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9. My benefit has been overpaid. What do I do?

The rules on repaying benefit overpayments.

If you are paid too much benefit, you may be asked to repay it. This may happen if you don’t tell the agency about a change in your circumstances or if you give them wrong information – even by mistake.

If the problem is more serious, for example if you lie about your circumstances, you may be investigated for fraud, and may be prosecuted or fined.

Sometimes the agency dealing with your claim may make a mistake and pay you too much benefit. For most social security benefits, you have the right to appeal against having to repay an overpayment if you don’t think you have been overpaid. Even if you accept that you have been overpaid, you can ask the agency not to make you repay the extra if you have a good reason: for health reasons, or if you are in serious financial difficulties.

If you receive tax credits, you are expected to check your ‘award notice’ and the payments you receive, and to report any errors in them to the Tax Credit Office within one month.

If you don’t think you should have to repay a tax credit overpayment, you need to fill in a form called TC846, available from the Tax Credit Office, explaining why. If you can’t afford to pay the money the Tax Credit Office says you owe, you could ask if you can repay the money at a lower rate over a longer time, called ‘asking for additional payments’.

Unlike other benefits, you have no formal right of appeal against having to repay any overpayment. However, the Tax Credit Office may decide to write off some or all of the overpayment if the overpayment was because of its mistake. And you can appeal against a tax credit decision:

  • that adds interest to a tax credit overpayment;
  • that asks you to pay a penalty; or
  • if you think the amount of your tax credit (and therefore the overpayment) is wrong.

You could also complain if you think that the overpayment was caused or made worse by the Tax Credit Office not responding to information or delaying a reassessment of your tax credit.

All overpayment issues are complicated. If you have a problem to do with benefit overpayment, we recommend that you speak to one of our welfare benefit advisers on 08001 225 6653 for specialist advice. Telephone specialist advice is only available if you qualify for legal aid.

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