Recovery of universal credit overpayments
The DWP can recover universal credit overpayments from claimants through deductions from benefits or earnings, or by taking legal action.
What is an overpayment
An overpayment occurs when a claimant receives more benefit than they are entitled to.
When the Department for Work and Pensions (DWP) decides that there has been an overpayment, it calculates the amount by taking the money the claimant was paid for that period and subtracting the amount that the claimant was entitled to in that period.
In most cases involving overpayments of universal credit, the DWP can make the claimant pay the money back, regardless of why the overpayment happened or whose fault it was.[1]
There is no legal time limit for the DWP to recover the overpayment, though statutory time limits apply to recovering the debt through court action.[2]
Other debts which are treated as overpayments
Debts that are also treated as overpayments, and which can be recovered via the same methods, include:
advances that were paid while the claimant was in receipt of another benefit before they claimed universal credit[3]
recoverable hardship payments which were made while the claimant was subject to a sanction[4]
civil penalties imposed by the DWP due to negligently providing incorrect information or failing to provide information without reasonable excuse[5]
financial penalties in suspected fraud cases where these are accepted by the claimant as an alternative to prosecution[6]
Establishing an overpayment
Where an overpayment arose because the DWP originally decided to award a claimant an amount of universal credit that they later decide is incorrect, they must first revise or supersede the original decision before the overpayment can be recovered.[7]
Revising the decision means the original decision is overturned and replaced with a new decision. Supersession means the original decision still stands but a new decision takes effect at a later date due to a change of circumstances. In both cases the DWP must notify the claimant of the new decision.
Find out more about universal credit and changes of circumstance on Shelter Legal.
Challenging overpayments
The claimant has a right to request a mandatory reconsideration of the decision that there has been an overpayment. If the decision is upheld on reconsideration, the claimant can appeal the decision to the first tier tribunal.
Find out more about the ways to challenge a universal credit decision on Shelter Legal.
When the DWP can recover an overpayment
The DWP can recover all universal credit overpayments regardless of the reasons they arose.[8] It is DWP policy to recover all debt where it is reasonable and cost effective to do so.[9]
DWP guidance states that when a claimant is experiencing severe hardship or ill health because of the repayments, it can consider whether to:[10]
temporarily suspend recovery
reduce the recovery rate
write off or waive the debt
Applications to waive recovery
The DWP has discretion to choose not to recover an overpayment, though it is rare for it to exercise this discretion. DWP policy is to only grant a waiver in exceptional circumstances, where there are specific and compelling grounds to do so.
Applying for a waiver can be done through the online journal or contacting and writing a letter to the DWP's Debt Management. Guidance on how to apply for a waiver is contained in chapter 8 of the DWP Benefit Overpayment Recovery Guide on Gov.uk.
The claimant can ask for a reconsideration of a decision not to waive recovery. They do not have a right to appeal to the tribunal.[11] Some decisions can be challenged by judicial review.
There is no exhaustive list of all circumstances the DWP can consider when deciding whether to waive recovery. Paragraph 8.6 of the Overpayment Recovery Guide provides some examples.[12] Examples include:
the debtor’s circumstances and those of their household
whether the debtor still has the money and what they did with it
DWP conduct
the debtor's conduct
whether there was any misrepresentation or fraud
any other factor which appears relevant to the decision maker, or which indicates recovery would not be in the public interest
Who the overpayment is recovered from
In most cases the DWP has the option of recovering an overpayment from the claimant. In some cases it can recover the overpayment from another person such as the claimant's landlord.
When the UC claim is a joint claim and the overpayment can be recovered from the claimant, both claimants are jointly and severally liable. In the event of a relationship breakdown, DWP policy is to split liability for the debt between each claimant in equal shares.[13]
Recovery of a housing costs element overpayment
Most overpayments of the housing costs element are recoverable from the claimant. The overpayment can be recovered from the claimant's universal credit.
Some overpayments of the housing costs element are also recoverable from the claimant's landlord.[14] This can occur where the DWP paid the housing costs element directly to the landlord and one of the following conditions are met:
| Payment was made directly to the landlord and the overpayment was due to: | Recovered from: |
|---|---|
| A change of address | Landlord or claimant |
| Misrepresentation or failure to disclose | Person who misrepresented or failed to disclose |
| payment in excess of rent (and not due to either of the above reasons) | Landlord only |
| Any other reason | Claimant only |
Overpayments where the landlord is guilty of an offence
A landlord who has been found guilty of an offence relating to the overpayment or has agreed to pay a penalty as an alternative to prosecution:[15]
must treat the claimant as having paid the amounts that have been deducted
cannot put the claimant into arrears for the amounts that have been deducted
The DWP must notify both the landlord and the claimant of this.[16]
Another tenant's overpayment is being recovered from the landlord
The DWP can make a deduction from the claimant's housing costs element to recover an overpayment owed by a different tenant of the same landlord. The landlord must not pursue the tenant with the deduction for rent arrears.
