What is an overpayment?
An overpayment is an amount of benefit that has been paid to a person who is not entitled to it.
How does an overpayment occur?
An overpayment may arise for a variety of reasons, including:
- late notification of Income Support or Income Based Jobseekers Allowance ending
- an unreported change in the status of a child or young person
- an unreported increase in income or capital
- an unreported change in the number of persons in the household
- late notification of a partner joining or leaving the household
- a delay in reporting any change in a person’s circumstances that would reduce, or bring to an end, a person’s entitlement
- an ‘official error’ (an error caused by the Local Authority, or by the Department for Work & Pensions, to which the claimant, or the person to whom payment was made, did not contribute)
Chris and Vicky have been receiving Housing Benefit of £130 per week. When they made their benefit claim Chris was off sick from his job and Vicky was a housewife.
Vicky then started work earning £125 per week - but this change in their circumstances wasn’t reported to the Council until 7 weeks later.
When their benefit was reassessed to include this extra income their Housing Benefit reduced to £48.75 per week and they no longer qualified for Council Tax Support.
This meant that they had been overpaid Housing Benefit of £568.75 (7 weeks at £81.25 per week).
The Council Tax bill was recalculated from the date of change and a penalty of £70 was added.