Benifit over payment

Hi, I act as a carer for someone with MS. Recently they had a letter informing them that the Income Related ESA will no longer be paid as they have to much capital. She is waiting for a letter to come telling them when they want her to attend an interview. Her MS is making life difficult for her and she suffers from depression. I realise that we should seek adice on how to deal with this issue and I am arranging this later in the week.

For now I am trying to sort out what has happened. Her mother died of cancer in late 2014 and it hit her very hard. In early 2015 she inherited £30,000.For whatever reason she failed to notify the DWP about the money, but still claimed benefits. She now accepts it was wrong and that she will have to pay back the benefits for the past three years, also it could lead to a court case.

I have spent a great deal of time trying to work out how much she will have to pay back.

Am I right that the amount of saving have no effect on DLA/PIPS. Also, would she have to pay back the tree years of DLA/PIPS payments.

I would appreciate any advice with this issue.


Hi Pip/DLA is not means tested so no pay back required there. You have to inform the DWP once you have £6000 in savings and there is then a deduction of about a pound for every £250 over the £6000. Once you reach £16000 then benefits stop until you are below that amount again. Hope that helps.


Hello Phil

That could be some considerable overpayment.

Advice from the CAB or other welfare rights advisor would be a very good idea.

You are correct that capital and/or income has no effect on DLA or PIP. So there won’t be any issue over that.

But the overpayment of Income Support is a different thing. The rules are that if you have a change in circumstance including receipt of capital or income, you are required to notify the DWP. As a result of a failure to notify the change, the DWP will classify the overpayment of benefit as having been caused by either claimant error or fraud. If however, she tried to tell the DWP at any point about the money, then it could be reclassified as ‘official’ error.

I’d be inclined to think that it would be possible to classify it as claimant error if it was a simple failure to notify. But, if she has actually completed a claim form in which she omitted to state that she had money in the bank (or what ever form the capital was in), then the DWP are more likely to classify the overpayment as fraud.

If the overpayment is caused by fraud, the DWP may well decide to prosecute, hence the potential for a court case.

If the overpayment was caused by ‘claimant error’ on the other hand, they’d be less likely to prosecute. But they would still expect her to repay the overpayment.

If however, it was caused as a result of the DWP failing to act on her notification of the inheritance (ie official error), there might even be an argument that it shouldn’t be recovered. (Fairly unlikely, but maybe worth a punt, depending on her circumstances and whether she did try to notify them about it.)

So if there’s anyway to get the classification changed to at least claimant error, that would be a first step. And the grounds for this would perhaps be as a result of a mental state, depression, grief, any other factors that could be used to argue that she made a mistake, but did not intend to effectively defraud the DWP. If the overpayment has only just come to light because she has just completed a renewal form for the first time since the inheritance then she clearly at this point didn’t intend to commit fraud, but that she just forgot to tell them and/or didn’t realise it would affect her benefit. If someone has never had any significant savings or capital, it might be possible to argue that she didn’t know it would affect her Income Support.

It’s really a question of finding out in what way the overpayment was caused, what information she’s provided to the DWP, whether she’s tried to tell them before, whether she’s made any deliberate false statements and what efforts she’s now made to put things right.

If she can get the classification changed to claimant error, she should be able to avoid a court case.

And at that point the advisor would be able to liaise with the DWP to work out how she can repay the overpayment.

But it definitely sounds like she needs a good welfare advisor looking at the entire circumstances and being in a position to write letters and/or represent her. Obviously, they will also be able to figure out the amount of the overpayment as well.

I hope this basic information helps.


1 Like

I just thought as well that the actual calculation of the overpayment will be quite difficult. Because the repayment would gradually take her below the £16,000 threshold (ie in year one, her capital would be reduced by the amount of the overpayment and year two, reduced again, eventually she’d end up with less than £16,000 so would start to qualify for IS again), it is likely to be several different calculations.


Hi Sue. thanks very much for your info. We are going to see CAB next week.

Thanks for your reply.

Hi I have been able to calculate that the over payment is about £11,000. She has not filled in any forms in the past 2 years asking about saving etc. She has an interview this coming Friday. I have suggested to her that she should seek advice, but she just wants to go to the interview and get it sorted out. She knows she will have to pay back the over payment amount and she is willing to do so. At the time of her mothers death she was and still is suffering from depression, also her MS is getting worse. I think her decision making has been badly affected by the loss of her mother and the illnesses. What I worry about is what the outcome of the interview will be. Yes she will have to pay back the over payment and may face a penalty or fine, but could she go to prison ?. Any advice would be appreciated.


I still think getting help is a better plan, but understand that she wants the issue resolved.

If she hasn’t at anytime declared that she has less than £16,000 in savings, then you could successfully argue that it’s claimant error that caused the overpayment, and not fraud.

The only way a person could be imprisoned for benefit fraud is by deliberately making false statements. This, she hasn’t done, she’s just failed to notify a change in circumstances.

