Do I have to declare compensation if claiming HB?

I have been recieving HB and in Jan of this year I received just over £7,000 in compensation. I looked on the direct.gov website and it said people were entitled to HB up to savings of £16,000. DWP are now saying that they want around £2,000 off me for not declaring this and also for not declaring some dormant bank accounts i have but have not used in years! I cannot find anything about declaring one off compensation payments.

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