THOUSANDS of people have been told to pay back benefits – but they do not owe a penny, a Sun Money investigation has found.
This week we reveal how repayment demands of up to £22,000 have been made by the Department for Work and Pensions or HM Revenue & Customs, but have turned out to be a mistake.
As experts now say this could be a “widespread” issue, Laura Purkess explains what to do if you receive a repayment letter.
LAST year, £9.7billion in benefits was overpaid, up from £8.3billion in 2023, according to government figures.
The majority, £7.4billion, was due to fraud, £1.6billion was down to claimants’ mistakes and £800million was government error.
But Sun Money has now seen a number of cases where mistaken demands for huge sums of money have been made by the DWP and HMRC.
We have given them a dossier of errors to investigate and asked them to conduct an urgent review.
The mistaken overpayment demands are for pension credit, tax credits, Personal Independence Payments and Universal Credit.
The DWP waived 77 overpayment cases worth a total of £840,000 last year because of errors, a freedom of information request by Sun Money revealed.
EXPERTS now fear these mistakes could be affecting many more people who are paying back money they don’t owe.
Steve Webb, former pensions minister and partner at financial services firm LCP, said: “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.”
Meanwhile, debt charities say they are receiving thousands of calls from people who have been told to pay back benefits.
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.”
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.
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 Sun Money intervened on his behalf, the DWP admitted it was a mistake.
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 found the overpayment demand should not have been sent.
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.”
We have also seen cases where taxpayers have wrongly been told they owe hundreds of pounds in unpaid tax.
Alison Jack, from Newport, Shrops, fought with HMRC for five years about £509 in unpaid tax, despite providing information to prove she did not owe it.
When Sun Money got in touch with HMRC, it turned out there was a mistake with her records and she only owed £144, although it 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. We are committed to correcting any individual errors as swiftly as possible.”
IF you are sent an overpayment demand you do not think is right, you can ask the department to reassess your case, or you can appeal.
A “mandatory reconsideration” 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 Sun Money: “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.”
Shelley Hopkinson, from charity Turn2us, said: “The DWP must take swift action to resolve this issue and not penalise claimants further for administrative errors.”
The DWP said: “We are determined to reduce fraud and error.
“Only 0.3 per cent of our overall benefit spend is overpaid due to official error.”
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.
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 Sun Money intervened, it emerged he had not done anything wrong when he applied for the benefit, or since.
The fault lay with the DWP.
After almost five months of communications going back and forth, the DWP 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.
A spokesman 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.”
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.
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.
A DWP spokesman said: “We carefully balance our duty to the taxpayer to recover overpayments, and safeguards are in place to help people manage repayments.”
