How Far Back Can DWP Claim Overpayments? 2023 Laws (2024)

How far back can DWP claim overpayments?

We’ve answered this common question and others related to the DWP and benefit overpayments.

A DWP overpayment happens when the DWP believes you’ve been overpaid for benefits, Tax Credits or other payments.

Understanding benefit overpayment and how it works will save you lots of headaches and worries.

Here’s an example of someone who received an overpayment, and now the DWP is asking them to pay it back.

Source: https://forums.moneysavingexpert.com/discussion/3863397/benefits-clawback

Don’t worry, here’s what to do!

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

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What is the DWP?

The Department for Work and Pensions (DWP) is a British Government department responsible for administrating an array of state benefits, including the state pension, pension credits, disability benefits, ill health benefits, and working benefits.

According to the department’s website, it is one of the largest government departments and issues benefits to over 20 million claimants.

What is a DWP debt?

A DWP debt is when you have wrongfully received a benefit payment or have been receiving too large of a benefit payment. These are known as DWP overpayments.

Most people receive DWP overpayments because:

• The DWP has not been notified of changes and improvements in your circ*mstances.
• The department continues paying your benefit for many months or years before realising that the benefit payment should have been reduced or stopped.
• You didn’t give the DWP correct information when you applied for benefits.
• The DWP has made a mistake (e.g. errors in form completion)

This results in a DWP debt.Because a DWP overpayment is a priority debt, you should pay them first ahead of non-priority debts like credit cards or unsecured loans.

Can DWP claim overpayments?

Yes, the Department for Work and Pensions can ask you to pay back your DWP overpayments.

It’s highly likely that you didn’t update the DWP on your circ*mstances, which causes the overpayments. But there are also some cases where the DWP could incorrectly overpay you as well.

Regardless of the situation, the DWP can ask you to repay the overpayments.

If you think you haven’t been overpaid a benefit, you can request a mandatory reconsideration within one month of receiving the DWP letter.

Who is DWP Debt Management?

DWP Debt Management is a branch within the DWP that works to identify DWP debts and agree for the debts to be repaid.

They majorly collect debts related to benefits overpayments but can also try to recover:

• Tax credit overpayments
• Social Security benefits relating to compensation cases
• Outstanding Social Fund loans
• NHS costs relating to injury cases
• Overpaid benefits from the estates of people who died

If you have a DWP debt, you’ll receive a letter from DWP Debt Management. They’ll explain why they think you’ve been overpaid. You should verify the decision and contact the DWP straight way if you think they’ve made a mistake.

If you’ve received a letter about DWP overpayments or arrears, this doesn’t necessarily mean you’re being suspected of benefit fraud.

I suggest you seek advice from Citizens Advice or other similar debt charities for help with handling DWP overpayment claims.

How do you pay back DWP overpayments?

The DWP won’t ask you to pay back overpayments in a single payment, especially if you’re experiencing financial difficulty.

If the DWP debt is a substantial amount due to many months of overpayments, they will probably ask that you repay in instalments.

You can choose to pay off the overpayments in one go, or you could ask for a payment plan, so the debt is repaid over many weeks or months.

The DWP states this within their policy on recovering overpayments:

“It is DWP policy to recover all debt where it is reasonable and cost effective to do so. Debts should be recovered as quickly and cost effectively as possible without causing undue financial hardship to debtors.”

Apart from a repayment plan, the DWP can use the following means to claim back the arrears:

• Making deductions from your continuing benefit payments
• Taking amounts directly from your wages
• Getting a county court judgment (CCJ) to recover the debt

Can DWP take money from your wages?

Yes, the DWP may look to recover overpayments by taking money directly from your employment income. This is called a Direct Earnings Attachment (DEA).

The DWP requests your employer to deduct an amount from your salary and send it to them instead.The amount goes towards repaying benefit debt.

However, DEAs can only be applied for certain types of benefits overpayments, including:

• Jobseekers Allowance (JSA)
• Employment and Support Allowance (ESA)
• Working Tax Credit
• Universal Credit
• Child Benefit

The DWP does not need to take you to court to set this up like other creditors would be required to do. However, the DWP will inform you that they will be taking money from your wages to clear the debt before starting. You’ll be informed in writing.

That said, you can usually avoid having money taken from your wages if you agree to a repayment plan instead.

How far back can DWP claim overpayments?

The DWP can usually only chase you to pay back overpayments that were made within the last six years. Any overpayments made to you more than six years ago are not typically recovered.

However, StepChange states that the DWP can use a Direct Earnings Attachment at any time for any previous debt.

Therefore, you could still end up having to pay back overpayments that were made to you over six years ago.

How far back can DWP claim pension credit overpayments?

The DWP can ask you to pay back pension credit overpayments within the last six years. But they could use a Direct Earnings Attachment to claim back older overpayments.

Pension credits are also a gateway to getting discounts elsewhere, including on council tax. Therefore if you wrongfully received credit payments, you might be contacted by the local authority to pay back the tax you avoided as part of the process.

How far back can DWP claim overpayments after death?

When someone dies, the DWP can ask the executor of the person’s estate to repay any benefit payments that were paid out after their death.

It’s quite common for the DWP to keep paying some benefits after the individual has passed away because they don’t get notified of the death immediately.

Moreover, the DWP can initiate a full investigation into the deceased’s estate to see whether they should have been receiving the benefit payments they received – and if they were receiving the correct amount. They can even ask for evidence of the person’s assets and finances over the last 12 years.

The DWP will aim to recover all the overpayments made to the deceased during their lifetime. Executors of the estate might wish to wait for DWP clearance before distributing monies from the estate.

Clearance can take anywhere between a few months to over a year, which is understandably frustrating.

But it will be the executor’s personal liability to pay the DWP debt, even if estate monies have already been distributed to beneficiaries.

Can you get a DWP debt written off?

A DWP overpayment debt can be written off if the overpayment was made over six years ago, or if repaying the debt is deemed detrimental to your or your family’s health and wellbeing.

For example, if repaying the debt is impossible without causing severe financial hardship to you or your children, the DWP will consider writing off the DWP debt. It’s not common for DWP debts to be written off because flexible and long-term repayment plans can be offered.

How far back can the DWP claim overpayments? (Recap)

In general, the DWP will only try to recover overpayments made to you within the last six years. But in theory, they can try to recover any overpayments made to you by taking money directly from your wages.

For more information about dealing with DWP debts and others, check out our debt help hub.

Remember, help is available if you’re struggling with benefit overpayments or arrears. Contact an independent debt charity like StepChange or Citizens Advice for expert advice.