Since October 2012, the Department for Work and Pensions (DWP) has had the power to impose a fine on benefit claimants who have received an overpayment due to not informing authorities of a change in circumstances.
The ‘civil penalty’ is £50 and will be added to the amount of the overpayment and will be recovered by the same method.
In order to avoid an overpayment, you should let the DWP know of any change in circumstances that may affect your benefits, including changing your name, moving house, or having a new addition to the family.
If the Government believes you deliberately did not tell them of a change in circumstances in order to receive an overpayment, you could be prosecuted for benefit fraud.
Why could you be fined £50 by the DWP?
Turn2Us, a national charity providing help for people who struggle financially, explained what could cause a £50 civil penalty.
They explained that for a civil penalty to apply, the overpayment must:
- have happened after 1 October 2012, and
- be an amount of £65.01 or more, and
- be recoverable.
The overpayment of benefit also must have been caused by a person:
- making an incorrect statement, or
- negligently giving incorrect information, and
- that person not taking ‘reasonable steps’ to correct the error.
A civil penalty will not be applied if the DWP decides to take action under benefit fraud provisions.
The charity also explained how you can challenge the £50 fine. They said: “If you agree that you have been overpaid but you don’t think you should have been given a civil penalty you can challenge the decision to give you a civil penalty.
“You will first have to request Mandatory Reconsideration of the decision. You have one month to request Mandatory Reconsideration. You should explain why you think you should not have been given a civil penalty.
“If the DWP do not change their decision, you can appeal to an Independent Tribunal. You only have one month from the date of the DWP’s decision on your request for Mandatory Reconsideration to request an appeal.”