Investigation
BENEFIT BLOW
We were told to pay back thousands in benefits nightmare – but the DWP got it WRONG
We reveal how a number of people have been asked to pay money back, but departments have later said this was a mistake
THOUSANDS of people may have been told to pay back benefits – but they don't actually owe a penny, an investigation by The Sun has found.
We can reveal how repayment demands of up to £22,000 have been made by the Department for Work and Pensions (DWP) or HM Revenue & Customs (HMRC), but have later turned out to be a mistake.
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As experts are now concerned this could be a more “widespread” issue, we explain what to do if you receive a repayment letter and how to challenge it if you believe you don't owe the money.
Benefit repayment demand nightmares
Last year, £9.7billion in benefits was overpaid by the government, up from £8.3billion in 2023, according to the latest official figures.
The majority, £7.4billion, was due to fraud, while £1.6billion was down to claimants’ mistakes and £800million was due to government error.
The government is entitled to recover overpaid benefits, though these demands often place huge financial strain on affected households.
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But The Sun has now seen a number of cases where mistaken demands for huge sums of money have been sent to claimants by the DWP and HMRC.
These include demands sent in error, demands sent due to mistakes while updating claimants' records and wrong amounts being requested due to incorrect records.
We have given the departments a dossier of such errors and have now asked them to conduct an urgent review to determine if others could be affected.
We have seen mistaken overpayment demands for Pension Credit, Tax Credits, Personal Independence Payments and Universal Credit, suggesting the errors are not limited to one area.
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The DWP waived 77 overpayment cases worth a total of £840,000 last year because of errors, a freedom of information request by The Sun can reveal, although this included some claimant errors.
A more widespread issue?
Experts now fear these mistakes could be affecting many more people who may be paying back money they don’t owe.
Steve Webb, former pensions minister and partner at financial services firm LCP, told The Sun: “It can be difficult for people to understand whether the demands they are being sent for overpayments are a mistake, as benefits such as tax credits and pension credit are so complex.
“If there are multiple errors being found, then this could suggest a more widespread issue.
“Departments need to conduct a systematic review to understand how they happened and whether they could have happened to anyone else.”
Meanwhile, debt charities say they are receiving thousands of calls from people who have been told to pay back benefits - and now they're concerned some of these cases could be mistakes.
Shelley Hopkinson, head of policy and influencing at support charity Turn2us, said: “These administrative errors cause severe distress, forcing households to choose between essentials like heating or food.
"We have heard from people who do not access the support they need because they fear being overpaid and facing debt or sanctions.
" The DWP [and HMRC] must take swift action to resolve this issue and not penalise claimants further for administrative errors."
Last year, debt counselling service Money Wellness said nearly 10,000 people sought advice after receiving a letter from DWP attempting to claw money back.
In one case we have seen, Robert Vincent, 75, was chased for a £22,000 pension credit overpayment and would have been paying it back until he was 86.
But after we intervened on his behalf, the DWP admitted it was due to a mistake with his records and cancelled the debt.
In another case, Steve Fellows, 66, was asked to pay back £1,100 in child tax credits from 15 years ago within 30 days.
But when we intervened, HMRC said the overpayment demand letter should not have been sent.
Julia Bell was asked to pay back £4,265 in overpaid Tax Credits.
But after we got in touch with HMRC, it admitted it had not updated her records accurately and found she actually only owed £1,881.
And a single mum won a months-long battle with the DWP after she was wrongly told to pay back thousands of pounds in Universal Credit that had been awarded in error.
PhD student Penny Davis appealed overpayment demands for £12,000 and found she was actually owed £2,000 in arrears.
Ruth Talbot, the founder of Single Parent Rights, said: “The DWP’s miscalculation of overpayments disproportionately impacts single parents who are more likely to receive Universal Credit.
"Many people impacted won’t have the tenacity of Penny to challenge the demands, leaving some people making repayments for debts that don't even exist."
All the freebies you can get on Universal Credit
We have also seen some cases where taxpayers have wrongly been told they owe hundreds of pounds in unpaid tax.
Alison Jack, from Newport, Shropshire, fought with HMRC for five years about £509 in unpaid tax, despite providing the requested information to show she did not owe it.
When The Sun got in touch with HMRC, it turned out there was a mistake with her records and she only owed £144, although the taxman said this was due to incorrect information from her employer.
A government spokesman said: “We are sorry for the mistakes made in these isolated cases, which have now been resolved.
"However, there is nothing to suggest this is a wider issue in the benefits system, which is used successfully by millions of people to get the support they need.
“We are committed to correcting any individual errors as swiftly as possible and there are clear routes by which claimants can contact us.”
How to fight a mistake
If you are sent an overpayment demand you don't think is right, you can ask the department to reassess your case, or you can appeal.
This is called a “mandatory reconsideration” and must be made within one month of being given the overpayment demand.
Explain why you think the decision is wrong and provide evidence to support your claim.
Consumer expert Martyn James told The Sun: “For far too long, the DWP and HMRC have been able to act as judge, jury and executioner when it comes to how they handle complaints.
“Yet when they make errors, they can be unfair and unreasonable. Until someone polices these huge, unaccountable departments, these situations will occur again, with virtually no comeback on the organisation that made the error.”
The DWP said: “We are determined to reduce fraud and error and are currently exploring all options on how best to achieve our goal. Only 0.3% of our overall benefit spend is overpaid due to official error.”
Robert Vincent's case
Pensioner Robert Vincent was told he would have to repay £22,000 after the DWP said he had made an error in his Pension Credit application six years ago.
The 75-year-old, from Porthcawl, Bridgend, was forced to cancel all his insurance policies so he could afford to buy food after the department said he had to repay £258.72 every four weeks until February 2030.
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After that, it said he would need to pay £105.17 until the debt was paid off.
The DWP had blamed him for providing incorrect information relating to his income when he applied for the benefit six years earlier.
But after The Sun intervened, it emerged he had not done anything wrong when he applied for the benefit, or since. The fault actually lay with the DWP.
After almost five months of communications going back and forth, the DWP eventually admitted it was one of its own staff members who made the error.
They had misheard Mr Vincent when he made his application over the phone, and then went on to write down the wrong amount for his pension income.
The DWP also acknowledged that Mr Vincent had spotted this discrepancy and flagged it several times between 2017 and 2023 – but no action was taken.
It agreed he didn't owe the money and cancelled his debt.
A spokesperson for the DWP said: “We issued a full refund of the money already recovered to Mr Vincent and apologise for the error in handling this case.”
Penny Davis' case
A single mum had her life “turned upside down” after the DWP asked her to pay back £12,382 in Universal Credit overpayments.
High school teacher Penny Davis, who lives in Loughborough, Leicestershire, with her three children, took the matter to an independent tribunal in December 2023.
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The DWP ruled she was not entitled to Universal Credit because she had been studying for a PhD, for which she earned a monthly payment.
Overpayment errors can occur in situations like Penny’s because PhD funding is not treated as income in the same way other earnings are, according to charity Single Parent Rights.
Yet after Penny, above, appealed the decision, the DWP admitted she was actually owed £2,000 in arrears.
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A DWP spokesperson said of this case: “We carefully balance our duty to the taxpayer to recover overpayments, and safeguards are in place to help people manage repayments.”
Additional reporting by Olivia Marshall
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