Universal Credit: What is a Universal Credit overpayment? How are they recovered?

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Universal Credit claims have risen amid the coronavirus crisis. More than 85,000 Universal Credit claimants could see an increase to their payments from Monday, November 16 after a new rule came into force. But what exactly is a Universal Credit overpayment and how do these overpayments work?

What is Universal Credit?

Universal Credit is a single payment available to those who are on a low income or out of work.

It replaced six legacy benefits which are:

  • Income Support
  • Working Tax Credit
  • Income-based Jobseeker’s Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Housing Benefit
  • Child Tax Credit.

What is an overpayment under the Universal Credit system?

An overpayment of Universal Credit means you have been paid more benefit than you are entitled to.

An overpayment can happen for several reasons including if:

  • The benefit office made an error
  • You did not know you had to tell the benefit office about a change in circumstances, meaning you were entitled to less benefit or should stop getting a benefit.

How to proceed if you believe you have been overpaid

If you believe you are being too much benefit, you should tell the Department for Work and Pensions as soon as possible.

The longer you fail to report this overpayment, the more you may be required to pay back.

If you are unsure if you have been overpaid, you should speak to a benefits adviser.

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Do you have to repay an overpayment?

You must always repay overpayments, regardless of the reason for the overpayment.

If you have been overpaid, the benefits office will calculate how much you should have been receiving.

The benefits office will work out how much you were overpaid by and they will ask you to repay the extra money you received.

The benefits office may also decide if you need to pay a civil penalty for the overpayment.

How is an overpayment recovered?

Overpayment recoveries are currently on hold due to the coronavirus pandemic.

However, typically overpayments are recovered in the following ways:

  • Making deductions from your benefit payments
  • Taking it out of benefits that are owed to you, such as arrears
  • Taking amounts directly out of your wages
  • Getting a court order for debt recovery.

How to challenge an overpayment claim

If you do not believe you have been overpaid, you can ask for this to be investigated and appeal against this decision.

The decision letter about the overpayment should include a breakdown of:

  • How much you were overpaid each week
  • The period duration when you were overpaid
  • The total that has been overpaid.

If you believe the benefits office may have gotten the amounts or dates wrong, you should contact them and inform them of the mistakes made.

If you have any evidence of these mistakes, you should send copies of this to the benefits office.

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