Dealing with debt from the Department of Work and Pensions (DWP) can be daunting. Financial difficulties are never easy, but they mustn’t be overwhelming. With careful planning and knowledge of your rights, you can take control of your finances and get back on track. In this article, we’ll provide tips on negotiating payment plans with the DWP overpayments, understanding your rights when dealing with debt, and accessing free resources to help you manage it in the long run. So if you’re struggling with debt from the DWP, read on for some useful advice!

What are DWP overpayments?

DWP overpayments, also known as “social security or benefit overpayments”, occur when the Department of Work and Pensions pays a claimant more than they are entitled to. This can happen for various reasons, such as an error on the part of the DWP or the claimant’s failure to report a change in circumstances.

Dealing with DWP overpayments can be extremely stressful and overwhelming, especially if you’re on a low-income or benefits support in general. However, it’s essential to remember that you have rights and options to help you manage the situation.

When you receive notification of a DWP overpayment, one of the first things to do is check that the amount is correct. You can do this by requesting a breakdown of the overpayment to understand where the mistake was made. If the amount is wrong, you should contact the DWP immediately and explain the mistake.

If the overpayment is correct, you must take responsibility for paying back the money. You can request to pay it back in instalments or negotiate a lower payback amount if you’re struggling with finances. It is important to remain honest and transparent with the DWP and provide evidence of your financial situation.

It is also essential to know that the DWP cannot recover the overpayment without your consent, even though they may claim otherwise, and that they cannot deduct more than 25% of your income or benefits. Moreover, you have the right to ask the DWP to suspend recovery until you receive more information, which can help you to better understand the overpayment and how it was calculated.

How can I deal with debt from the DWP?

The first thing to do when you receive notification of a DWP overpayment is to check whether it is legitimate or due to an error on their part. Request a breakdown of the overpayment to understand where the mistake was made and seek advice if necessary.

If the overpayment is correct, you are responsible for repaying the money. However, you have options and rights, such as negotiating payment plans or setting up instalments, that can help make the situation more manageable. It is important, to be honest and transparent with the DWP about your financial circumstances and provide evidence where possible.

Why has the DWP sent me a letter saying I owe them money?

Generally, a letter from the DWP means that you have received too much in benefit payments or tax credits. This can be due to various reasons, such as a change in your circumstances or an error on the part of the DWP. In either case, you’ll need to repay the excess amount.

One of the main reasons for an overpayment is not informing the DWP of a change in your circumstances, such as a change of address, income, or living arrangements. Therefore, it is crucial that you regularly review your eligibility for benefits and inform the DWP of any changes as soon as possible.

If you receive a letter stating that you owe an overpayment, you should immediately check whether the amount stated is correct. You can request a breakdown of the overpayment and seek advice from citizens or an independent welfare rights organisation. Doing this as soon as possible is important unless you risk further charges.

If the overpayment is deemed correct, you must repay the amount owed. The DWP may contact you and request full payment or ask you to establish a payment plan every month. However, if the repayment would cause severe financial hardship, you can negotiate a lower repayment amount or set up a more affordable instalment plan.

It’s important to note that the DWP cannot recover the overpayment without your consent, and it is also illegal for them to cause undue hardship. As such, you should not feel pressured into paying more than you can afford. Furthermore, you can ask the DWP to postpone or suspend recovery of the overpayment until you receive further information or support.

If you don’t repay the money owed to the DWP, they may pass your debt onto one of these collection services: Advantis, BPO Collections, CCS Collect, Moorcroft Past Due Credit Resolve Call or Shakespeare Martineau.

The DWP Debt Management contact centre offers a variety of means to get in touch, including phone at 0800 916 0647, textphone at 0800 916 06451, NGT text relay for those with hearing or speech disabilities via 18001 then 0800 916 0647 and Video Relay Service for British Sign Language (BSL) users.

How can Credibble help me?

