How to Deal with an Overpayment of Benefits

A benefit overpayment occurs when the Department for Work and Pensions (DWP), HM Revenue and Customs (HMRC), or your local council pays you more money than you are legally entitled to.

This can happen for several reasons:

• Official Error: the benefits agency made a mistake when processing your claim.
• Change of Circumstances: you didn't report a change (such as getting a job, moving house, or a partner moving in) fast enough.
• Incomplete Information: you provided incorrect details on your application form (either accidentally or deliberately).

In the UK benefits system, the rules vary depending on which benefit was overpaid:

• Universal Credit: all Universal Credit overpayments are legally recoverable, even if the overpayment was entirely the DWP's fault and you had no way of knowing you were being overpaid.
• Legacy Benefits (e.g. Housing Benefit, JSA, ESA): these are only recoverable if you misrepresented your facts or failed to disclose a material change in your circumstances. If the overpayment was purely down to an 'official error' by the office, you may not have to pay it back.

If you are still receiving benefits, the DWP will recover the overpayment by making automatic weekly or monthly deductions from your ongoing benefit payments.

The standard rate of deduction for a Universal Credit overpayment is 15% of your standard allowance (or up to 25% if the overpayment was due to fraud).

If you no longer receive benefits, the DWP's Debt Management department will write to you to arrange a monthly direct debit repayment plan. If you ignore these letters, they can instruct your employer to deduct the money directly from your wages (via a Direct Earnings Attachment) without needing to go to court.

If the DWP's proposed deductions are causing you severe financial hardship (making it difficult to buy food or cover rent), you have the right to request a reduction.