The Department for Work and Pensions (DWP) has warned claimants of what they should do if they are overpaid on their benefits.
For whatever reason, some benefit claimants can sometimes receive more money than what they are entitled to. If an overpayment is made, then the DWP will start a process of benefit overpayment recovery which aims to settle the debt as quickly as possible.
The government department states that it classifies two groups of overpayments: where recovery is specifically provided for under legislation and those where recovery is not provided under the legislation, but the Secretary of State may seek recovery under common law.
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The government states on its website: "The Secretary of State has an obligation to protect public funds and to ensure that, wherever possible, overpayment and penalty debt is recovered. Overpayment recovery is subject to various legislative limitations and safeguards.
"It is DWP policy to recover all debt where it is reasonable and cost effective to do so. Debts should be recovered as quickly and cost effectively as possible without causing undue financial hardship to debtors."
Here's everything you need to know if you fall into overpayment...
Am I in trouble if I've been overpaid?
According to Citizens Advice, being overpaid does not automatically mean that you will be suspected or found guilty of benefit fraud, especially if you were unaware of what you were doing. However, you should expect the DWP to take action to recover the overpayment.
Sometimes, you may be asked to pay a civil penalty if something you did caused the overpayment, for example, if you gave the DWP the wrong information or didn't say anything when you were paid more than you were entitled to.
Depending on the circumstances surrounding the overpayment, you may be found guilty of committing benefit fraud in which the DWP could take action to recover the overpayment and prosecute you for fraud.
How will the DWP recover an overpaid benefit?
The DWP will first send you a letter informing you that they believe you've been overpaid. If you receive Housing Benefits then your landlord may be asked to repay the money if they're responsible, otherwise, you will be asked to repay.
According to the DWP, you have to pay the money back in the following cases:
- The information you provided in regard to your benefit was wrong
- You did not report a change in circumstances
- You gave the wrong information when reporting a change
- When a mistake was made with your payment
If you're still receiving benefits when you're told an overpayment was made, then the regular amount you get will be reduced until you've paid the money back. If you believe too much is being taken out for a replacement, then you should contact the DWP Debt Manage contact centre.
If you no longer receive benefits then you will have the option to either pay the money back in full or set up regular monthly payments.
Why you should not ignore any warning from the DWP
If you ignore the overpayment warning from the DWP and decide not to pay the money back, then the DWP may do one of the following:
- Ask your employer to make deductions from your pay
- Pass the case to an independent debt collector
- Pass the case to the DWP Debt Enforcement Team
This could ultimately land you in a lot of legal trouble and even see you get taken to court and should be avoided wherever possible.
What if I believe I haven't been overpaid?
If you disagree with the DWP's decision, you can ask them to explain their decision and ask for any relevant information that may prove you haven't been overpaid a benefit. You are also entitled to ask for a mandatory reconsideration within one month of receiving a letter from the DWP.
In extreme cases where you have solid evidence to prove why you believe you haven't been overpaid, you can dispute the decision. If you feel that you need more advice around the overpayment decision, your first point of contact should be Citizen's Advice who can also provide advice if you've been accused of benefit fraud.
A full guide to benefit overpayments can be found on GOV.UK.
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