Dealing with debt can be overwhelming, especially when debt collectors or bailiffs are involved. Don’t panic! The Credibble Team is here to help. We can help you to stop proceedings and reduce the cost of your debt for free.

We offer a unique debt solution service partnered with Equifax, a world leader providing consumer credit report data. This means we can provide instant access to all your major debt without you having to search through the paperwork. Furthermore, we have gained the support of the NatWest Accelerator Programme for business and have a multiyear relationship with the organisation. We have extensive and unique knowledge of personal finances that goes far beyond debt solutions – so you can trust that you are in safe hands.

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How much money do the DWP take in debt repayments?

If you’ve received too much Universal Credit, the Department of Work and Pensions (DWP) will typically recoup money from your benefit payments or request that you directly pay them. The maximum deduction they can take is 30% of your usual allowance. Child Tax Credits or Working Tax Credits may vary between 10%-100%. Regarding overpayment of housing benefits, £11.10 per week will usually be subtracted. If you have been overpaid due to benefit fraud, your Income Support, State Pension Credit, Jobseeker’s Allowance (JSA), and Employment Support Allowance (ESA) will be reduced by £11.25 weekly. Unfortunately, if you have a conviction or caution for the same offence, these rewards can be slashed to £30 weekly.

The Department for Work and Pensions maintains that for individuals claiming new-style JSA or ESA along with Universal Credit, the maximum deduction from their total benefit is 40%. Additionally, if you live in long-term residential accommodation such as a nursing home, the deductions will not exceed £3.75 per week.

Once you stop receiving benefits, paying back the debt is easy. You can make repayments through a standing order from your bank account or by completing a Giro Credit slip and dropping it off at your local branch. Additionally, DWP Debt Management provides an online banking service for straightforward payment processing. After setting up repayment methods, watch for the letter detailing how much needs to be paid back!

Who are DWP Debt Management?

DWP Debt Management is a department within the Department of Work and Pensions (DWP) responsible for managing debt for the various benefits administered by the DWP. This includes Universal Credit, Child Tax Credits, Working Tax Credits, Housing Benefits, Jobseeker’s Allowance (JSA), Employment Support Allowance (ESA), and State Pension Credits.

Their primary role is to ensure that debts owed to the DWP are repaid fairly and reasonably, which does not cause undue hardship to the claimant. They provide advice and support to claimants on how to repay their debts, including negotiating payment plans and providing guidance on available resources.

DWP Debt Management also works closely with other departments within the DWP, such as the Fraud and Error Service, to prevent and detect fraud and overpayments. They have various tools and techniques to investigate potential fraud and take action when necessary.

The department utilises a mixture of automated and manual processes to identify overpayments and implement recovery of owed amounts. Their systems are designed to detect anomalies and flag cases where overpayments may have occurred.

Overall, DWP Debt Management plays a vital role in effective benefits administration by ensuring that debts are repaid fairly and reasonably to claimants while protecting the public purse.

9 easy steps to deal with debt from the DWP

Dealing with debt from the Department of Work and Pensions (DWP) can seem daunting. However, with some simple steps, you can regain control of your finances and set yourself on a path to financial stability. Here are 9 steps to help you manage debt from the DWP.

STEP 1: Carefully check if you were paid the proper sum

The first and most important step in dealing with debt from the DWP is to check whether you were paid the correct amount of benefits. Overpayments often result from innocent mistakes or errors and can easily be corrected.

To ensure you have been paid correctly, you should carefully check your statements and letters from the DWP. Ensure you understand the breakdown of your benefits and the amount you are entitled to receive.

STEP 2: Check if the DWP has mistakenly given you an overpayment

One of the main reasons for debt from the Department of Work and Pensions (DWP) is overpayment of benefits. This means you have been paid more than you were entitled to receive. Before dealing with the debt, it is important to see if the DWP erred in paying you too much.

