Pension Credit Overpayment

DaveGreg

Dear MSE,

My father recently died, after which we discovered he had a large amount of money across three accounts, which we had no idea of. Following the probate process, we distributed funds as requested in his will.

We have now been sent a letter from the DWP who wish to investigate because he was in receipt of pension credit. The DWP state they intend to recoup money against the discrepancy (I believe they mean they were not told by my father about the money in the bank).

I am now very worried about what will happen next and how much the DWP will seek to recoup, especially as funds have been distributed to charities and family etc. The DWP say that as executor I am liable for the debt. They are going to send a form for us to complete.

Is there a way to work out how much we will need to find so that we can be prepared? I asked the DWP but they would not say. We are worried that a debt of this kind will now affect our credit score and if we don't have enough funds remaining, that we will risk going into debt ourselves to find the difference.

I would be grateful for any guidance or information you may be able to give.

Thank you.

sammyjammy

Impossible to say on what info you've provided.  How old was he?  How much money?  Had he been claiming PC since he got his state pension?  There will be no impact on credit score but the funds will be required to be returned to DWP one way or another.

Rubyroobs

What a mess. It does happen quite a bit though. Some older people have so much coming in with disability benefits, Pension credit etc on top of state pension and it just builds up and they forget to inform Pension credit. We see it all the time at Age Uk ! It will depend what amount of pension credit he has been receiving, how long savings have exceeded 10k etc. The first 10k is disregarded then above that they assume £1  income for each £500 above 10k  They will no doubt ask for bank statements going back some years showing all accounts. 
If he has also been claiming full council tax and / or housing benefit  based on being in receipt of Guaranteed pension credit then that may be something else you need to look at. Sorry you are going through this.

NedS

Yes, where there has been an overpayment of means-tested benefit, DWP are right to collect the overpayment from the estate.

How long ago did your Father die, when was probate granted, when did you distribute the estate as executor, and when did DWP first make you aware there were debts.

Did you place notice in The Gazette giving 2 months notice, and wait the full to months for any creditors to make themselves known?

https://www.gov.uk/probate-estate/settling-debts-and-taxes

If you have failed to do this, and distributed the assets of the estate, then as executor you will be liable for the overpayment.

You may be able to receive more specific expert advice in the Deaths, Funerals & Probate forum.

HillStreetBlues

NedS said:

Yes, where there has been an overpayment of means-tested benefit, DWP are right to collect the overpayment from the estate.

How long ago did your Father die, when was probate granted, when did you distribute the estate as executor, and when did DWP first make you aware there were debts.

Did you place notice in The Gazette giving 2 months notice, and wait the full to months for any creditors to make themselves known?

https://www.gov.uk/probate-estate/settling-debts-and-taxes

If you have failed to do this, and distributed the assets of the estate, then as executor you will be liable for the overpayment.

You may be able to receive more specific expert advice in the Deaths, Funerals & Probate forum.

Would a Gazette notice matter in this case? I'm not up on the rules but I thought a the notice was so would be creditors  know the person has died, but clearly the DWP would have been informed of the death.

NedS

HillStreetBlues said:

NedS said:

Yes, where there has been an overpayment of means-tested benefit, DWP are right to collect the overpayment from the estate.

How long ago did your Father die, when was probate granted, when did you distribute the estate as executor, and when did DWP first make you aware there were debts.

Did you place notice in The Gazette giving 2 months notice, and wait the full to months for any creditors to make themselves known?

https://www.gov.uk/probate-estate/settling-debts-and-taxes

If you have failed to do this, and distributed the assets of the estate, then as executor you will be liable for the overpayment.

You may be able to receive more specific expert advice in the Deaths, Funerals & Probate forum.

Would a Gazette notice matter in this case? I'm not up on the rules but I thought a the notice was so would be creditors  know the person has died, but clearly the DWP would have been informed of the death.

Yes DWP may be aware of the death, but how would DWP be aware of the value of the estate, which is what would alert them to a potential overpayment as probate is dealt with by HMCTS, and one should not assume UK government departments are able to talk to each other or share information.

I don't know (I'm not an expert), but the DWP are a creditor and as such presumably have the same rights as all other creditors to the estate. So if they were not given the same 2 months notice, it would be hard for the executor to argue they are not liable if they have distributed assets of the estate sooner and without giving proper notice to potential creditors?

As I suggested, I would seek more qualified opinion either from a solicitor if one was used, or from the Deaths, Funerals & Probate forum which has some very knowledgable members.

Of course all these scenarios can be completely eliminated when the new data sharing laws come into force, as DWP would have been alerted to the potential overpayments by banks data sharing, and all of these distressing situations could be easily avoided and prevented from ever happening in the first place.

Seasalt3

DWP do check probate records and if  the deceased person had at any time claimed pension credit they check whether the savings declared during that time match what is declared on probate form and if not they send a form for the executors to fill out  and tell them not to distribute the estate until they have completed their investigation.
Taking on the role of an executor is not  easy and comes with huge responsibilities .  Hope all goes well for you

Mark_A*

Good afternoon, everyone,

I also find myself in this scenario and I find the timescales involved are crazy and adding to the stress of losing a loved one. 

I lost my mother in early 2023, the solicitor that was used for dealing with probate received a letter from the DWP almost a year later stating that they were looking into my late mother’s accounts to see whether she received any benefits that she wasn’t entitled to.

I contacted the DWP a few days after this letter was received asking for more information, and I was told the DWP were checking if my mother had received pension credit that she may not have been entitled to. I informed them that I was the executer of my mother’s estate, and could they contact me in future to save additional charges that I may incur from the solicitor.

Having not heard anything for a while, I called the DWP again in 4 months later for an update and I was told that they were trying to clear a backlog, but I should hear something in the next 6-8 weeks.

After 31 weeks, The DWP have contacted the solicitor again asking for bank statements from my mother’s accounts from as far back as 2007!!! 

In the DWP letter they state that bank institutions are legally bound to hold records for 6 years but often hold accounts for 10 years. And yet we are supposed to now find statements from 18 years ago!!  Oh, and they want this information by May, less than 8 weeks from when they sent the letter!! 

I can only see this issue becoming more and more common in the future especially as when the government stopped the winter fuel allowance, they said that most people will be able to claim pension credit and urged people to claim. 

If people claim pension credit in the future and do not update their circumstances regularly, i reckon a lot more people will find that they will have to repay the DWP when a loved one passes away.