UK: Recovery of Benefit Overpayment Suspended

UK: Recovery of Benefit Overpayment Suspended

The Department for Work and Pensions has temporarily paused the recovery of benefit overpayments for three months.

Following the COVID-19 outbreak, this change communicated by the UK Government means many claimants will see an increase in the amount of money they receive in benefits during the outbreak.

Following a significant increase in claims over the last two weeks, it is said that this move will also allow the department to move a significant number of staff to front line roles, so it can focus on getting money to those who need support.

Deductions for the recovery of Universal Credit and legacy benefit overpayments, Social Fund loans and Tax Credit debts will be paused.

The majority of deductions will be suspended automatically, however if employers currently make repayments through a Bank Standing Order, Bank Giro Credit or through online banking, they should contact their bank to cancel their arrangement.

The recovery of advances by deduction from Universal Credit payments will continue.

A significant number of debt recovery staff have been redeployed, with plans to release more in the coming days. 10,000 existing staff are being moved to front line roles and the department has announced it is recruiting more.

Additional information

  • The recovery of Advances by deduction from Universal Credit payments will continue.
  • Local Authorities will suspend referral of Housing Benefit overpayments.
  • The transfer of Tax Credit debt from HMRC has already been suspended.
  • Debt recovery activity will be stopping as soon as possible. This includes all benefit-related overpayments, Social Fund loans and Tax Credit debts. Many activities will cease immediately, but others may take longer to implement.
  • For citizens who are not on benefits, their private sector debt collection agencies have been directed to stop their activity for Debt Management customers.
  • Voluntary debt repayments and recovery by Direct Earnings Attachments are also being suspended.