Universal Credit - Challenging Overpayments and their Recovery!

Good morning

In earlier bulletins, I’ve expressed concern over DWP’s creation of £6 Billion in UC overpayments in financial year 2020/21 and the detrimental impact its Debt Recovery practices could have on affected tenants’ disposable income, and their landlord’s revenue stream, especially in the current challenging financial environment. Worryingly, the 2021/22 overpayment figures are even higher, adding to the debt mountain and corresponding need for DWP recovery action. If you haven’t already experienced overpayment demands, you will, very soon.

Recovery can be achieved in a variety of ways. The most effective, from DWP’s perspective, is to recoup by making deductions from the tenant’s ongoing benefit award or by taking lump sums from landlords’ ongoing scheduled payments, utilising the “Blameless Tenant” approach.

In 2020/21, DWP and Local Authorities, administering Housing Benefit recovered around £1 Billion. Around 90% of this sum was achieved by adopting the methods mentioned above, causing, in some cases, financial hardship to tenants and cash-flow problems for landlords. The bad news is, DWP is about to make the problems even bigger by setting up specialist teams to enhance recovery of these overpayments.

DWP maintains it recognises the importance of safeguarding the welfare of those claimants who have already incurred debt. It points to the 25% ceiling that should be applied to protect tenants and 3^rd party rules relating to the hierarchy of debtors, which are designed to ensure debts like rent arrears, electricity, gas, fines etc are applied first, meaning overpayment recovery is put on hold until these other debts are cleared.

In my experience, that’s not what is happening. I receive many landlord client referrals, involving cases where DWP ignores its own guidance, by recouping DWP, HMRC and local authority overpayments, often at the expense of higher priority debts, like rent, service charges etc. At one point, DWP’s Director General argued rent was not the top priority 3^rd party debt, when his own guidance acknowledges it is!

Universal Credit - Overpayments & Recovery

We’ve created a 2-3 hour training event focused on Universal Credit & Housing Benefit Overpayments & Recovery, which will include, examination of:

1. How do Housing Benefit & Universal Credit overpayments occur?
2. How the UC rules on recoverability, significantly differ from Housing Benefit?
3. What DWP must do in terms of determining culpability and notifying both tenants and landlords.
4. How DWP propose to “recover” the alleged debt, even though Mandatory Reconsiderations and appeals have been lodged.
5. How can Overpayments be challenged by both tenants and landlords?
   1. Mandatory Reconsideration procedure & timescale
   2. Appeal – Lodging appeal with Tribunal Service
   3. Respective roles of DWP, Appellants and 2^nd Respondents
   4. 3^rd Party Deductions hierarchy, recovery suppression, and Secretary of State waiver in respect of hardship

Sessions last 2 1/2 hours , starting 10am-12.30pm

Teas/Coffees & snacks will be provided

Universal Credit - Overpayments and Recovery

The course should be of interest to all frontline staff (e.g. housing officers, income mangement, welfare rights, financial inclusion) who are engaged with assisting tenants claim and maintain their Universal Credit claims, including reporting changes in circumstances, supporting tenants with Mandatory Reconsiderations & Appeals.

The tutor will demonstrate how DWP’s approach to Overpayments and Recovery is much more punitive than Council Housing Benefit approach. But there are things that you can do to both assist your tenants or your organisation challenge attempts at recovery and seek suppression of recovery pending any appeal action.

Bill Irvine, UC Advice & Advocacy

Bill spent 30 years in local government, holding senior positions in Social Work, Housing & Finance. He left as Head of Housing Services (Benefits, Revenues & Advice) at one of the UK’s largest councils. In 2008 he set up a new consultancy business “Housing Benefit Advice & Advocacy” offering advice, training, and advocacy to Councils, RSL’s and private landlords throughout the UK.

Since January 2012 he has been at the forefront of Universal Credit training for both SRS and Private Sector landlords, on behalf of the Chartered Institute of Housing, Residential Landlords Association, individual Housing Associations and Charitable bodies, UK wide.

He now owns and operates www.universalcreditadvice.com. And publishes regular updating bulletins on Universal Credit to more than 1300 registered subscribers