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Housing Benefit overpayments (Scotland)
This fact sheet covers Scotland. You will need different advice if you live in England & Wales.
This fact sheet explains what a Housing Benefit overpayment is and the possible ways to deal with an overpayment.
Use this fact sheet to:
- understand why you may have a Housing Benefit overpayment;
- know how you may be able to appeal an incorrect Housing Benefit overpayment decision;
- see what options you have to deal with a Housing Benefit overpayment; and
- find out how the overpayment may be recovered.
What is a Housing Benefit overpayment?
A housing benefit overpayment can happen if you get more Housing Benefit than you are entitled to. Housing benefit overpayments are owed to and collected by your local council.
Overpayments may occur for a variety of reasons, for example, because:
- the councils benefits officer making a mistake;
- another benefit office making a complaint;
- the information you gave the benefit office may have been incorrect; or
- you didn’t inform the benefit office of a change in circumstance which would have meant your benefit would reduce or stop.
Usually all Housing Benefit overpayments need to be repaid unless they were caused by an official error that no ‘relevant person’ has contributed to and that no ‘relevant person’ could reasonably have been expected to know about.
- An official error would usually be caused by a mistake by the council or the Department of work and pensions (DWP) when making a decision.
- A ‘relevant person’ could be you, someone who acted on your behalf or someone to whom the payment was made (usually your landlord).
The overpayment is recovered by the council, who should send a decision notice to any person it is recoverable from. The decision notice provides details of the amount owed and reason for the overpayment. The council should also inform you of your right to ask for more information or appeal the decision.
Knowing whether you were overpaid or not can be difficult to work out. If you do not have enough information to be sure that you were overpaid or why you were overpaid, you can ask for a statement of the reasons for the overpayment. You must do this within one month of the overpayment decision. The council have 14 days to provide the information requested.
If you are still unsure whether the overpayment is correct or caused by an official error, you should speak to a benefit adviser.
Who is liable for the overpayment?
An overpayment is recovered from the person to whom it was paid. This maybe you or your landlord. However, other people may also be asked to pay the overpayment.
- If an overpayment was made because someone gave information that was wrong or left out relevant information, the overpayment can be recovered from this person.
- If the overpayment was caused by official error and the person to whom the payment was made could have reasonably been expected to recognise the overpayment, the overpayment can also be recovered from this person.
- If you lived as a couple at the time of the overpayment, the overpayment can be recovered from Housing Benefit paid to the partner.
Recovery of overpayment from your landlord
If the council paid the overpayment of Housing Benefit directly to your private landlord, the council can recover the overpayment directly by taking (deducting) it from future payments of Housing Benefit from you or any other of the landlords’ tenants. The council can also recover the overpayment from the landlords own housing benefit if they claim it.
Your landlord may try to recover this deduction in Housing Benefit from you directly. They may also claim that you are in rent arrears because of the deduction. Whether you owe your landlord the money that has been taken in deductions is a grey area. Even if your landlord says that the money is owed, they should not treat the debt as rent arrears. If your landlord asks you to pay towards the deductions or says they are rent arrears, contact Shelter Scotland for specialist advice.
If you are a council tenant, the above will not apply. However, the local authority can add the overpayment as a debt to your rent account. If this happens, the amount should not be classed as rent arrears and should not be used in any case for eviction. If the council threats this, contact Shelter Scotland for specialist advice.
Challenging a Housing Benefit overpayment
You can challenge a housing benefit overpayment decision by asking the local authority for a revision. A revision is when the council looks at the decision again and decides to change it .
Check your council’s website or call them to find out how to make an application; they might ask you to fill in a form or write a letter. You can find your council’s website on GOV.UK. You can also start the appeal process by visiting the GOV.UK web page.
Outline why you think the decision is wrong and provide as much as evidence as you can to support this. If you think the outcome of the revision is incorrect, you can appeal to the First-tier Tribunal. An appeal is when you ask the valuation tribunal to consider the councils revision decision.
Time limit for revisions
You have one month from the overpayment decision to ask for revision (to consider the decision). This is called an ‘any grounds’ revision where the council will look again at your circumstances when the decision was made. If you have asked for a statement of the reasons for the overpayment; the time taken for the council to send this will be added to the one month time scale.
If you are outside the one month deadline but it is less than 13 months from the overpayment decision, you may still be able to apply for an ‘any grounds’ revision if you have a sufficient reason why your application is late.
If it has been more than 13 months, you’ll need to show that the council has made a mistake to be able to apply for a revision. This could be because the council got the law wrong or overlooked some evidence you may have sent them. This is called a ‘specific grounds revision.’
Speak to a benefits adviser to make sure you have grounds if you plan to request a revision.
If you believe the decision the council has made is incorrect, you can appeal to the First-tier Tribunal. You should contact your council about appealing the decision. The council should forward your appeal to HM courts and Tribunal’s service.
Supply any documents that support your appeal that have not already been given to the council, and a summary of why you think the decision is wrong.
- You can request to attend the hearing when you make the application if you wish.
