What is an overpayment?
An overpayment is when benefit has been paid to someone but they are not entitled to it.
How do overpayments happen?
Benefit overpayments can happen for a number of reasons:
A customer does not tell us about a change of circumstances at the time, or not at all. (By law, customer and landlords must tell us about changes in circumstances. They can be fined if not).
A customer or landlord has deliberately claimed benefit to which they are not entitled, or they have given false information to get benefit.
A mistake has been made by the local authority, the Department for Work and Pensions or another government agency.
How is the amount of overpayment worked out?
The weekly amount of the overpayment will be the difference between the incorrect rate of benefit and any benefit you are entitled to based on your new circumstances.
Do all overpayments have to be paid back?
Most overpayments must be paid back regardless of the cause of the overpayment and can be recovered from the person to who the benefit was paid.
Overpayments which are caused by an ‘official error’ may not be recovered unless it is deemed reasonable for the tenant or landlord to have known they were being overpaid at the time of the payment.
Each case is looked at on an individual basis.
Methods of overpayment recovery
If a customer is receiving Housing Benefit we will take a weekly deduction from the benefit entitlement until the overpayment is recovered.
Where there is a difference between the housing benefit payment and the rental charge the customer is responsible for paying that difference. If the customer is not receiving Housing Benefit, we may recover the overpayment from other benefits or we may send the tenant an invoice for payment.
If we have decided to recover an overpayment from a landlord we may issue an invoice to the landlord or if the landlord has other tenant’s claiming Housing Benefit, we may consider making deductions from the other tenants’ benefit paid to that landlord.
The amount of these deductions should not be treated as unpaid rent for those tenants, and the landlord must not try to recover the shortfall from them.
What will happen if an overpayment is not repaid?
Where an invoice is issued and remains unpaid, or someone does not keep to an arrangement to repay the debt over time, we may take action to register the debt in the County Court, or take money from other benefits.
Not telling us about changes of circumstances straight away is the biggest cause of overpayments. If your circumstances change, tell us straight away so that your benefit can be corrected before there is an overpayment. You must tell us even though you may not have to tell other agencies, such as the Department for Work and Pensions.