There are many reasons why the DWP may have overpaid you. It could be due to a change in your circumstances that you did not report, such as a change in your income, moving to a new address, or starting or stopping employment. Alternatively, it could be due to an error on the part of the DWP, such as a miscalculation or misinterpretation of the rules.

If you believe that the debt from the DWP results from an error, you can request a mandatory reconsideration. In this process, you ask the DWP to review their decision and potentially change it if they made a mistake.

To start the mandatory reconsideration process, you must send a written request to the DWP within one month of receiving their decision letter. In this request, you must explain why you believe the decision was wrong and provide any evidence to support your claim. You should also include your name, address, and National Insurance number.

After receiving your request, the DWP will review your case and make a reconsideration decision. This decision will be communicated to you in writing. If the DWP’s decision is still not in your favour, you can appeal to the First-tier Tribunal (Social Security and Child Support) within one month of receiving the mandatory reconsideration decision.

It is important to note that requesting a mandatory reconsideration does not pause the recovery of your debt. You may still be required to make payments while your case is being reviewed. If the mandatory reconsideration does not result in a favourable decision, you can appeal to the First-tier Tribunal (Social Security and Child Support). However, appealing a decision can be a lengthy and complex process and may not always result in the outcome you desire.

STEP 3: See if you are eligible to dispute the overpayment

You might find yourself in a situation where you’re overpaid due to an oversight, such as forgetting to inform the benefits office of a partner moving into your household or getting another job. Even though it was your fault, there are rare cases when challenging an overpayment is possible – and for this reason, seeking professional guidance from Citizens Advice would be beneficial. Ask one of their advisors to help challenge the excess payments received.

STEP 4: Contact the Department of Work and Pensions to see if you can repay them in instalments

If you cannot challenge the debt owed to the DWP and do not have sufficient funds to make a full payment, contact their debt management team for assistance. Always ensure you can cover your essential needs: food, shelter, heat and repaying any outstanding debts; if necessary, request reduced payments from the DWP to stay afloat financially.

STEP 5: If you are unable to make any payments, tell the DWP

In exceptional scenarios, the DWP won’t demand repayment if you demonstrate that debt payments would impact your capacity to purchase necessities such as food and electricity. A special condition like a mental health disorder or physical illness must be presented for the DWP to consider this option.

Create a budget that considers your income and expenses, such as food and rent, so you can demonstrate to the DWP that there is no room for repayment. If they remain steadfast despite this evidence of hardship, don’t hesitate to submit a complaint via the website.

STEP 6: It’s important to remember that benefit overpayment is a priority debt

Benefit overpayments are considered a priority debt, so prioritising them over other debts, such as credit card bills, is important. The repercussions of not repaying benefit debt can be grave; you might have money deducted from your other benefits to cover the payment. Thus, make sure paying off these debts stays at the top of your list! Rather than suddenly having your hard-earned money taken away, reaching out to the DWP and setting up cost-effective payments you can afford is better. Court fines, council tax debts, child maintenance costs, and housing expenses such as rent or mortgages are priority debts – so don’t hesitate to contact us immediately!

STEP 7: Protect yourself from DWP debt collectors – Understand your rights!

It is important to know that the DWP can enforce payment of debts through debt collectors, but you have rights in this process. Debt collectors employed by the DWP cannot force entry into your home, nor can they take certain items such as clothing, bedding, or household equipment. They cannot harass or intimidate you or use abusive language or violence.

It is within your rights to request that debt collectors communicate with you only in writing or through a third party. The DWP must also provide detailed information about the debt and the action to recover it. This includes providing you with a statement of account, which shows how the debt has been calculated and any payments made.

If you feel a debt collector has violated your rights, you should report them to the DWP immediately. You can also seek advice from a debt advice agency or Citizens Advice. Additionally, debt collectors must follow the Code of Conduct set out by the Credit Services Association, which governs their behaviour.

Like all debt collectors, DWP Debt Management is regulated by the Financial Conduct Authority and must adhere to certain practices when collecting debts. Specifically, they cannot call you during unreasonable times (8 am-9 pm on working days with no weekends or holidays), contact your employer without permission from you first, nor let any of your friends or family know that there is an outstanding debt that needs to be collected.