Ways the overpayment can be recovered
The DWP has a variety of methods at its disposal to recover UC overpayments, such as deductions from UC payments, deductions from earnings, and enforcement through the courts.
Deductions from the UC standard allowance
Where the claimant is still receiving UC the DWP can recover an overpayment by making a deduction from the claimant's award.[17]
The repayment amount for benefit overpayments is worked out as a percentage of the standard allowance. The regulations allow the DWP to deduct a maximum of 40 percent of a claimant's standard allowance to repay an overpayment.[18]
The DWP's current policy is to limit deductions to 15 percent of the standard allowance.[19]
No amount of deductions for overpayments can reduce the claimant's monthly award of universal credit below one penny.[20]
Deductions from the housing costs element to recover overpayments
Where the overpayment is recoverable from the landlord, the DWP can recover the overpayment by making a deduction from the housing costs element. This is not subject to any percentage maximum, and the whole housing costs element can be deducted.[21] This can result in a rent shortfall.
Where the DWP recovers the overpayment from the landlord, any resulting debt is only counted as rent arrears if the tenancy agreement specifies that overpayments recovered from the landlord can be charged as rent. If not, then the debt can be charged to the claimant's rent account, but it would not be considered rent lawfully due for the purpose of seeking possession for rent arrears.[22]
Find out more about rent lawfully due on Shelter Legal.
Deductions from universal credit paid in arrears
Where the claimant has received universal credit payments in arrears, the DWP can make deductions from this money to recover overpayments. This is not subject to any percentage maximum unless the arrears have been paid as a result of the lifting of a suspension of benefits.[23]
Deductions from earnings to recover overpayments
Where the claimant has been unable to make an arrangement with the DWP to make repayments and is in PAYE employment, the DWP has the power to recover overpayments of universal credit by making a direct earnings attachment (DEA). This allows the DWP to recover money from the claimant's employer via a deduction from their wages.
Direct earnings attachments are normally only used where no other method of recovery is available. As a matter of policy, the DWP does not usually consider a DEA without the claimant's consent unless the claimant does not agree to a voluntary repayment plan.[24]
Where the DWP obtains a DEA because the claimant's benefits are not high enough to allow them to take the deductions from their benefits, DWP policy is to limit the amount they recover. The limitation is based on the amount that would normally have been recovered through a deduction from benefits. [25]
The maximum percentage rate of deductions varies based on the amount the claimant is earning and whether the claimant has been found guilty of an offence. The deduction must not leave the claimant with less than 60% of their wages.
Detailed guidance on how direct earnings attachments are applied for and calculated can be found in the DWP guidance Direct earnings attachment: a guide for employers on Gov.uk.
Legal action to recover overpayments
Where an overpayment is recoverable, the DWP can recover the overpayment through the courts as if it were payable under a County Court Judgment (CCJ).[26]
The overpayment is registered for enforcement purposes only. The claimant cannot apply to the court to pay the debt by instalments or set aside the judgment, because it is not an order of the County Court. It is not registered as a CCJ on the Register of Judgments, Orders and Fines.
The DWP can recover legal costs from the claimant, and court costs incurred this way can be treated as part of the overpayment.
The court must enforce a decision from a relevant decision maker or tribunal. A procedural error in reaching the decision can be used by the claimant to object to the registration.[27]
The DWP cannot normally start court action to recover the overpayment through the courts if the statutory limitation period has passed.
The limitation period is six years from the later of:[28]
the date of the overpayment decision
the date of the overpayment notice letter, where a decision was not appropriate
any written acknowledgement of the debt by the debtor
the date of any voluntary repayment
Insolvency and overpayments
Claimants who are going through personal insolvency might be able to have their deductions from universal credit suspended or written off.
Bankruptcy and debt relief orders
Where a debtor is having deductions taken from their universal credit for debts, the Insolvency Service notifies the DWP that the claimant is subject to insolvency.
Personal insolvency solutions include:
bankruptcy
debt relief orders (DROs)
individual voluntary arrangements (IVAs)
Chapter 6 of the Benefit overpayment recovery guide provides guidance on how insolvency affects the DWP's recovery of overpayments.
It is DWP policy to suspend deductions for overpayments during an insolvency period. Whether an overpayment is written off at the end of the insolvency period depends on when the overpayment was accrued and if it was included as part of the insolvency solution.[29]
Overpayments incurred through fraud are not discharged after bankruptcy or a DRO.[30]
Breathing space
During a breathing space moratorium, the DWP must suspend recovery of overpayments and must not start any new deduction. They may resume recovery once the moratorium period has ended.[31] Overpayments incurred through fraud do not have to be suspended.[32]
Find out more about how breathing spaces, bankruptcy and DROs impact benefit overpayments.
Last updated: 3 February 2026