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Benefits Overpayment - What if I am overpaid Housing Benefit or Council Tax Support?

Find out more about Benefits Overpayments.

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 or HM Revenue and Customs), 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 Department for Work and Pensions (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. Seek advice if you are in this situation from a benefits adviser.

  • 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 Department for Work and Pensions (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. However, the local authority should not apply a penalty if your failure to provide correct information resulted in overpayments of more than one benefit and the DWP have already applied a civil penalty to the benefit they overpaid.

DWP guidance advises that  "Where the same error or failure affects different benefits, whilst those benefits identified may need a separate overpayment decision, for the purpose of the penalty it will be treated as one decision"

For example, if you have been overpaid Income Support which you were not entitled to and Housing Benefit was awarded incorrectly as a result of your entitlement to Income Support, only one civil penalty can be imposed.

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

  • Every time you move home, write to your local authority benefit section to let them know. If you move to a different local authority area, you will also need to make a new claim with the new authority

  • Report any changes to your household or who lives with you.

*Let your local authority benefit department know if you stop receiving Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance or Pension Credit Guarantee Credit. You will need to give details of your new income and capital

  • Be careful to report increases in earnings, other income or capital.

Reviewed: 12 May 2015

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