Been overpaid benefits? What can you do?

Overpayment of tax credits or Universal Credit is a problem for many, but there is help available.

Woman holding a bill and calculator, looking worried


“Single mothers on postgraduate courses say they are being unfairly pursued by the Department for Work and Pensions [DWP] over thousands of pounds in benefits which officials claim were paid in error,”  the Observer reported this weekend.

The Observer talks to postgraduate students who have had breaks in their studies and have been asked for thousands of pounds in benefits payments back.  The Government says that most studies are funded through student loans and grants rather than Universal Credit [UC], but it apologised for any errors made.

The issue of overpayment of UC is a bigger one, though, and many parents have found themselves in the situation of having to pay back money, often because of errors made by the Government. The article cites Ruth Talbot, the founder of the campaign group Single Parent Rights, as saying: “If the DWP makes overpayments, any subsequent demands for repayments must be made in a timely, transparent, and reasonable manner. The DWP must also shoulder some of the financial burden for their own mistakes.”

According to the DWP’s Benefit Overpayment Recovery Guide, the Government has the discretion to waive overpayment recovery where appropriate. But some cases are forced to go to court. The High Court ruled in February that the DWP’s decisions to recover ‘official error’ overpayment debt from a single mum’s benefits were unlawful and that she should not have to repay the debt, given paying it back would have left her without enough money to live on a month-by-month basis. The judge ruled that the mum had done all she could to inform the DWP about her situation.

The Government says repayments need to be made for a number of reasons, including if a mistake is made in its calculations and, if a person is still in receipt of benefits, this will be taken from their subsequent payments. In this case, the maximum deduction that can be taken from UC is £11.55 a week. There is no maximum deduction from other benefits. However, Turn2us says claimants can try to negotiate a lower rate if the amount the Department of Work and Pensions (DWP) ask for is too high.

A 2021 report from the debt charity StepChange found 98% of the clients it surveyed struggled to cover essentials because of the deductions they faced for tax credit overpayment, with 59% being forced to borrow money to make up this shortfall.  It says it is vital that the Department for Work and Pensions’ deductions system catches up with best practice seen in other sectors – particularly given that the circumstances of the people subject to deductions mean that DWP “arguably cannot safely use its current approach without the risk of pushing many of those receiving support into greater hardship”. StepChange says there has been no movement on any of these recommendations since the report came out.

It’s a complex area and it can be hard to fight the system on your own and to understand what your rights are, particularly when you are struggling on a day to day basis just to get by, but there are organisations that can help, including Turn2us and StepChange.

*If you can’t afford to make payments you can contact DWP Debt Management. Telephone: 0800 916 0647, Textphone: 0800 916 0651.  Monday to Friday, 9am to 5pm.

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