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Overpayments: From Claimant?
Regulation 4 of the Social Security (Overpayments and Recovery) Regulations 2013 describe when an overpayment can be recovered from the person to whom it was paid or to the claimant, or someone else - this could include a partner, an appointee, and the landlord in some limited circumstances where housing costs are paid to landlord - click here.
How?
Where the DWP are seeking recovery of the overpayment from the claimant, it can be recovered in the following ways: 

  • Deduction from on-going benefit.
  • Deduction from earnings.
  • Adjustment of benefit.
  • Through the court.


Information on each method below.

From on-going benefit
A Universal Credit overpayment may be recovered by deducting an on-going amount from a prescribed benefit- this might be Universal Credit or it might be another benefit. Deductions can be made from most benefits, but not from Child Benefit or Guardian's Allowance.

The maximum amount that can be deducted from Universal Credit for an overpayment is normally an amount equal to 15% of the standard allowance, however it can be more ie 25% if the claimant is earning, or 40% if the overpayment has resulted in a finding or acceptance of guilt for an offence, or in respect of which the individual has accepted an administrative penalty as an alternative to prosecution. 

Where the rate at which the overpayment is being recovered is causing the tenant significant hardship so that they cannot afford their essential expenditure they can write in and request a lower recovery rate. If the DWP agree they will review this on a regular basis. Standard Letter UC OP2.
Attachment of earnings
The Regulations detail how recovery from earnings may be made - note that they do not require a Court to order this method, under the 'DEA' (Deduction from Earnings) process. More info in the employers' guide here. 

The DWP will send a notice to the claimant and their employer to say how much is to be deducted; the most that can be deducted - where the overpayment is not fraudulent - is an amount equal to 25% of the claimant's standard allowance. The claimant's wage must not fall below a protected amount - which is 60% of their net wage. The employer can also deduct a £1 admin charge from the claimant's earnings each time it makes a deduction for an overpayment. If the claimant thinks the level of deduction is too high they can write in to the DWP with details of their income and outgoings and ask for it to be lowered.
If someone has been overpaid benefit and has been found guilty of an offence -  the regulations say “whether by statute or otherwise” - then the rate of deductions from their employer depends on how much they earn.

Where paid weekly, see Table C for the percentages. Where paid monthly, see Table D. However a lower amount can be specified by the appropriate authority. The Social Security (Overpayments and Recovery) Amendment Regulations 2013.

 

TABLE C: % OF NET EARNINGS DEDUCTION (PAID WEEKLY)

£100 or less

5%

Exceeding £100 but not exceeding £160

6%

Exceeding £160 but not exceeding £220

10%

Exceeding £220 but not exceeding £270

14%

Exceeding £270 but not exceeding £375

22%

Exceeding £375 but not exceeding £520

30%

Exceeding £520

40%



TABLE D: % of NET EARNINGS DEDUCTION (PAID MONTHLY)

£430 or less

5%

Exceeding £430 but not exceeding £690

6%

Exceeding £690 but not exceeding £950

10%

Exceeding £950 but not exceeding £1,160

14%

Exceeding £1,160 but not exceeding £1,615

22%

Exceeding £1,615 but not exceeding £2,240

30%

Exceeding £2,240

40%



Part 6 of the Regulations  include requirements on the overpaid claimant and on their employer, for example requiring the overpaid claimant to disclose details of their employer; and requirements on the employer to make the deductions and pay them to the DWP, to keep records, to notify the DWP if their employee leaves etc. And Schedule 2 lists the deduction rates, which increase in line with earnings. 
Adjustment of benefit
A Universal Credit overpayment can be recovered by reducing an amount of arrears of benefit that is owed to the claimant.
In this case the maximum amounts detailed above do not apply (paragraph 8 of the Social Security (Overpayments and Recovery) Regulations 2013.

Court action
Where the DWP are unable to recover the overpayment by deductions from on-going benefit or earnings then they can recover a Universal Credit overpayment through the courts.

The DWP's court costs can be added to the overpayment.

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