9 My benefit has been overpaid. What do I do?
If your benefit has been overpaid you may have to pay the balance back. There are different rules on whether you have to repay an overpayment, depending which benefit has been overpaid:
- For social security benefits you normally only have to repay an overpayment if it was your fault; for example, because you failed to tell the benefit office some important fact, or you told them something that was incorrect.
- For Housing and Council Tax Benefit, you usually have to repay all overpayments, unless they were entirely the council’s or benefit office’s fault, and you could not be expected to realise you were being overpaid.
- For tax credits, HM Revenue and Customs are legally allowed to recover all overpayments, although they have discretion not to in cases of hardship or official error.
If you have to pay the overpayment back, the benefit office may recover it either by making deductions from your ongoing benefits or by billing you for the overpayment.
Check the amount
You should always check how much of the overpayment is repayable. Any amount of benefit you were genuinely entitled to over the period of the overpayment should be taken into account. In some cases it may be possible to reduce the overpayment to take account of other benefits that you did not claim for the same period.
Challenging the overpayment
You can challenge an overpayment for two reasons. You may think you are entitled to some or all of the extra benefit you have received; or you may think the overpayment is due to an official error and the benefit office cannot recover it. In both cases, you can ask the benefit office to reconsider the overpayment.
- For social security and Housing or Council Tax benefit overpayments you can appeal to an independent tribunal.
- For tax credit overpayments you can only appeal if you do not agree the amount of the overpayment. There is no appeal about whether you have to repay a tax credit overpayment, but you can still ask the Inland Revenue to reconsider, and you could make a complaint if the overpayment was due to HM Revenue and Customs error or delay.
You should take action within one month. If you ask the benefit office to reconsider, a different person from the one who originally calculated the overpayment will be in charge. If you are still not happy with the result after the overpayment has been reconsidered, you can appeal at this stage. If you appeal, your case will be considered by a tribunal which is completely separate from the benefit office.
- Even if there has definitely been an overpayment of benefit, and the benefit office has the power to make you pay it back, they do not have to do so. You can ask them to exercise their discretion not to recover it from you. For example, you might ask them to do this because of health reasons or financial hardship. You should contact the overpayment section of the benefit office and supply evidence about how paying back the overpayment would affect you.
- If you are paying back an overpayment and you cannot afford the instalments, or the deductions from your benefit are too high, you may be able to negotiate with the benefit office about paying it back at a lower rate.
If you are overpaid benefit, the benefit office may also investigate you for benefit fraud. You should seek specialist advice if this happens. Benefit fraud is a criminal offence and you could be prosecuted, or have to pay a penalty, or you may lose benefit in the future.
All overpayment issues are complicated. If you have a problem to do with benefit overpayment, we recommend that you speak to one of our welfare benefit advisers on 0845 345 4 345 for specialist advice. Telephone specialist advice is only available if you qualify for legal aid.