Overpayments of benefits and financial support
An overpayment is an amount which has been paid to you that you were not entitled to receive. It's important to report any change in your circumstances as soon as possible and answer letters or online notifications you get about overpayments quickly.
Overpayments can happen for a number of reasons, for example:
- you may have given incorrect information
- you may not have told the Department for Communities (DfC) something it needed to know about
- you may have been slow to tell DfC about a change in circumstances
- a mistake was made with your payment
The reason and period of your overpayment will be explained on your overpayment letter or notification on your Universal Credit account. It will also tell you if you have to pay the money back.
Benefits: report a change in your circumstances
- Who you tell depends on which benefits you get. You’ll need to report your change to more than one benefit office if you get more than one benefit.
- You need to report changes to your circumstances so you keep getting the right amount of benefits.
- Your claim might be stopped or reduced if you do not report a change straight away or you give incorrect information.
If you don't declare an overpayment
You may be committing benefit fraud if you know you've been overpaid but don't do anything about it or deliberately fail to report a change in your personal circumstances. If you're prosecuted for benefit fraud you could be fined or get a prison sentence, as well as having to repay the money.
Paying the money back
If the overpayment was your fault, you'll have to pay it all back. If a mistake was made with your payment, you may still be asked to pay it back, particularly if you could reasonably be expected to realise you were being overpaid.
If the person who was overpaid has died, there is a different process for repayment, as covered on this page in the section ‘Repayments when someone has died’.
If you get a benefit, the amount you get will be reduced until you’ve paid back the money.
If you no longer get a benefit, you can pay monthly by direct debit. You can also pay in full by debit card, credit card, cheque or postal order.
To make monthly payments by direct debit, phone Debt Management. You will need your bank details when you phone.
Debit or credit card
To pay by debit or credit card, phone Debt Management. You will need your debit or credit card and reference number when you phone.
Cheques or postal orders
These should be crossed and made payable to 'Department for Communities only'. You must write your National Insurance number on the back of your cheque and post it to Debt Management.
Direct Earnings Attachment
If you’ve not paid in full or set up a repayment plan with Debt Management and you’re employed, the DfC may ask your employer to take deductions directly from your earnings. This is called Direct Earnings Attachment.
Difficulty repaying your debt or loan
If you are having difficulty repaying your benefit overpayment, Social Fund or Discretionary Support loan contact Debt Management on the relevant phone number as soon as possible to talk about your repayment plan.
In exceptional circumstances the Department for Communities has the discretion to waive recovery of all or part of an overpayment.
Asking for a waiver should normally be made in writing. There is no right of appeal against a decision not to apply discretion or if you disagree with the discretion applied.
Where a waiver is asked for because of ill health, this would only be considered where there is evidence available that recovery of the overpayment is damaging to the health and/or welfare of you or your family. And, where it can be clearly proven that your circumstances will only improve by waiver of the overpayment.
Evidence to support this should be in the form of a letter from a professional such as a GP, consultant, psychiatric nurse or support worker. This evidence must be specific as to the effect the recovery is having on your health and must be the opinion of the professional writing the letter.
Where the waiver is asked for on the grounds of severe financial hardship, you would need to show that this has been long standing and not expected to improve in the near future. The hardship must be of such severity that it is not reasonable to expect you to make even reduced payments.
Full details of your income and expenditure, your partner, your dependants and any other members of the household would need to be given along with evidence to prove this. This includes letters from creditors pursuing debts or arrears of rent/mortgage.
Housing Benefit and Rate Relief
If Housing Benefit or Rate Relief is paid directly to your landlord, they may be asked to repay the money if they caused or contributed to the overpayment. If the overpayment was your fault, you may have to repay it.
HM Revenue and Customs (HMRC) will send you a notice whenever your award changes. It will ask you to make sure the information about your personal circumstances shown on your award is right and complete. If anything is wrong, missing or incomplete, you need to contact HMRC.
Your Tax Credits award is usually reduced until the money is paid back. How much it's reduced by depends on the type and amount of your award. If you no longer qualify for Tax Credits, you can repay the money as a lump sum or in instalments.
If you receive Universal Credit, your tax credit debt will normally transfer to the DfC and it will be recovered from your Universal Credit award.
If your Universal Credit award stops, the debt will be recovered by other available methods.
Tax Credits Debt Transfer
From 14 June 2019 HMRC began to transfer some Tax Credits debts for customers who were not in receipt of Universal Credits to the DfC for recovery.
If you have a Tax Credit debt and your claim has ended, you are not claiming Universal Credit and are in PAYE employment with earnings of £5,200 or more from a single employer, but do not have a repayment arrangement with HMRC, you may be affected.
HMRC will write to you if your debt is moving to the DfC. The letter will provide you with details of your outstanding debt balance as well as an explanation of what will happen next.
Repayments when someone has died
The DfC can recover benefit overpayments from a person’s estate.
An overpayment could have happened because, for example, the person who died:
- had more savings than they declared in their benefit claim
- had not declared an income
- was in hospital or a nursing home and had not told DfC
If you’re dealing with the estate, the DfC will write to you about arrangements to repay from the estate or may request further information once probate has been granted.
You should not distribute the estate until you know what needs to be repaid. If you do, you may have to pay back the money yourself.
What you need to do
You’ll be asked to provide information to help work out if anything needs to be repaid.
You may need bank statements, building society passbooks or other information about the dead person’s assets.
If you do not provide the information asked for, the overpayment will be calculated based on the probate figure before any deductions (that is, the whole estate).
If there has been an overpayment
The DfC will write to you asking for the money back from the estate. They will tell you how any overpayment has been worked out and explain why it happened. They will also tell you how to pay.
If you need to discuss your payment, or setting up a repayment plan, you can call or write to the DfC’s Debt Management Office.
From time to time your disability benefits will be reviewed if you receive:
- Employment and Support Allowance
- Personal Independence Payment
- Disability Living Allowance
- Attendance Allowance
- Incapacity Benefit
- the 'disability premium' with another benefit, such as Income Support or Housing Benefit
If your condition has improved, you may no longer qualify for the benefit. You won't have to repay anything you've already received unless you could reasonably have been expected to realise the improvement in your health would affect the amount of benefit you get.
If you don't respond to requests for payment
If you ignore payment requests or do not offer a suitable amount, your debt may be referred to a debt collection agency or court action may be taken against you.
Any fees owed in taking this action will be added to your overpayment (debt) and recovered from you.
If you disagree with the overpayment decision
If you disagree with the overpayment decision, contact the benefit office that sent the letter or notification on your Universal Credit account for an explanation.
If you aren’t satisfied with the explanation or the way your case has been handled, you can appeal.