Millions of Universal Credit and other benefit claimants could be at risk of hefty fine – how to avoid it
MILLIONS of benefit claimants could be at risk of a hefty fine if they don’t make a simple check.
The Department for Work and Pensions (DWP) has the power to charge people if they do not declare overpayments.
You can be overpaid if your circumstances change and you fail to update the DWP.
If you don’t, the government could charge you £50 as a penalty on top of the amount that is owed.
You could even be prosecuted with benefit fraud if the DWP finds you were not honest.
In order to pay back the “debt“, the DWP deducts a percentage from payments, resulting in less cash for already struggling households.
The following examples are changes you must tell the DWP:
- changing your name or gender
- finding or finishing a job, or working different hours
- your income going up or down
- starting or stopping education, training or an apprenticeship
- moving house
- people moving into or out of the place you live (for example your partner, a child or lodger)
- the death of your partner or someone you live with
- having a baby
- starting or stopping caring for someone
- getting married or divorced
- starting or ending a civil partnership
- planning to go abroad for any length of time
- going into hospital, a care home or sheltered accommodation
- any changes to your medical condition or disability
- changing your doctor
- changes to your pension, savings, investments or property
- changes to other money you get (for example student loans or grants, sick pay or money you get from a charity)
- changes to the benefits you or anyone else in your house gets
- you or your partner getting back-pay (sometimes called ‘arrears’) for salary or earnings you’re owed
- changes to your immigration status, if you’re not a British citizen
If you’re unsure, contact the DWP and double check.
While it might be difficult if your benefits are reduced, having to pay them back plus a possible penalty will be a lot harder.
In April this year, figures from the DWP revealed that 370,000 people were overpaid in error.
Between April 2020 and March 2021, there were 370,000 claimants who received overpayments classified as “official error” totalling £228,355,000.
And while you can request that the debt from these errors be wiped, only 10 waivers were granted in the same year, according to the DWP.
What happens if I’m asked to repay benefits?
If you are asked to make a repayment, this will be done in different ways, Turn2Us says:
- Making deductions from your benefit payments
- Taking it out of benefits that are owed to you
- Taking amounts directly out of your wages
- Getting a court order for debt recovery
- The amount taken will be dependent on how much you owe and if you’re still receiving benefits.
You can ask the DWP to reduce the amount you are paying back each month.
The DWP can take you to court if you don’t repay.
If you can’t afford to repay you can ask Citizen’s Advice for help.
If you don’t think you’ve been overpaid and the request for repayment is an error, you can ask for the DWP to look at it again.
Turn2Us says a letter about over payments should include the following information:
- How much you were overpaid each week
- For what period you were overpaid
- The total that has been overpaid
You can get advice and support for appealing a decision for free from organisations like Citizens Advice and Benefits and Work.
You should keep your contact details up to date so the DWP can get hold of you and you don’t miss any demands.
It’s also important to respond to any calls or emails from the DWP as soon as possible, or there’s a risk your benefit payments could be stopped or changed.
Citizen’s Advice benefits expert Lawrence Barratt previously told The Sun: “If you applied for Universal Credit in the early stages of the pandemic then the DWP may contact you for some additional information to support your claim.”
If you’re struggling with payments you may be entitled to help with the Household Support Fund. You can read more about it here.
Half a million people have had their benefits payments cut due to tax credit overpayments. You can find out more about it here.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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