- The Tribunal must deal with the case fairly and justly.
- The Tribunal can ask you or the council for further information to help them make a decision. It is important to respond to any request or your appeal could be struck out.
- You can have a representative who can help present your case to the Tribunal. You’d need to give the Tribunal written notice of this at least 14 days before the hearing.
Time limits for appeals
You must make the appeal no later than one month after the date you have been sent the revision notice . Applications after one month but before 13 months may be accepted if you have a good reason and it is in the interests of justice. Explain why your application is late when you apply. It is not possible to apply after 13 months. You will receive a decision notice; this will detail the tribunals decision and the reasons for it. If you have won, the council should carry out the tribunal’s instructions straight away.
Speak to a benefits adviser if you plan to appeal a decision through HM courts and Tribunal’s service.
If you need time to get debt advice and find a debt solution, you may want to consider applying for breathing space.
Breathing space will stop most types of enforcement and also stop most creditors applying interest and charges for 60 days.
To find out more, see our Breathing space fact sheet.
Deduction from benefits
The council can recover the overpayment from an ongoing Housing Benefit claim. This could be from whoever is liable; for example, from you, the landlord or your partner (if you were a couple at the time of the overpayment and at the time of the deduction).
The maximum weekly deduction from Housing Benefit payments is:
- £19.25 where the overpayment resulted from fraud or you have agreed to pay a penalty; and
- £11.55 in any other case.
The amount deducted can increase if you receive earned income, charitable payments or a war/bereavement pension. Shelter cover this in more detail on their website.
The maximum that can be deducted from Universal Credit each month is 25% of your standard allowance. Your standard allowance is the basic amount your household will receive each month before any additional payments are added for things like childcare.
The maximum that could be deducted is 40% of your standard allownace. However, in practice most deductions tend to be at either:
- 25% if you have earned income or have been found guilty of an offence, agreed to pay a penalty or accepted a caution; or
- 15% in all other cases.
For benefits other than Housing Benefit and Universal Credit, there is no maximum amount that can be deducted. However, the amount should be reasonable.
If the amount you are paying back is causing financial difficulty, you can contact your council and ask for a reduction in the rate of recovery. This request needs to include Your budget and any evidence to support your situation. If the council are unhelpful, you could consider making a complaint. You can start a complaint through the GOV.UK website.
Deduction from earnings
Overpayments can also be recovered from your wages. You and your employer will be sent a notice setting out how much will be deducted. The deduction will be a percentage of your net income (after income tax, class 1 National Insurance and pension contribution deductions). You can find the amount you should have deducted and more information about deductions from earnings on the GOV.UK website.
If the amount being recovered is causing you financial difficulty, you can contact your council to ask them to use their discretion to reduce the amount of the deduction. Use Your budget to show why you are asking for the amount to be reduced. If the council are unhelpful, you could consider making a complaint. You can start a complaint through the GOV.UK website.
You should not be left with less than 60% of your net earnings. This is called the protected earnings proportion. If you are being left with less than this, send a written request to your employer asking how the deduction has been calculated. Your employer should provide the information within 28 days.
While not common, the council can take you to court to obtain a county court judgment (CCJ). This would usually only be done if you are no longer claiming benefits and you cannot agree a repayment plan with the council.
See our Replying to a County Court Claim factsheet.
Again, it is not common but sometimes a different court process is used to collect debts in the County Court. You may receive an N322 court form. If this is happening, contact us for advice. An N322 is not a CCJ and will not affect your credit file.
In cases of financial hardship, the council may agree to write off the overpayment, although this isn’t common. Writing the overpayment off would mean that the debt is no longer owed.
You will need to show the local authority Your budget, evidence how you will be unable to meet your essential living costs and provide evidence of any physical or mental health problems.
Penalties and fraud
If you have deliberately withheld information or given false information, you may be convicted of fraud. Where an overpayment is found to be the result of fraud in relation to the claim, you could face a criminal prosecution. If you are suspected of fraud, seek legal advice from a solicitor.
You may be asked to attend an interview and your benefits maybe suspended while you are investigated. The length of suspension time will depend on the circumstances of your case.
If you haven’t committed fraud but the overpayment has been caused because you gave an incorrect statement or incorrect information and did not try to correct the error, you may receive a civil penalty. The overpayment will also need have occurred after 1 October 2012 and be more than £65.
The Prescription and Limitation (Scotland) Act 1973 sets out the rules on how long a creditor (who you owe money to) has to take certain action against you to recover a debt.
Time limits for the recovery of Housing Benefit overpayments are complicated. You may need legal help to check whether an overpayment can still be recovered from you. Contact us for advice about finding the right type of legal help
HMRC can recover overpayments from some benefits and wages without taking court action.
GOV.UK for information on finding legal advice www.gov.uk/find-legal-advice
Shelter Scotland for specialist hosing advvice Phone 0808 800 4444 Shelter Scotland
Turn2us for information on finding a benefits adviser https://advicefinder.turn2us.org.uk/