Don’t let debt collectors use legalese or technical jargon to confuse you; don’t be fooled if they try to contact you on social media, as they generally lack legal authority in such a situation. Debt collectors may attempt to terrify you by falsely claiming that certain actions are possible when, logically speaking, it wouldn’t make sense for them to do so. Forging documents is fraud and should not be tolerated under any circumstances! If a collector attempts to pressure or threaten you into paying off the debt without regard for your well-being (physically, psychologically or verbally), take action immediately.

Check out the FCA handbook for a comprehensive list of prohibited activities conducted by debt collectors in the United Kingdom.

STEP 8: Explore your options for financial relief by considering an insolvency solution

If you’re overwhelmed by debt from the Department of Work and Pensions (DWP) and other creditors, it might be time to consider an insolvency solution. Insolvency can be a way to clear your debts and start afresh without the stress of intimidating letters, court proceedings or debt collectors hounding you for money.

The two most common forms of insolvency in the UK are bankruptcy and individual voluntary arrangements (IVAs). Both options have pros and cons, but it’s important to take professional advice on which is right for you.

Bankruptcy wipes out most of your debts but has serious consequences, including losing your assets, such as your home, and the impact on your credit score can last for years. You may also be subject to restrictions on your employment and business activities.

An IVA is a formal arrangement with your creditors to repay some or all of your debts over a set period of time, typically five years. You make one affordable monthly payment distributed to your creditors. You must stick to a budget, and your payments will be reviewed annually. At the end of the arrangement, any remaining debts are written off.

IVAs can be a good option if you have some assets you want to protect, such as your home, and if you want to avoid bankruptcy. They can also be more flexible than bankruptcy, allowing you to have more control over what happens to your assets.

One of the many advantages of an IVA is that it is a legal agreement between you and your creditors, so they cannot take any further action against you. This means that once the IVA is in place, you don’t have to deal with any more intimidating letters, phone calls or visits from debt collectors.

If you’re struggling with debt from the DWP and other creditors, an insolvency solution may be the best option. It’s important to seek professional advice from a reputable debt advice agency, such as Credibble, who can guide you through the process and help you find the best solution.

STEP 9: Use free debt advice

If you’re struggling with debt from the Department of Work and Pensions (DWP) or any other creditors, it’s crucial that you seek free debt advice as soon as possible. Many free and impartial resources can offer guidance and support to help you manage your debts effectively.

One of the best places to start is the Money Advice Service (MAS), an independent service set up by the UK government to help people manage their money. The MAS offers free debt advice online, over the phone or face-to-face. Their website provides useful information on budgeting, borrowing and debt management. They also have a debt advice locator tool to help you find a reputable debt advice agency in your local area.

Another excellent resource is StepChange, the UK’s leading debt charity. They offer free debt advice and solutions to anyone struggling with debt, including practical solutions such as debt management plans, individual voluntary arrangements (IVAs) and debt relief orders (DROs). By accessing their services, you can have peace of mind knowing you’re receiving advice from a trusted and experienced advisor.

In addition to these resources, many other charities and organisations provide free debt advice, such as Citizens Advice Bureau, National Debtline, and Christians Against Poverty. These organizations offer confidential and non-judgmental support for people experiencing financial difficulties.

It’s important to remember that debt is a common problem affecting many people at some point. Seeking free debt advice is the first step towards relieving the debt burden and taking control of your finances. By accessing the free resources available, you can learn about your options, create a plan to manage your debts and move towards a more positive financial future.

If you ignore the DWP’s communication and refuse to pay, just like a debt collector, they can take you to court. A County Court Judgement (CCJ) could be issued against your name if their lawsuit succeeds.