But, ultimately I think willingness to repay the overpayment will go a long way towards making the interview more pleasant than she is dreading.

Hopefully it will all be OK.


I just had a thought, I do hope someone is going with her to the interview on Friday. She could do with a friend, even if it’s not a benefits advisor, just to make sure she’s not encouraged to say something that’s not actually correct. I’m not suggesting here that the DWP overpayments officers are likely to bully her, just that if they ask a question that she either doesn’t understand or is unclear about, she might end up agreeing with a statement that isn’t true.


That amount of capital will also affect any other means tested benefits she receives, so Housing Benefit and also Direct Payments (possibly). These depts, like the DWP will require notification of the situation or she will end up owing money to them.

Hi look get proof from her neuro or GP and a supporting letter that at the time she received this money her life was in a bad way etc, was she on meds for depression etc, as taking them can impair your thinking anyway. I am sure she would have been, and also cognitive issues affect thinking that is why we get PIP or DLA in the first place isnt it.

she didnt go out to commit fraud she was just not even thinking about it.

I had SAME exact amount but was on direct payments. I rang the people dealing with my direct payments and asked them if i should tell the council I had an inheritance. I was actually more or less encouraged to keep it quiet that is truth because i would soon get down the threshold of 23,250.

I was shocked actually.

I did actually contact the relevant people and my direct payment budget was stopped and I sent back the money I had left in my budget and have been paying for my care myself which is a real struggle.

However make sure she gets all the supporting evidence she can for her condition and that she had no intention of commiting fraud it was the shock of her mothers death she wasnt even thinking about it.

Is she with a care worker? If so really they should have advised her I think.

Anyway if she goes in there with her cheque book, evidence off doctors etc I think she will be fine. It will be stressful but as long as she is honest I cant see them being that hard with her.

Thanks for the replies, I am trying to convince to at least let me go with her. As for Housing Benefit, she has not been receiving that for over a year. She does not know why it was stop. It is a real mess, but I hope that it can get sorted out. One strange thing, she was told in early March that her benefits HAVE been stop. However, they are still being paid, also she had a letter last week telling her that her benefits will be increased.

OK, it might be no issue depending on the answers to a few questions. Or, it might be a problem. The questions are:

What ESA group is this lady in?

How old is she?

Does she have a full NI contribution record?

I’ll explain…if she is in the support group she can continue to claim ESA depending on her NI contribution record. Income based ESA changes to contributions based ESA upon informing the DWP of her inheritance. It’s a lesser amount of £109.65 per week. You still get careers allowance.

If she is not in the support group and does NOT have sufficient NI contributions then ESA will just cease and that will cause her problems.

i suggest checking this out AND using it as a defence at the interview. She thought she was entitled to ESA anyway because of her NI contributions. The fact is she should have told the DWP so they could have transferred her income related ESA to contributions based ESA, but she didn’t - plead ignorance.

if she is entitled to NI ESA then she will have been overpaid but it won’t be a painful amount.


It’s explained here - although it isn’t THAT clear.

Thanks Florence. She will be 64 this coming July. I tried again last night to convince her that someone should go to the interview with her, which is 11.30 this morning. But she insists that she will go alone. The best I could get her to agree to is seeking legal advice once she knows exactly what is happening. It is far from ideal, but it was all I could do. It is difficult telling someone that they are not making the right decisions. I will check out what you say about the different ESA. Many thanks for your advice.

First I need to say it was not an interview under caution. I am note sure if it went well or not, but it seems she is on contribution benefit. We now have a letter dated 6th March 2018 from the “benefits office” saying that she is on contribution based ESA. Which will be £110.75 a week. As she is on contribution based benefit am I right to assume her saving are not taking into consideration when they calculate her benefit. With have both sat down with the PC and on-line checked her bank account statements. For the year of 2015 her benefit worked out at £470 a month. For the year 2016 from January to July the benefit was £470 a month. From July 2016 to October 2017 the benefit was £261 a month. From November 2017 to the present date her benefit has been £438 a month. We realise we need to speak with someone who understands the figures. While trying to sort this problem out all I can say is that I can now understand how some people find it difficult to sort out. Thanks for the advice.

I’m very glad for her sake that it’s Contribution based ESA and not Income Based. You are right, capital is ignored for Comtributions based ESA. So any capital she has has nothing to do with the DWP. And they can’t recalculate her benefit and say she’s failed to tell them anything about capital.

So I’m sure she is relieved.

But, having someone experienced in Welfare Benefits to go through her claim and make sure all is as it should be is an excellent idea. Now that she isn’t in severe panic mode, maybe she will now talk to the CAB and get some proper detailed advice.


They still want to see bank statements for the past 3 years, which will take some time to get. But, she has agreed to see cab, so we will be in touch with them asap. It has been a real worry for her, but at least there is light at the end of the tunnel. Thanks again.

1 Like