Benefit overpayments

They usually happen if you don’t tell us about a change in circumstances which could affect your benefit, or because we have made a mistake when calculating your benefit.

Overpayments can happen if:

• you forget to tell us that your income has increased
• somebody moves into or out of your home
• you move out of your home and do not tell us
• you start work or change jobs
• the circumstances of other adults living with you change
• a dependant over 18 stops receiving child benefit

The list above only gives examples of situations that could cause overpayments and you must tell us about anything that happens that might affect your benefit entitlement.

Even if you have told the Department for Work and Pensions (DWP) about your change in circumstance, you must still let us know yourself and not leave it to the DWP to tell us.

Every time we adjust your benefit you will receive a letter which states the information we have used to assess your claim. It is important you read this letter, as you are responsible for making sure that the information we have used is correct.

We will send you a letter giving you full details of the overpayment –  how the overpayment happened, the amount you were overpaid, the period of the overpayment, how we will recover the overpayment and what to do if you disagree with it.

You will also receive an invoice which gives you your invoice number, and tells you how to pay the overpayment.

We can recover all overpayments, unless they are caused by an ‘official error’ and you could not reasonably have known you were being overpaid when you were being paid or told about your benefit. An official error is a mistake we or another government agency such as the DWP or Job Centre make.

Each case is different but when working out who the overpayment should be recoverable from we will look at:

• what caused the overpayment
• who received notification of the award
• who received payment
• who could have known the benefit was wrong

As a general guide:

• if either the claimant or the person who was paid caused the overpayment, we will recover the overpayment from that person
• if the overpayment was due to official error (our mistake), we can recover from either the claimant or payee providing they could reasonably have known they were being overpaid
• if the overpayment is nobody’s fault  we can recover the overpayment from either the claimant or the person who received the benefit

If we make a mistake and it is not reasonable for you or your landlord to have known that the benefit was wrong, we should not recover the overpayment.

Please contact us for advice – you can speak to a benefit officer or get an appointment with an overpayment officer.

You can also ask for a formal statement of reasons which explains in detail the reason for the assessment and any resulting overpayment. You must do this within one month of receiving our decision letter. Once you have received a statement of reasons you have a further 14 days to make an appeal.

Underlying entitlement can help to reduce an overpayment of housing benefit or council tax reduction.

Any overpayment should be reduced by any benefit which you would have been entitled to had all your circumstances been known at the time of the overpayment.

For example if  your job seekers allowance stopped because you started work and you failed to provide proof of your new income, you could be overpaid. If at a later date, you provide pay slips which show that based on your income, you could have qualified for some housing benefit, we could use underlying entitlement to reduce the overpayment by the amount of benefit you were entitled to. This will reduce the amount of the debt owed.

You have a month from the date we first told you about the overpayment to ask us to look at the decision again (known as a revision) or to make an appeal to the appeal tribunal.

If we look at the decision again and you are still unhappy with our decision, you have a further month from when we notified you of our review decision, to ask for an appeal.

If we have overpaid your council tax reduction, we will add the amount of the overpayment to your council tax bill. Our council tax office will then collect the overpayment by increasing your monthly payments.

If we have overpaid your housing benefit, there are several ways that the overpayment can be recovered, including:

• reducing your housing benefit payment each week
• if you are a Hackney Homes tenant, we will use any credit on your rent account
• sending you a bill to pay
• asking the Department for Work and Pensions to reduce your social security benefits and pay an amount towards the debt
• asking your new council to make the deductions from your housing benefit if you have moved out of the London Borough of Hackney

If you remain in receipt of housing benefit, then we normally recover the outstanding overpayment by deducting an amount every week from your housing benefit to reduce the outstanding overpayment. You will have to make up any shortfall that this causes to your rent due.

In all cases we will invoice the landlord for the overpayment.

If a landlord does not pay the invoice, we can apply for a county court judgement. This is where a court orders them to repay a debt. We can take action up to six years from the date that:

• the overpayment was made; or
• the debt was last acknowledged by the landlord; whichever is later

If we decide to recover an overpayment from the landlord, we may take it from payments we make to that landlord for another tenant’s housing benefit. This is often known as ‘blameless tenant recovery’. It usually happens when the tenant who is overpaid is no longer entitled to benefit. We cannot recover the money from the overpaid tenant’s ongoing benefit but we can recover it from the landlord.

The landlord cannot penalise the other tenant (the blameless one). So they must still credit the other tenants rent account as though blameless tenant recovery had not happened.

You can make an offer to pay a monthly amount against the outstanding overpayment.

If you are having financial difficulties visit Applying for extra financial help from the Council, or for debt advice visit Money Adviser Network.