This guide explains what an overpayment under the Universal Credit system is and the possible ways to deal with an overpayment.

Use this guide to:

• understand why you may have a benefit overpayment;
• know how you may be able to appeal an incorrect benefit overpayment decision;
• see what options you have to deal with a benefit overpayment; and
• know how the overpayment may be recovered.

What is an overpayment under the Universal Credit system?

A benefit overpayment is money owed because you have been paid more benefits than you should have. Universal Credit overpayments are owed to and collected by the Department for Work and Pensions (DWP). 

Overpayments may occur for lots of reasons. For example: 

• the benefits office made a mistake; 

• the information you gave was wrong; or 

• you did not tell the benefits office of a change in circumstances which would have meant your benefit would reduce or stop. 

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

If you received a Universal Credit Advance but no longer receive Universal Credit, any money you owe will be recovered by the DWP as though it is an overpayment of Universal Credit. 

The DWP will contact you to tell you of an overpayment. If you don’t think the decision is right, you can challenge it. If you do owe the debt, you can usually try to negotiate repayments. 

If you have been overpaid, the DWP will be able to recover the overpayment regardless of the cause of the overpayment. So even if the DWP made a mistake in the amount they paid you, they can still look to recover the money. 

If you think the amount received is right, you can appeal the overpayment decision. See the Mandatory reconsideration section. 

Knowing whether an overpayment decision is right can be difficult to work out. If you are unsure, you can ask the DWP for a written statement of the reasons for the overpayment. You must do this within one month of the overpayment decision. If you are still unsure if the money is owed, you should contact a benefits adviser to help you. 

Mandatory reconsideration

You can appeal against an overpayment decision, by asking for a mandatory reconsideration. You need to ask within one month of receiving the decision. This is an ‘any grounds’ revision where the DWP will look again at your circumstances when they made the decision. 

If you have asked for a statement of reasons for the overpayment, the time you have to apply will extend to: 

• one month and 14 days of receiving the decision, if the DWP provide the statement within one month: or 

• 14 days of receiving the statement if the DWP have not provided the statement within one month. 

You can ask for a mandatory reconsideration through your online journal. Use your journal to provide any information that will support your case. You should also phone the Universal Credit helpline on 0800 328 5644 to tell them you have done this. 

If your Universal Credit claim has closed and you no longer have a journal, you will need to call the Universal Credit helpline on 0800 328 5644. You can also send a mandatory reconsideration request form from the GOV.UK website. (You can only do this for late applications, see the following section about Late mandatory reconsideration requests). 

After making a mandatory reconsideration request, you will receive a notice which will tell you the outcome. If you believe the decision the DWP has made is wrong, you can appeal to the First-tier Tribunal. See the First-tier Tribunal section below. 

The DWP will usually continue trying to collect the debt during the mandatory reconsideration process. 

Late mandatory reconsideration requests

If you are outside the one-month period, you may still be able to apply for a mandatory reconsideration within 13 months of receiving the decision. You need to show that there were exceptional circumstances which meant you could not apply in time. 

If your late request within 13 months is turned down by the DWP, it will still count as a mandatory reconsideration request, so you can still appeal to the First-tier Tribunal (see the First-tier Tribunal section). 

If it has been more than 13 months, you will need to show that the DWP has made a mistake to be able to apply for a mandatory reconsideration. This could be that they got the law wrong or overlooked some evidence you may have sent them. This is a ‘specific grounds revision.’ You should speak to a benefits adviser to make sure you have grounds to make a request after 13 months. 

If your late request after 13 months is refused, the DWP may say that it has not counted as a mandatory reconsideration request and so you have no right to appeal to the First-tier Tribunal. You may consider writing to the First-tier Tribunal to argue that the DWP has looked at the mandatory reconsideration request and so you are able to appeal. You should contact a benefits adviser if you are considering this. 

First-tier Tribunal

If you believe the decision the DWP has made is wrong, you can appeal to the First-tier Tribunal. You must be able to show that the DWP has looked at your mandatory reconsideration application. Send a copy of the mandatory reconsideration notice to the Tribunal when you appeal. 

If you have not received a mandatory reconsideration notice, remind the DWP that they should provide this even if they believe your claim is not valid. If you are still unable to obtain a mandatory reconsideration notice, you could still consider appealing to the First-tier Tribunal. You would need to provide evidence that you made an application.

