Overpayment of benefits

An overpayment is caused when you have been paid more benefit than you are entitled to.

Causes of overpayment

Overpayments usually happen when you do not tell us about a change in your circumstances as soon as it happens. Changes we need to be told about are:

  • an increase in your wages or any other income
  • if someone moves in to or out of your home
  • if you change address.

To help us get your benefit right, tell us about any changes in circumstances straight away.

A fraudulent overpayment may occur when a person has:

  • deliberately given a false statement or document
  • deliberately failed to report a change of circumstances with the intention of obtaining or retaining benefit.

The sanctions available to the council are:

  • prosecution in the courts
  • an Administrative Penalty of up to £1,000
  • a Civil Penalty of £70.

Recovering an overpayment

We have a duty to recover overpayments. When recovering, we will consider the method of recovery and whom we should recover the overpayment from.

We can recover the overpayment from:

  • the person who made the claim and, in some circumstances, their partner
  • someone acting on behalf of the applicant, such as an appointee or someone with power of attorney
  • the person who has been paid the benefit, such as a landlord or agent.

We can recover almost all overpayments unless the Department for Work and Pensions (DWP) have made a mistake. There is also an exception if you could not be expected to know there had been an overpayment.

If you have been overpaid, we will write to you with details of:

  • the reason for the overpayment and how we worked it out
  • whether we will recover the overpayment and how
  • the amount of the overpayment
  • what period the overpayment relates to
  • what to do if you do not agree with the overpayment.

An invoice will be sent if a Housing Benefit overpayment has occurred. 

A Council Tax bill will be sent if Council Tax Support has been overpaid.

Paying back an overpayment

You can pay an overpayment in one of two ways.

  1. Deductions from your current Housing Benefit award. The current rates are £11.25 a week or £18.75 if the overpayment is due to fraud. We can also take 50% of any earnings disregards.
  2. We send you an invoice and agree a repayment plan

If you do not agree with our decision, you can ask us to look at it again or appeal. If you wish to do this, you must write to us within one month of the date of our decision notice.

You can also pay back an overpayment via phone by calling 01590 646121. Have your invoice number and bank account details ready.

If you are in financial hardship, you may be able to repay the overpayment at a reduced amount. If you wish to do this, call us on 01590 646121.

Failing to repay an overpayment

Failure to repay an overpayment may result in further action being taken. We can attempt recovery by any of the following methods.

  • Recovery from your Department for Works and Pension benefits.
  • Recovery via Direct Earnings Attachment, if in employment. We will ask your employer to deduct your debt from your net earnings.
  • Recovery from another local authority on our behalf, if you have moved to another area and receiving housing benefit
  • Recovery via a collection agency.
  • Recovery via the county court. This will incur additional court costs that will need to be paid by you. These costs will be added to the outstanding balance.

Further information

We are here to help. Should you get into any difficulties with your repayments, call our Benefits Team on 01590 646121 or email benefits@nfdc.gov.uk

The Government and The Money Advice Service has set up a new online tool aimed at helping people with their budgets and managing their debt. Find out where to get free debt advice.

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