Full list of reasons you might have to pay back benefits to DWP – and what to do if you think it’s wrong
THOUSANDS of Brits could face the shock of being asked to repay benefits to the Department for Work and Pensions (DWP).
Many only discover they owe money after they've already spent it, leaving them scrambling to sort out how to pay it back.
The reasons why benefit receivers may have to pay back DWP can vary but we've broken down the full list below.
You've made a mistake
One of the most common reasons is simply making an error on your benefits claim, like reporting the wrong income or not including all details of a partner's finances.
You and your partner's incomes affect the amount of benefits you get, so getting it wrong can mean you are paid too much or too little.
If you're paid too much, the government can ask you to pay it back, and there's no limit on the time period over which this applies.
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If you're being paid too little, you'll usually only be able to make a backdated claim for the previous month.
So either way it pays to make sure the information you give is accurate and up to date.
Failed to report a change in circumstance
Any change in circumstances – such as starting a new job, receiving a pay rise, or inheriting money – must be reported to the DWP immediately.
If not, you could find yourself owing money back for benefits you were no longer entitled to.
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For those receiving Child Benefit, there’s an added complication.
If your or your partner's income rises above £60,000 during the tax year, some of that benefit will have to be repaid, usually through a tax return.
Misrepresenting your circumstance
Another major issue is fraud. If you intentionally lie or misrepresent your circumstances, the DWP will classify it as benefit fraud.
This can result in being taken to court, or having to pay back the money with additional fines.
System errors
Sometimes, benefits are overpaid because of system errors.
This might happen if you receive two payments in error or if the system calculates your benefit incorrectly due to a delay in processing updated information.
If you're overpaid, you'll need to repay the extra, regardless of whether it's the DWP’s fault or not.
For Universal Credit, Jobseeker's Allowance, and Employment and Support Allowance, over payments are generally recovered, even if it's DWP's fault.
But for other benefits, over payments caused by a DWP mistake might be written off.
Advances or interim payments
Advances on benefits can also become an issue if not repaid on time. Universal Credit claimants, for instance, can receive an advance while waiting for a claim to be processed.
However, this advance is considered an over payment once the claim is finalised and must be repaid.
Other benefits, like Jobseeker’s Allowance or Employment and Support Allowance, may offer interim payments, but these too need to be repaid if you stop receiving benefits before the full amount is covered.
What is a Universal Credit advance?
An advance payment means you could get some cash within five days rather than waiting weeks for your first payment.
But as this is a loan, you’ll need to repay it, with the money owed taken out of future Universal Credit payments.
The most you can get as an advance is the amount of your first estimated payment.
You can apply for an advance payment in your online journal or through your Jobcentre work coach.
You'll need to:
- Explain why you need an advance
- Verify your identity
- Provide bank account details
A budgeting advance is different to an advance payment, with this cash being used for emergencies such as buying a new cooker, or money you need to get a new job.
It’s still a loan though, which again means that it needs to be repaid and will be deducted from future Universal Credit payments.
The maximum you can get for a budgeting advance is £348 if you’re single with no children or £464 if you are a couple with no children.
If you do have children, you can get up to £812 as a loan.
To get a budgeting advance, you must:
- Have been getting Universal Credit, employment and support allowance, income support, jobseeker's allowance or Pension Credit for six months or more, unless you need the money to help you start a new job or keep an existing job
- Earned less than £2,600 (£3,600 jointly for couples) in the past six months
- Paid off any previous budgeting advances
You can apply for a budgeting advance by calling the Universal Credit helpline on 0800 328 5644.
Universal credit hardship payments
Hardship payments are another area where repayments might be needed.
These payments are designed to help those struggling due to sanctions or penalties.
While they provide short-term relief, they must be repaid once the penalty period ends, typically through deductions to future benefits.
Late awards or system delays can also lead to overpayments. If a benefit is paid late and isn’t factored into other payments, it could lead to an excess, which the DWP will expect you to repay.
The DWP sometimes makes errors, which could lead to an overpayment.
Whether you need to repay the money depends on the type of benefit.
If a claimant dies
If someone dies while still receiving benefits, payments might continue if the DWP isn’t notified in time.
These over payments are called "direct payments after death" and are usually recovered from the deceased’s bank account.
If the money can’t be recovered this way, the DWP might ask the next of kin to pay it back.
In cases where a couple is receiving benefits together, and one partner passes away, the remaining partner may be responsible for repaying any over payments.
This applies to Universal Credit and other similar benefits.
Social fund over payments
If you’ve received too much money from specific payments like the Maternity Payment or Winter Fuel Payment, and the over payment is due to incorrect information being provided, the government can reclaim the money.
However, if the over payment occurred due to a government mistake, they can’t take it back.
Knowing what can trigger a repayment request is crucial, especially if you're relying on these funds.
While the DWP does offer repayment plans and deductions from future benefits, it’s always better to avoid owing money in the first place by keeping your details up to date.
It's always worth checking if the DWP have got it right, as an investigation by The Sun revealed thousands of people may have been told to pay back benefits – but don't actually owe a penny.
Elsewhere, A disabled woman was left in "disbelief" because her benefits were stopped and she was told she owed £28,000 in over payments for the Department for Work and Pensions.
How to complain
If you've been asked to repay benefits and think it's not right, you can raise the issue with the DWP.
If the DWP believes you have been overpaid a benefit, it will write to you detailing what happened and how much you owe.
You can ask it to reassess your case if you don't agree with its decision.
In your response, ask how it made its decision, as well as for a "mandatory reconsideration".
You should then get another letter with the outcome of the reconsideration.
If you still don't agree, you can appeal the decision at a tribunal.
You can also make a complaint about the customer service you receive from the department.
Say you're making a formal complaint and ask to initiate its complaints procedure, either in writing or over the phone.
A complaint resolution manager should look at your case and issue a final response.
t's a good idea to keep hold of any correspondence when you make a benefit claim in case you have any issues down the track.
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For example, if there is an error and you spot it, make sure to raise it with the relevant department and keep a record of this correspondence.
Are you missing out on benefits?
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MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data.
You can use to determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.