Also supply any documents that support your appeal and a summary of why you think the DWP decision is wrong. 

• You can ask to attend the hearing when you make the application if you wish. 

• The tribunal must deal with the case fairly and justly. 

• The tribunal can ask you or the DWP for more information to help them decide. It is important to respond with the information requested. 

You can have a representative who can help present your case to the tribunal. You would need to give the tribunal written notice of this at least 14 days before the hearing. 

Time limits

You must make the appeal no later than one month after the date you get the mandatory reconsideration notice. Applications after one month can still be classed as being in time if neither the DWP nor anyone who has been added to the appeal objects. It is not common for the DWP to object, so it is worth making an application even if late. Explain why your application is late when you apply. 

Decision notice

You will get a decision notice. If you have won, the DWP should carry out the tribunal’s instructions straightaway. 

If you lose, you may be able to ask for a set aside on procedural grounds but only if it is in the interest of justice to do so.  

You may also be able appeal to the Upper Tribunal. You would need to be able to show that there has been an error of law. Speak to a benefits adviser before considering either option. 

More information on the First-tier Tribunal process can be found on the GOV.UK website. 

Fraud and civil penalties

The DWP may say you have committed fraud if you failed to tell them about something that would affect your claim or if you deliberately misrepresented information. If the DWP accuse you of fraud, you should seek legal advice as soon as possible. 

You should have a formal interview ‘under caution’ and you will get around two weeks’ notice. Use this time to try to find someone, preferably a solicitor, to sit in the interview with you. 

The DWP may ask for additional information. If you do not provide this, your benefit payments may be stopped. Your benefit may also stop while the investigation takes place. 

If you are guilty of fraud, the DWP may prosecute you. Again, if it looks like this may happen, it is important to get legal advice on your options. 

If you have not committed fraud but you gave the wrong information and did not try to correct the error, you may get a civil penalty. The overpayment will also need to have occurred after 1 October 2012 and be more than £65. The civil penalty would be added to the overpayment and recovered in the same way. 

DWP discretion to suspend or reduce repayments

The DWP can agree to suspend recovery or reduce your repayment amount. This will usually only happen if you can show that the rate of recovery will cause you or your family hardship. 

This hardship could be based on: 

• welfare grounds; 

• health grounds; or 

• financial grounds. 

You can use our sample letter to ask the DWP to suspend recovery or reduce the repayment amount. You will need to provide as much information as possible. For welfare or health grounds, this could include: 

• a letter showing exactly how recovery of the debt would have an extremely negative impact on the welfare of you and your family; and 

• a letter from a medical professional showing that your ill health is made worse or caused by financial hardship. For example, a GP, consultant, psychiatric nurse, support worker, or welfare adviser might write a letter for you. 

For financial grounds, this could include: 

• a copy of your budget sheet to show that the deduction amount is causing you financial hardship; and 

• specific examples in the letter that show the difficulties the deductions are causing. This could be that you are having to cut back or are unable to afford essentials such as energy or food. It could be that you are unable to pay your rent in full and could be at risk of eviction. Try to give as much detail as you can. 

You can ask for a suspension or reduction through your online journal if you have one. You can also write to the address on the letter. It may be useful to find a specialist benefits adviser who can help. You can try find one on the Turn2us Find an Adviser tool. 

If a suspension or reduction is refused, you do not have the right to appeal. If you think the decision made by the DWP was based on them not following the law or their own processes correctly, you could speak to a specialist benefits adviser who may be able to help more. You could also look to complain to the DWP. See the Complaint section for more information. 

DWP Discretion to waiver (write off)

The DWP can agree a waiver (write off) the overpayment. This will only happen where recovery action will result in severe welfare issues for you or your family.

The DWP will also investigate the circumstances of the overpayment. It may be in your favour if the overpayment was the result of a DWP error rather than because you gave incorrect information or did not give them relevant information. 

The DWP should consider: 

• your financial situation and that of your household; 

• whether the recovery of the debt is impacting your health or that of your family; 

• whether you can demonstrate that you did not benefit from the money that you received; and 

• any other factor that appears relevant.  

You can use our sample letter to ask the DWP to waive your debt. Provide as much information as possible. This should include the following. 

