DWP Penalty Policy for Benefit Overpayment

This section explains the Department for Work and Pensions (DWP) fixed rate penalty policy for benefit overpayments and how it occurs as a result of claimant error.

Some of the common benefits that the DWP penalty policy applies to under the legislation for being overpaid, include:

DWP Penalties for Benefit Overpayments

The DWP introduced a £50 civil penalty in October of 2012 to help them address claimant error and fraud. In most cases, it involves cases of a benefit overpayment resulting from negligence on behalf of the claimant.

Furthermore, they can also impose a £50 civil penalty in cases where an individual fails to notify a change of circumstances (without a valid reason for not doing so).

Hence, failing to provide accurate information as part of your benefit claim is a serious matter, especially if you fail to take reasonable steps to correct the error.

The DWP would add the fine to the total amount of the overpayment – and recover it by the same method. But, they can only attach one civil penalty to each over-payment.

When DWP Apply a £50 Civil Penalty?

As a general rule, the Department for Work and Pensions would not apply a civil penalty to any overpayment of benefits, unless:

DWP Penalty Policy for Benefit Overpayment.
  • It occurred since the 1st of October 2012.
  • The amount was at least £65.01.
  • They consider the payment as being ‘recoverable’.

As a result, the individual who received the benefit overpayment must have caused it, by:

  • Supplying the department with an incorrect statement.
  • Displaying ‘negligence’ in giving incorrect information.
  • Not taking any ‘reasonable measures’ to correct the mistake.

How to Challenge a DWP Civil Penalty

There is a way to challenge a DWP decision to give you a civil penalty. So, what should you do if you agree you’ve been overpaid, but dispute the adding of fine?

The first step is to request a mandatory reconsideration about the actual decision (within one month of the decision). You would need to provide an explanation of why you believe you should not have received a civil penalty.

The DWP may change their decision – or they may not! So, the next step would be to make an appeal to an Independent Tribunal.

It is important to register the appeal within one month of the date of the decision given to you by the Department for Work and Pensions.

Note: They cannot impose a civil penalty where individuals have already been charged with an offence or cautioned, or accepted an administrative penalty, in respect of the benefit overpayment.

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