If you have been issued a County Court Judgement (CCJ), the Department for Work and Pensions could recoup any benefit overpayment from your bank account, wages or other assets in one of these ways:

  • If you owe money to the Department of Work and Pensions (DWP), they can apply for a Third Party Debt Order, which instructs whoever holds your finances, commonly a bank or building society, to pay it directly to them. This will result in an N349 Interim third-party debt order form notifying you that your account has been frozen for this payment to go through. This order also tells you to attend your local County Court hearing centre. In this stage, the judge will determine whether to issue a Final Third Party Debt Order. If they do, your bank or building society must transfer the amount of money frozen in your account at that time directly to the creditor’s account. Any deposits made after that moment won’t be subject to freezing and thus can still be accessed by you freely.
  • Did you know that a court-issued Attachment of Earnings Order can serve as an efficient means of debt repayment? This order requires your employer to deduct money from your salary and pay it to the court. So, rather than making regular payments or waiting for funds in the collection, this process simplifies payment – allowing you to take control of what’s owed!
  • If you don’t comply with the court-ordered debt payment to the DWP and own a home, they may obtain permission from the court to use your property as collateral. If you continue withholding payments, they will have legal grounds to repossess your house to recoup their funds.

Did the Department for Work and Pensions suspend Debt Recovery operations in 2021?

In 2021, rumours were circulating that the DWP debt recovery had been suspended. However, this information is not entirely accurate. While it is true that the government had temporarily halted debt recovery efforts due to the COVID-19 pandemic, this only lasted for a few months in 2020.

The DWP was one of the government departments that temporarily paused its debt collection activities during the UK’s first national lockdown in March 2020. This move was taken in recognition that many people were experiencing financial hardship and uncertainty due to the pandemic.

However, it’s important to note that this suspension was not permanent, and the DWP resumed its debt recovery efforts towards the latter half of 2020. If you owe money to the DWP, you should still expect to receive correspondence from them regarding your debt.

That being said, support is still available if you are struggling financially due to the pandemic. The government has implemented measures to offer financial assistance to those affected by COVID-19. This includes furlough schemes, grants, and other forms of financial aid.

Can I stop the DWP chasing me for the debt?

If you owe money to the Department of Work and Pensions (DWP), it can feel like they won’t stop chasing you until the debt is paid off. However, there are steps you can take to deal with the situation and put a stop to the constant communication.

Firstly, it’s important to understand your rights when dealing with debt collectors. The DWP must follow certain rules set out by the Office for Fair Trading (OFT) and the Financial Conduct Authority (FCA). These rules include not contacting you at unreasonable times, not pressuring you to pay more than you can afford, and not making false or misleading statements.

If you feel like the DWP is not following these rules, you can make a complaint to them directly. If the issue is unresolved, you can escalate the complaint to the Financial Ombudsman Service (FOS), an independent organisation, to resolve disputes between financial institutions and their customers.

Another way to stop the DWP from chasing you for debt is to negotiate a payment plan with them. This involves agreeing on a reasonable repayment schedule that you can afford. You can do this by contacting the DWP directly and explaining your situation. They may be willing to work with you to devise a plan that works for both parties.


Debt Relief Orders (DROs) are another way to take control of your debt situation with the DWP. A DRO is a form of insolvency designed for people with limited assets, such as those on a low income or with no dependents. It gives you breathing space from your creditors and stops them from chasing you for any money you owe.

The process involves applying to the Insolvency Service, which will assess your situation and decide whether or not you qualify for a DRO. If approved, it lasts for 12 months, and no payments are required during this time. Any eligible debts included in the DRO are written off at the end of the period.

Finally, Credibble can help you find the best debt solution. Our expert team works with you to assess your financial circumstances and provide tailored advice on the best way forward. This could include negotiating a payment plan, applying for a Debt Relief Order, or taking advantage of other debt management schemes available.

We understand that dealing with the DWP can be daunting, and we are here to support you every step of the way. Our team is highly experienced in managing debt, so you can trust us to find the best solution for your circumstances.

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