Social Security Benefits: Overpayments

Department for Work and Pensions written question – answered on 28th July 2022.

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Photo of Lord Allen of Kensington Lord Allen of Kensington Labour

To ask Her Majesty's Government what steps they are taking to ensure that families who receive no fault overpayments of benefits are not faced with additional costs when repaying the overpayments; and whether those steps include updating guidance to benefits staff, including around the discretion in the Social Security Administration Act 1992 and Her Majesty’s Treasury guidelines Managing Public Money, to make a presumption of non-recovery of such overpayments during the current period of rising cost of living.

Photo of Baroness Stedman-Scott Baroness Stedman-Scott The Parliamentary Under-Secretary of State for Work and Pensions, Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office)

The latest published statistics show that in 2021/22, Universal Credit Official Error overpayments were at their lowest recorded level of 0.7%, having fallen for the 3rd year in a row.

Where overpayments do occur, Section 105 of The Welfare Reform Act 2012 states that any overpayment of Universal Credit, new style JSA or ESA in excess of entitlement, is recoverable.

The Department therefore seeks to recover benefit overpayments accordingly, but remains committed to doing so without causing undue financial hardship.

We have lowered the standard cap on deductions from Universal Credit twice over recent years, firstly from 40% to 30% in October 2019 and then to 25% in April 2021. We also ensure that any deductions are taken in priority order, which effectively means that higher priority deductions, such as utilities payments, are taken first, with debt only taking up the balance of the overall cap.

Where a person feels they cannot afford the proposed rate of recovery, and the debt has not arisen as a result of fraud, they are encouraged to contact us. The Department can work with them, reviewing their financial circumstances and in most instances, agreeing a temporary reduction in their rate of repayment. We have recently extended the time period for any reduced repayment of this type to remain in place.

Whilst the Department does have discretion to waive recovery of debt, guidance is clear that this is only intended to happen in exceptional circumstances.

This guidance, which can be found at Chapter 8 of the Benefit overpayment recovery guide on the GOV.UK website, was updated in 2022 to ensure that all appropriate factors are taken into account when a case is being considered for waiver. We are looking to strengthen Operational guidance to ensure agents are aware of when a case is appropriate for waiver consideration.

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