalty will be made at the same as the overpayment decision. When the DWP realises you may have been overpaid benefit, they will look again at your award and make a decision with the corrected award of benefit for the period that the overpayment applies. At the same time they will decide whether the overpayment should be recoverable from you. Only if the overpayment is recoverable will they go on to consider whether a civil penalty should be applied. 

You will get a decision letter that states:

  • that you have been overpaid an amount of benefit and explains the period of the overpayment, the weekly amount of the incorrect payment and the total amount overpaid

  • whether the overpayment is considered recoverable from you,

  • if a civil penalty will be applied.

If you disagree with any [or all] of these aspects of the decision you can appeal. If you appeal against the decision to apply a civil penalty you will need to show that your actions were reasonable in your specific circumstances.    

Couples

Where benefit is paid jointly to a couple, a civil penalty can be imposed on either partner or on both partners jointly. However only one penalty can be imposed for each overpayment.

If one partner was unaware, and could not reasonably be expected to be aware, that their partner had made a negligently incorrect statement, then no penalty can be applied to that person, but a penalty may be applied to their partner.

Appointees and other people who help with claims

A civil penalty can be imposed on any person who has made a negligently incorrect statement in connection with a claim for benefit. If you have helped another person make a claim or if you are an appointee for them, it is possible that you may be responsible for the civil penalty, even if the actual overpayment of benefit is the responsibility of the benefit claimant

6. What if I don't think I've been overpaid?

With all benefits, if you do not agree that you have been overpaid or do not think that this should be recoverable from you, you can ask for this to be looked at again and appeal against the decision. See our Challenging Decisions information.

The decision letter about the overpayment should include a breakdown of:

  • How much you were overpaid each week

  • For what period you were overpaid

  • The total that has been overpaid.

If you think the benefits office may have got the amounts or the dates wrong, you should contact them.

7. How do I avoid an overpayment of benefit?

There are a number of ways you can help to avoid the risk of an overpayment:

  • Make sure that you provide accurate information and answer questions correctly when you make a claim; answer questions from the benefit office; or report a change in your circumstances

  • Read letters and leaflets carefully. For example, check that your details are correctly recorded on your benefit award notice. Read the letters and leaflets that come with your award notice carefully to ensure you know what changes to your circumstances you need to report to the benefits office

  • Report changes in your circumstances as soon as you know about them

  • Report any unexpected or duplicate payments of benefit you receive to the benefit office.

8. What if I am overpaid Housing Benefit or Council Tax Support?

Most overpayments of Housing Benefit or Council Tax Support are recoverable.

However, they are not recoverable if:

  • It was caused by ‘official error’ (this means an error by the local authority, the Department for Work and Pensions (DWP) or HM Revenue and Customs (HMRC)), and

  • You did not contribute to the error, and

  • You could not reasonably have been expected to know that you were being overpaid.

Any overpayment of Council Tax Support credited to your Council Tax account for a future period is always recoverable.

Overpayments may be recovered from the person who received the overpayment or a person who caused the overpayment.

If the overpayment was paid to your landlord, seek advice from a benefits adviser if the local authority try to recover this from you as this may not be correct.

How are Housing Benefit and Council Tax Support overpayments recovered?

An overpayment of Housing Benefit (HB) or Council Tax Support (CTS) may be recovered by:

  • Deduction from your on-going benefit, which is the usual HB overpayment recovery method. If the overpayment was made while you were a member of a couple, the overpayment may be recovered from benefit paid to you or your partner so long as you remain a couple

  • Adjustment of your rent account if you are a local authority tenant (HB)

  • Adjustment of your Council Tax bill or your Council Tax account, which is the usual way of recovering a CTS overpayment

  • Deduction from other benefits: if you are no longer receiving HB, the local authority may ask other benefits offices, such as the DWP, to recover by deduction from other benefits. But only if the overpayment was due to your misrepresentation or failure to disclose

  • Direct recovery from you if the local authority is not able to recover the overpayment from on-going benefits. In this case, the local authority would write to you asking you to repay or contact them to arrange repayment

  • Court action: this must normally begin within six years of the decision that the overpayment is recoverable. Get advice if you are in this situation

  • The local authority do not have to recover in every case and may agree to reduce or write off the overpayment in exceptional circumstances.

Civil Penalties

The local authority has the same power to impose a civil penalty as the DWP. If the local authority decides that an overpayment should be recoverable, they will also need to decide whether the overpayment resulted from your negligence in providing incorrect information and whether you have a reasonable excuse for your failure to provide correct information. 

How do I challenge a Housing Benefit or Council Tax Support overpayment decision?

If you do not agree that you have been overpaid, or do not think that this is recoverable from you, you can ask for this to be looked at again and appeal against the decision. See our Challenging Decisions information.

If the overpayment is recoverable from you, there is no right of appeal against the local authority’s discretion to recover, but you can make a complaint if their decision is not reasonable.

Avoiding overpayments of Housing Benefit and Council Tax Benefit

Updated: April 2019