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Overpayments under the Universal Credit system

Read our guide to overpayments under the Universal Credit system and what to do about them.

1. What is an overpayment under the Universal Credit system?

An overpayment under the Universal Credit system is an overpayment of Universal Credit, New Style Jobseeker's Allowance (JSA) or New Style Employment and Support Allowance (ESA).

An overpayment means that you have been paid more benefit than you were entitled to.

This can happen because of a mistake when working out your benefits, if you gave the wrong information or not enough information when you made your claim, or if you didn’t tell the Department for Work and Pensions (DWP) about a change of circumstances.

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

If you think you are being paid too much benefit you should tell the Department for Work and Pensions (DWP) straight away. This is because the longer you leave it the more money you will have to pay back. 

If you aren’t sure if you are being paid too much benefit, you should talk to a benefits adviser. Use our tool to find an adviser near you
 

3. What will happen if I have been overpaid?

If you have been overpaid, the benefit office will work out how much you should have been getting. They will work out how much you were overpaid by and they will ask you to pay back the extra money you received.

The benefit office will also decide whether you need to pay a civil penalty for the overpayment.

4. Will I have to repay the overpayment?

You will always have to repay overpayments under the Universal Credit system. It does not matter what caused the overpayment.

You can still argue that there never was an overpayment.

Example

Peter’s employer made a mistake when reporting his income and because of this Peter was paid too much Universal Credit. It wasn’t Peter’s fault that the information was wrong but he will still have to pay back the overpayment.

Aaron is getting Universal Credit for two children. The Department for Work and Pensions (DWP) write to him saying he has been overpaid because he is only responsible for one child. Aaron is actually still responsible for two children. He can challenge the overpayment.

If you have been paid too much New Style Jobseeker's Allowance (JSA) or New Style Employment and Support Allowance (ESA), you can ask for the amount you have to pay back to be reduced because you would have been able to get Universal Credit. It can be hard to work out how much Universal Credit you should have been getting and you should get advice to help you work this out.

If you have been paid too much Universal Credit because of a mistake about your savings that lasted for more than three months, the amount you have to pay back should be worked out as if your savings were going down.

If you are paid too much Universal Credit because you moved house but carried on getting Universal Credit for your old house, and if you rent both homes from the same landlord, you should ask to only pay back the difference between the cost for the old house and the cost for the new house.

5. 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, such as arrears

  • Taking amounts directly out of your wages

  • Getting a court order for debt recovery.

Deductions from New Style Jobseeker's Allowance (JSA)

If money is being deducted from your New Style JSA the deduction should not usually be more than 40% of your award.

Deductions from New Style Employment and Support Allowance (ESA)

If money is being deducted from your New Style ESA, the deduction should not usually be more than 40% of your award, excluding any components.

If you are struggling to manage with the deductions, you should get advice.

Deductions from Universal Credit

If you were overpaid Universal Credit as a couple and have now separated, you should each be expected to pay half of the overpayment.

If money is being deducted from your Universal Credit to pay back the overpayment, how much will be deducted depends on your circumstances.   

If you are receiving Universal Credit and have no earned income, the maximum amount that can be deducted from your Universal Credit for overpayments is set at the 'standard rate'.

If you are receiving Universal Credit and have some earned income, the maximum amount that can be deducted from your Universal Credit for overpayments is set at the 'higher rate'.

If the Department for Work and Pensions (DWP) has decided that your overpayment was caused by fraud, the maximum about that can be deducted from your Universal Credit is set at the 'Recovery for fraud' rate.

All of these maximum amounts are monthly amounts.

You should still be left with at least one penny of Universal Credit each month after the deductions.

  Standard rate Higher rate Recovery for fraud rate
Single under 25 37.77 62.94 100.71
Single 25 and over 47.67 79.46 127.13
Couple, both under 25 59.28 98.80 158.08
Couple, one or both 25 or over 74.83 124.72 199.56

If you are struggling to manage with the deductions, you should get advice.

Deductions from wages

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.
 

6. Civil penalties for benefit overpayments

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.

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.

Challenging a decision to give you a civil penalty

If you agree that you have been overpaid, but you don’t think you should have been given a civil penalty you can challenge the decision to give you a civil penalty.

You will first have to request Mandatory Reconsideration of the decision. You have one month to request Mandatory Reconsideration. You should explain why you think you should not have been given a civil penalty. 

If the DWP do not change their decision, you can appeal to an Independent Tribunal. You only have one month from the date of the DWP’s decision on your request for Mandatory Reconsideration to request an appeal. 
 

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

If you do not agree that you have been overpaid 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 and let them know what you think they have got wrong.

If you have any evidence that can show they have made a mistake, you should send copies of it to the benefits office.