A benefit overpayment is when you are given more money than you were entitled to. This may happen if we don't know that your circumstances have changed. In most cases we will expect you to pay back any money that you were not entitled to.
Overpayments can happen because:
- we have not been told about a change in circumstances
- we have been given the wrong information
- a mistake has been made in calculating your benefit
To prevent an overpayment being made in the first place, you need to tell us if your circumstances have changed in any way (including the circumstances of anyone who lives with you). Any changes should be reported as soon as possible.
The only time a benefit overpayment does not need to be paid back is If there was an official error in the calculation that you could not reasonably be aware of.
What Happens If I Have Been Overpaid?
If you have been overpaid Housing Benefit or received too much discount on your Council Tax bill then we will let you know in writing. We will always tell you:
- how much the overpayment is
- the dates when the overpayment was made
- why you were overpaid in the first place
- if you have to pay it back
- how you can appeal if you think it is wrong
How Do I Pay Back an Overpayment?
How we reclaim the money will depend on which benefit has been overpaid.
Housing Benefit overpayments
Your Housing Benefit will be reduced each week until the overpayment has been recovered. It may take some time for an overpayment to be recovered. During this time it is your responsibility to make up the difference in your rent. We can recover Housing Benefit in the following ways:
- If you are still receiving Housing Benefit, we can reduce the amount you receive each week until the repayment is made
- By reducing any other benefits you are receiving from the Department for Work and Pensions until the amount is repaid
- By recovering the payments from your landlord if your Housing Benefit was paid directly to them and if they could have known they were being overpaid
- By taking a percentage of your wages if you are working
- We can set up a payment arrangement with you, if this is the case you might be asked to complete an income and expenditure form so we can find out what you can realistically pay back each week or month
Council Tax Reduction Overpayments
If your Council Tax bill has been reduced too much then your account will be adjusted to show this. A revised Council Tax statement will be sent to you showing the instalments you will need to pay.
Can the Amount I Owe Be Reduced? (Your Underlying Entitlement)
Your Housing Benefit overpayment may be reduced if we are able to establish what your 'underlying entitlement' is. Your underlying entitlement is the amount of money that you are entitled to based on your correct information. In some cases it could result in a reduction in the amount you need to pay back.
A reassessment of your circumstances could show that you were still entitled to some of your Housing Benefit during the overpayment period in which case your overpayment would be reduced. For example:
You are claiming Housing Benefit and Jobseeker's Allowance (JSA) and your Housing Benefit is £100 per week. You start working on the 1 June but don't tell us until the 10 August. This means that you have been receiving Housing Benefit as if you were still receiving JSA for ten weeks.
In this case your overpayment would be £1,000 (£100 per week across ten weeks). However, your wage might still allow you to qualify for some Housing Benefit.
If we reassess your situation in light of the full facts then we may calculate that your underlying entitlement to Housing Benefit was actually £80 per week during the overpayment period (£800).
Based on this, you would actually owe £200 instead of £1,000 (£1,000 less £800).
What Happens If I Don't Pay Back an Overpayment?
If you don't pay us back or make an arrangement to pay, we will take further action. If we have invoiced you, and you don't pay we will send you a reminder. If you still don't pay we may ask a debt collector to visit your home or ask the county court to issue an order for payment. This will increase the amount you owe because we will add court costs and interest to the debt. County court proceedings effect your credit rating.
How Do I Appeal a Decision?
If you don't agree with a decision you can appeal it under certain circumstances. Find out more from our Benefit Appeals page.