O is for Overpayments

Date published: 24th December 2020

verpayment of Benefits

What is an overpayment of benefit?

An overpayment of benefit is a payment which you have received but have not been entitled to. An overpayment can happen for a number of reasons, for example because:

  • the benefit office made a mistake
  • you didn’t know you had to tell the benefit office about a change of circumstances that meant you were entitled to less benefit or should stop getting a benefit

Overpayments that occur as a result of an error on the claimant’s part are called recoverable overpayments.

Will I be informed if I have been overpaid?

When a decision maker decides that an overpayment has occurred, the relevant benefit office will write to you informing how much has been overpaid, the period of the overpayment and the reason the overpayment occurred. You should also receive a breakdown of the calculation, showing what you were paid and what you should have actually received.

The letter should also inform you of how much you must repay and how the money is to be recovered.

Can I challenge the overpayment?

Yes – You can dispute the decision on the grounds that you were entitled to the benefit or that the overpayment is not recoverable. To challenge an overpayment decision, you need to ask the relevant benefit office to look at their decision again - this is called asking for a mandatory reconsideration. You can make your request in writing or by telephone.

A decision maker will look at the decision again and decide whether to change it or keep it the same. If there is no change to the decision, you can go on to appeal against the decision.

CARF has a team of specialist Client Representation advisers who offer advice on challenging benefit decisions and may provide representation at First Tier and Upper Tier tribunals.

If you would like further information on the services the team provides, contact our General Advice line on 0345 1400 095, or Text Service for the Deaf Community 0787 2677 904, 8.30am to 4pm Monday to Friday.

What if the overpayment has occurred because the benefit office has made a mistake?

If there has been an overpayment of legacy benefits or tax credits and this was due to the benefit office making an administrative error then you cannot be forced to repay the overpayment. These are called non recoverable overpayments. The exception to this rule is overpayments of Universal Credit, new style Employment and Support Allowance (ESA) and new style Jobseekers Allowance (JSA). If you have been overpaid one of these benefits, the overpayment can be recovered regardless if the DWP have made a mistake.

Will the benefit office always recover the overpayment?

No - In some situations, the benefit office can exercise a discretion not to recover a recoverable overpayment e.g. if you have been declared bankrupt and receive no benefit, or if making repayments would result in you suffering excessive financial hardship. You would need to submit evidence to show that hardship would result from repaying an overpayment.

How does the benefit office recover the overpayment? Do I have to repay it all in a lump sum?

If you are no longer receiving benefits

The Central Recovery Group (CRG) will send you a letter which states that you must pay the whole amount within 14 days or offer reasonable instalments. You can negotiate with the CRG about how to repay the overpayment.

If you are working, the DWP can recover the overpayment by deductions from your wages. This is called a Direct Earnings Attachment (DEA).

If you are still receiving benefits

If you are receiving a different benefit, the overpayment can be recovered by weekly deductions from this benefit. This does not apply to Guardian's Allowance, Child Benefit, Child Tax Credit or Working Tax Credit.
If you are experiencing any difficulty with making repayments or are struggling with debt contact CARF’s Money Advice helpline on 0345 140 0094, or Text Service for the Deaf Community 0787 2677 904, 8.30 am to 4 pm Monday to Friday.

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