Repaying benefit debts and overpayments

If you think you’ve been overpaid benefits, it’s important to report it as soon as possible. The longer you leave it, the more money you may have to pay back.

Report an overpayment of Housing Benefit or Council Tax Reduction to your local authority. Find your local authorityOpens in a new window on GOV.UK.

Contact the office paying your benefit as soon as possible and let them know if you think you’ve been overpaid.

The overpayment might have happened because of:

• a mistake by the DWP when your benefits were worked out
• wrong information, or not enough information, when you made your claim
• a change of your circumstances, such as moving in or out with a partner, new job or a child leaving home.

Although tax credits ended in April 2025, old debts can still be recovered by HMRC, going back up to 6 years. For example, there may be a dispute between you and an ex-partner as to who is responsible, or who was at fault for the overpayment.

To understand how old debts can still be recoveredOpens in a new window visit the Low Incomes Tax Reform Group website.

Usually yes. Depending on the benefit, there are different rules around paying back an overpayment.

It doesn't matter whether the overpayment was your fault or due to an error by the DWP, in both cases you will usually be asked to pay it back. 

If the overpayment wasn’t your fault, for example an administrative error, you’ll usually be asked to pay it back as well.

However, if you think the amount you received is correct you do have the right to argue that you haven’t been overpaid and challenge the decision. See our section on ‘How to challenge an overpayment decision’.

In a small number of cases each year, the DWP can agree that you do not have to repay the money if you are undergoing hardship.

You will normally have to pay back a Housing Benefit overpayment even if it wasn’t your fault or you didn't know you were being overpaid.

Find out more about what happens if the council says you've had a Housing Benefit overpaymentOpens in a new window on the Citizens advice website. 

Your council has the power to write-off the overpayment if the mistake was clearly theirs or repayment would cause you extreme hardship.  

Find out more about paying back a Housing Benefit overpaymentOpens in a new window on the Citizens Advice website.

Overpayments of Council Tax Reduction are treated as Council Tax arrears. The rules for how they need to be repaid vary depending on where you live.

Find out more about Council Tax Reduction overpaymentsOpens in a new window at Turn2us.

For all other benefits, you’ll have to pay back the overpayment if you gave the wrong, or incomplete, information when you made your claim, even accidentally.

However, where the overpayment is due to a DWP mistake, that is called an ‘official error’ and the DWP can't demand repayment.

You also have the right to argue that you haven’t been overpaid and challenge the decision. See our section on ‘How to challenge an overpayment decision’.

You’ll get a letter – or a message in your online account – about your overpayment. This will explain how much you were overpaid and for how long.

If you're repaying the amount you owe by taking the money out of current benefits, the way your repayments are worked out is different depending on which benefit has been overpaid:

• For Universal Credit, it can’t be more than 15% of your standard allowance.
• For Housing Benefit – if it’s paid to you, the repayments are usually £14.40 a week (2026/27). If it’s paid direct to your landlord, they usually have to pay it all back in one go and you’ll have to agree a repayment plan with your landlord.
• For other benefits, such as Pension Credit, the repayments are usually £14.40 a week (2026/27).

The Public Authorities (Fraud, Error and Recovery) Act 2025 is a new law that came into force in June 2026 and means that if you don’t pay back your benefit debts, the money you owe can be taken directly from your bank account without a separate court order.  The DWP will only be able to do this if you’re not getting benefits or in a Pay As You Earn (PAYE) job. 

Before it takes money from your account, the DWP will first try to recover the money you owe by either:  

• deducting  money from benefits you receive  
• deducting money from your wages if you are paid by PAYE. This route must still leave you with at least 60% of your net earnings, see how much can be deductedOpens in a new window on GOV.UK. or,  
• getting in touch with you and asking you to pay by an agreed deadline.  

Do not ignore letters from the DWP asking you to pay your debt. 

If you cannot pay, you should contact the DWP Debt Management team to set up a payment planOpens in a new window

• The DWP will try at least four separate times to contact you, telling you how much will be taken and when.  
• Even at this stage you will still be able to contact the DWP and discuss your situation.  
• The DWP will provide the option to a payment arrangement via your online Repaymydebt portal.  
• After this the money can be taken directly from your account.  

In some cases, where your debt is £1,000 or more, a court can issue you with a driving ban. This is the last resort, for example if the DWP think you have funds in your account but have moved the money elsewhere to avoid the deduction. If driving is essential to you, for example you work as a courier or have caring responsibilities, you cannot be disqualified. 

If you do have money taken, and find that you’re struggling, it’s important to reach out for support as soon as you can.

Contact a free debt adviser for help. They can explain all the different available options to you, so you can make an informed decision. Use our Debt advice locator tool to find free and confidential debt advice online, over the phone or near to where you live. 

If the overpayment is your fault, or you didn’t try to correct a mistake, you might be charged a penalty of £50 on top of the money you have to pay back.

You can appeal against a decision to charge you a penalty. 

You can ask for the decision to be looked at again and appeal against it, if:

• you don’t agree that you’ve been overpaid
• you don’t agree with the amount
• you don’t think you should have been charged a penalty.

Find out how to challenge a benefits decisionOpens in a new window on the Citizens Advice website.

You might have received an advance payment while you were waiting for your first Universal Credit payment to come through.

Your repayments will probably start from your first full Universal Credit payment, although they can be delayed up to three months if you’re in financial crisis.

You can make the repayments over a maximum of 24 months. And they can be up to 15% of your Universal Credit basic allowance. This is called the Fair Repayment Rate. 

You might have had a Budgeting Advance to help with emergency household costs or to pay towards a funeral.

Your repayments will have started straight away after receiving the advance. They are taken out of your Universal Credit payments.

They are usually spread over 12 months, but this can be extended by an extra three months if needed.

You might have received a Budgeting Loan to help pay for a household appliance or to help with the cost of moving home.

Repayments usually spread over two years and are taken automatically from your benefits. The repayment amount is based on your income and what you can afford.

You might have had a Hardship Payment to help make ends meet if your benefit payments were reduced because of a sanction.

You only have to repay a Hardship Payment if you’re on Universal Credit (not other benefits). They’re repaid out of your future payments and they can be up to 30% of your Universal Credit basic allowance.

Before repaying a benefit debt, speak to a free debt adviser to make sure you can afford the repayments. Use our Debt adviser locator tool to find free and confidential debt advice online, over the phone or near to where you live.

Benefit debt repayments can be made by:

• deductions from your benefit payments
• making payments through online banking, Direct Debit or standing order.

If none of these are possible, the debt can be recovered from your wages or passed onto a debt collection agency.

If you’re struggling, or worried you might, speak to a free debt adviser.  

A debt adviser can give free and confidential debt advice online, over the phone or near to where you live. They will:  

• treat everything you say in confidence 
• never judge you or make you feel bad about your situation  
• suggest ways of dealing with debts that you might not know about 
• check you’ve applied for all the benefits and entitlements available to you.

If you don’t have enough to live on because of the repayments you’re being asked to make, you can ask for them to be reduced.

If you’re repaying a Universal Credit advance payment, call the Universal Credit Helpline or log into your online account and add a note to your journal asking for your repayments to be reduced.

Debts such as rent arrears, overdue energy bills, and unpaid Council Tax are called priority debts. This means the consequences of not paying them off are more serious.

If you’ve got more than one priority debt, it’s important to get advice as soon as possible.

Our Bill prioritiser also helps to sort out which ones you need to deal with first.

Find out more in our guide How to prioritise your debts.