• Any evidence that the overpayment was not caused by you and any steps you took to prevent the overpayment.  

• A list of all your debts and the steps taken to manage these. 

• Full details of your income and expenditure. 

• Bank statements for the last six months. 

• Evidence that collection of the debt would have an excessive negative impact on the welfare of you and your family. 

• Evidence that your ill health will be made worse or caused by financial hardship in the form of a letter from a medical professional. For example, a GP, consultant, psychiatric nurse, support worker, or welfare adviser. 

You can ask for a waiver through your online journal if you have one, or write to the address on the letter you have received. It may be useful to find a specialist benefits adviser who can help. You can try to find one on the Turn2us Find an Adviser tool. 

If the DWP do not agree to a waiver, you do not have the right to appeal. If you think the decision made by the DWP was based on them not following the law or their own processes correctly, you could speak to a specialist benefits adviser who may be able to help more. You could also look to complain to the DWP. See the Complaint section below for more information. 

Complaint

If you are unhappy about the service you have received from the DWP, you can use the DWP’s complaint procedure. Contact the office that dealt with the decision and make the complaint. You can find relevant contact details on the GOV.UK website. 

The DWP should deal with the complaint within 15 working days. If you are not happy with the outcome, ask that the complaint is escalated to a senior DWP manager. 

If you are still not happy with the outcome, you can escalate the issue to the Independent Case Examiner within six months. You can do this by phone on 0800 414 8529 or by writing to: The Independent Case Examiner, PO Box 209, Bootle L20 7WA. 

If you are still unhappy, you could ask your MP to refer the case to the Parliamentary and Health Service Ombudsman. 

The Parliamentary and Health Service Ombudsman deals with complaints about maladministration and delays by the DWP. You can begin a complaint by completing the online form and sending this to your MP. You need to do this within one year of becoming aware of the matter. 

Recovery

Deductions from Universal Credit

Overpayments can be deducted from most benefits. As you are under the Universal Credit system, deductions tend to be 15% of your standard allowance. 

Your standard allowance is the basic amount your household will receive each month before any additional payments for things like childcare. 

If the amount deducted is causing financial difficulty, you should use your budget sheet to support asking for the deduction to be lowered. 

You should have no more than three deductions from Universal Credit at any one time and a maximum of 15% of your standard allowance can deducted. 

Direct earning attachment

Overpayments can also be deducted from your wage via a direct earnings attachment. 

You and your employer will receive a notice setting out the amount. The deduction will be a percentage of your net income (your pay after tax and deductions). You can find the amount you should have deducted on the GOV.UK website. 

If the amount taken is causing financial difficulty, you should use your budget sheet to support asking for a reduction. The DWP Benefit Overpayment Recovery Guide states that a reduced payment may be made if it is causing you hardship. 

You should not be left with less than 60% of your net earnings. This is the ‘protected earnings proportion.’ 

Court action

Whilst not common, the DWP can look to take Sheriff court action. This would usually only be done if you are no longer claiming benefits and you cannot agree a repayment plan.

See our Sheriff court action guide.

Time limit for recovery

The Prescription and Limitation (Scotland) Act 1973, updated by the Prescription (Scotland) Act 2018, sets out the rules on how long a creditor (who you owe money to) has to take certain action against you to recover a debt.

The DWP have a 20-year period to recover a benefit overpayment. For DWP benefit overpayments, time starts to run from the date a final decision was made to recover the debt.

The 20 years keeps running even if you make payments or acknowledge the debt in writing. Once the 20 years have passed, the debt does not have to be repaid because it no longer exists.

If the DWP or HMRC obtain a decree they will have 20 years to use diligence to recover the debt.

To find out more about diligence, see our Diligence guide.

Useful contacts

GOV.UK for information on finding legal advice www.gov.uk/find-legal-advice

Independent Case Examiner Phone 0800 414 8529 www.gov.uk/government/organisations/independent-case-examiner

The Parliamentary and Health Service Ombudsman Phone 0345 015 4033 www.ombudsman.org

Turn2us for information on finding a benefits adviser https://advicefinder.turn2us.org.uk/

Universal Credit helpline Phone 0800 328 5644

Other guides which may help you

Sheriff court action

Ways to clear you debt