Navigating the benefits system can be a complex job. There are often detailed forms to fill in and then you must keep on top of any changes to ensure you receive what you’re entitled to.
However, not informing the Department of Work and Pensions (DWP) about certain changes can result in being overpaid. Then when errors are discovered, it can be a struggle to repay the cash.
There are several reasons why the DWP might require repayment, many which can happen quite easily and without claimants noticing their error. The full list is available below.
Simple mistake
One common reason for repayment is making a mistake. This can be something like failing to accurately report your or your partner’s income.
Overpayments must be returned without any time limits. However if the mistake means you are owed money these typically can only be backdated for a month.
Failing to notify change in circumstances
Another key point is the failure to notify them of changes in circumstances. The DWP cautions: “You need to report changes to your circumstances so you keep getting the right amount of benefits,” reports the Mirror.
“Your claim might be stopped or reduced if you do not report a change straight away or you give incorrect information.” It’s crucial to report any changes including:
Failure to notify change in child’s circumstances
According to the Department for Work and Pensions (DWP), it’s crucial to inform HM Revenue and Customs (HMRC) about any changes that may affect your Child Benefit. They stress: “If you do not, you may not get all the money you’re entitled to, or you may be overpaid and have to pay money back.”
The DWP advises parents to promptly tell HMRC if there are alterations in their child’s life that could impact benefit eligibility. These include if your child:
- starts getting Universal Credit, Jobseeker’s Allowance (JSA) or Employment and Support Allowance (ESA)
- changes their name by deed poll
- gets married or forms a civil partnership
- moves in with their partner
- goes missing
Other reasons you must report include:
- If your child stays in or leaves education – Child Benefit stops on 31 August on or after your child’s 16th birthday if they leave approved education or training
- If your child moves away from home – you must notify HMRC if your child will live away from you for either 8 weeks in a row or more than 56 days in a 16-week period; will go abroad for more than 12 weeks; moves to or from Northern Ireland; goes to prison or youth custody for more than 8 weeks
- If your child goes into hospital or care – you must tell HMRC if your child goes into care or residential accommodation for more than 8 weeks, or hospital for more than 12 weeks
- If your child changes their gender – HMRC will usually be told automatically if your child gets a Gender Recognition Certificate to change their gender. If they have not changed their gender legally you do not need to tell HMRC
- If your child dies
Additionally, those receiving Child Benefit must update the authorities if your or your partner’s earnings exceed £60,000. This might mean repaying some benefits, usually through a tax return.
You lied
Misleading the system with incorrect information about your situation is treated as fraud. Being dishonest or providing false details may result in hefty consequences, including repaying funds, court appearances, additional legal costs, or fines due to prosecution.
Payment mistake
Overpayments can sometimes occur not because of personal error but due to mistakes made by the system or DWP mistake. This could be multiple payments or if your benefit has been incorrectly worked out because of a delay in processing updated information.
If you receive an overpayment, you’ll be required to return the extra amount, regardless of who made the error. This applies to those claiming Universal Credit, Jobseeker’s Allowance, and Employment and Support Allowance, although some other benefits may write off the mistake.
Overpayments can also occur due to late awards or system delays. If a benefit is paid late then not accounted for with some other payments, it could mean you are overpaid, but you will need to repay the overpayment.
In cases where you’ve received too much from support schemes like Maternity Payment or Winter Fuel Payment due to your own error, you’ll have to repay the money. However, if the Department for Work and Pensions (DWP) is at fault, they can’t reclaim it.
Advance payments
Advance payments are available to some individuals, such as those claiming Universal Credit, while they wait for their claim to be processed. But this advance must be repaid once the claim is finalised.
Hardship payments
Hardship payments are designed to assist those struggling due to sanctions or penalties, but these too must be repaid when the penalty or sanction ends. This is typically through deductions from future benefits.
Someone dies
In the event of a claimant’s death, the DWP can recover any benefit overpayments from the deceased person’s estate. An overpayment might occur if, for instance, the individual who passed away:
- 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 DWP
The DWP advises: “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 there has been an overpayment the DWP 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.”
What if you think you have been overpaid
In case of suspected overpayment, the DWP instructs that you must immediately inform the office handling your benefit. This can been if:
If an overpayment has occurred, you may be required to return the excess amount.
What if you think the DWP decision is wrong?
If you have been told to repay benefits you need to be sure you know the reason why as it might be mistake. You will get a letter to let you know you have been overpaid.
The DWP says if you believe the decision is wrong you can ask for mandatory reconsideration. You usually need to do this within one month of receiving the letter.