Five mistakes that could get you fined up to £5,000 when claiming Universal Credit – and how to avoid it
MILLIONS rely on benefits like Universal Credit, but common mistakes could result in fines of up to £5,000 or payments being stopped altogether.
When you're claiming any benefit, it's up to you to make sure your details are up to date and correct, or it could cause problems later down the line.
You could run into trouble if you fail to update your circumstances or don't pay back an advance, for example.
Some errors can lead to penalty fines or your payments being stopped altogether - and if you're overpaid, you will have to give the money back.
To check what you need to report to avoid your benefits payments being paused, reduced or overpaid, you can visit the
We round up some of the most common mistakes and how to avoid them:
Giving incorrect details
If you give false information about your circumstances to claim Universal Credit payments, it's classed as fraud.
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And that's also the case if you fail to update the details of any changes that might have taken place while you're claiming for example if you move address or change your name.
It's an easy mistake to make, but if you fall foul of the rule a fraud penalty can be applied to your Universal Credit payments, which reduces the amount you get.
The reduction can be up to 100% of your standard allowance if you are single, or up to 50% for each person in a joint claim.
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But you could also be taken to court and issued a fine of up to £5,000.
And you run the risk of having your benefits cut for up to three years, but this is only applicable to sanctionable benefits.
Sanctionable benefits include Employment and Support Allowance, Income Support, Jobseeker’s Allowance and Universal Credit.
Not repaying an advance
A Universal Credit Advance is a loan to help support you while you are waiting for your Universal Credit payments.
But it's important to note that you have to pay it back.
An advance that you get following a new claim or transferring from another benefit has to be paid back within 24 months.
You get 12 months to repay a Budgeting Advance, and just six months to repay a Change of Circumstance Advance.
The repayments are usually taken out of your Universal Credit payments and will be up to 25% of your Standard Allowance.
But if you don't pay your advance back the DWP might look to recover the cash another way.
This could be by contacting your employer to arrange for deductions to be made from your earnings, for example.
It might also ask an independent debt collection agency to collect the money.
Not repaying a hardship payment
If your Universal Credit gets cut because of a sanction or penalty for fraud, you may be able to get emergency money to help cover household expenses like food and bills from a Hardship payment.
It's another loan, so you have to pay it back when your sanction ends.
Usually the Jobcentre will get the money back by deducting cash from your Universal Credit payment each month until it’s paid off.
That could mean your Universal Credit payments are reduced by up to 30%.
However, if you're having problems repayment the money, the DWP might agree to reduce or cancel your repayments.
Not returning overpayments
An overpayment is an amount which has been paid to you that you were not entitled to.
This can happen by mistake or if you've entered incorrect details and the DWP thinks you're entitled to more than you really are.
Crucially, if you get paid more than you're owed, you'll have to return the money.
You won't have to pay it back all in one lump though - typically you'll repay at a rate of up to 15% of your standard allowance.
This might be higher if your household income is more though.
You get tax credits
You can't get Universal Credit and tax credits at the same time - it's classed as an overpayment if you find yourself receiving both.
So if you are getting tax credits while you claim Universal Credit, HMRC will be told to stop your tax credits.
If you remain on Universal Credit, your benefit payments will be reduced until you’ve repaid the tax credit money that you owe.
And if you remain on tax credits, your payments will also be reduced until you've repaid the Universal Credit money you received.
If you no longer get either type of benefit, you'll be sent a "notice to pay", which you should respond to within 30 days, explains StepChange.
If you fail to pay what’s owed, money could be taken from your wages.
Help if you're struggling
If you're struggling to make ends meet or keep up with things like repayments you can look to charities for advice.
Citizens Advice and StepChange can give you help with debt, budgeting and applying for certain benefits with free tools and services.
You can call or search online to find the advice you need. Reach the charities on the numbers below:
- - 0800 138 1111
- - 0808 800 9060
- - 0808 808 4000
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Millions of Brits getting Universal Credit will get more cash in their monthly payments from April though, as benefit rates are increasing.
The day you receive your payments could change next month as Easter interrupts the regular schedule.
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