New Style ESA overpayment from over 18 months ago.

CFELH

My partner had a period of illness in early 2024 and claimed new style ESA for 5 months. They returned to work in late March and notified the DWP. The DWP replied and confirmed the ESA payments would cease the day before they returned to work (copies of all letters sent and received from the DWP including RD slips have been kept).

 

Fast forward to December 2025 and they received a letter from the DWP saying they had been overpaid (amounts to a few weeks). Nothing struck us at the time as we didn’t really understand the system and assumed it was a few weeks back pay.

 

Can this be challenged, or is this case that the DWP can recover even if it’s their error?

huckster

Yes overpayments even if due to DWP error are repayable under New Style ESA

CFELH

huckster said:

Yes overpayments even if due to DWP error are repayable under New Style ESA

Okay, worth checking as there appears to be differing views by advisors.

singhini

CFELH said:

My partner had a period of illness in early 2024 and claimed new style ESA for 5 months. They returned to work in late March and notified the DWP. The DWP replied and confirmed the ESA payments would cease the day before they returned to work (copies of all letters sent and received from the DWP including RD slips have been kept).

 

Fast forward to December 2025 and they received a letter from the DWP saying they had been overpaid (amounts to a few weeks). Nothing struck us at the time as we didn’t really understand the system and assumed it was a few weeks back pay.

 

Can this be challenged, or is this case that the DWP can recover even if it’s their error?

I would at least try to challenge it — there’s nothing to lose and potentially everything to gain.

Please note: I am not legally qualified, and I have never claimed ESA myself (i have claimed JSA and i have challenged various decisions DWP have made in the past with regards to my personal claims)

Therefore the below is just my opinion and what i would do  ----->  you are free to completely ignore it (others may well say you SHOULD  IGNORE  IT)

What’s important is to understand the legislation and framework that the DWP follows:

The rules that allow them to recover overpayments

The rules that allow them not to recover overpayments

In your case [and in my humble opinion] the key references i would look at are:

Social Security Administration Act 1992

Social Security (Overpayments and Recovery) Regulations 2013

DWP Benefit Overpayment Recovery Guide

In my opinion:

No misrepresentation, or failure to disclose a material fact from you so you have done nothing wrong IMHO

The change (return to work) was reported, and DWP acknowledged and confirmed the correct end date. Then payments continuing (if they did) would be entirely due to DWP error. 

The DWP explicitly told you payments would stop, and you did everything correctly. 

You can write a "Mandatory Reconsideration" letter which must be sent to them within 1 month of their letter to you (their overpayment letter you received in Dec)

Something perhaps like this:


----------------------------------------------------------------------------------------

To:

Mandatory Reconsideration Department

Department for Work and Pensions

From:

[Your Partner’s Full Name]

[National Insurance Number]

[Address]

Date: [Insert date]

Subject: Request for Mandatory Reconsideration – ESA Overpayment

Dear Sir/Madam,

I am writing to formally request a Mandatory Reconsideration of the ESA overpayment decision dated [insert DWP letter date], reference number [insert reference number], which states that I have been overpaid ESA for a few weeks.

I dispute this decision on the grounds that the alleged overpayment was caused solely by official error on the part of the Department for Work and Pensions and that I could not reasonably have known that the payments were incorrect.

Background

(1) I claimed new-style ESA for a period in early 2024.

(2) I returned to work in late March 2024 and notified the DWP immediately.

(3) The DWP confirmed in writing that my ESA payments would cease the day before I returned to work.

(4) I have retained copies of all correspondence, including letters from the DWP and RD slips confirming receipt.

Reason for Dispute

The alleged overpayment could only have occurred due to official error, as I reported my return to work promptly and relied on written confirmation from the DWP regarding the cessation of ESA payments. I took all reasonable steps to ensure compliance with ESA reporting requirements.

Under the DWP Benefit Overpayment Recovery Guide (paragraphs 1.25–1.26), official error overpayments of new-style ESA are not recoverable under social security legislation. Furthermore, the UK Supreme Court in Child Poverty Action Group v Secretary of State for Work and Pensions [2010] UKSC 54 confirmed that statutory powers to recover benefit overpayments do not apply where the overpayment arises solely from official error and the claimant could not reasonably have known.

Therefore, the alleged overpayment should be written off and the recovery action withdrawn.

Evidence Included

(1) Copies of the notification to the DWP regarding my return to work

(2) DWP letter confirming ESA cessation

(3) Proof of posting / RD slips

If you disagree with this request, please provide a full written explanation, setting out the legal basis for your decision and how the evidence I have provided has been considered. If your decision is not changed, I will consider taking the matter to the Tribunal Service for an independent review, and if appropriate, raise the matter further with senior DWP officials or the Secretary of State.

Please confirm receipt of this Mandatory Reconsideration request and advise me of the next steps.

Yours faithfully,

[Your Partner’s Signature]

[Your Partner’s Name]

----------------------------------------------------------------------------------------------


Summary of the legislation here (if you want to read more)

1. Social Security Administration Act 1992

The main statutory basis for DWP’s power to recover overpayments of ESA (including new‑style ESA) is section 71ZB of the Social Security Administration Act 1992. This section gives the Secretary of State the power to recover amounts of ESA, JSA or Universal Credit paid in excess of entitlement. Social Security Administration Act 1992

However, this section does not itself set a specific test about official error — it simply allows recovery of overpaid benefit. Legal and policy interpretation about what counts as recoverable overpayment and official error comes from statutory instruments and published DWP guides.

2. Social Security (Overpayments and Recovery) Regulations (2013)

The SS (Overpayments & Recovery) Regulations 2013 implement much of the detail about how overpayments are treated and recovered. These regulations work together with the Social Security Administration Act to define when and how overpayments can be recovered. The Social Security (Overpayments and Recovery) Regulations 2013

3. DWP Benefit Overpayment Recovery Guide (Departmental guidance)

While not itself legislation, the DWP’s own Benefit Overpayment Recovery Guide explains how the statutory rules are applied in practice. That guide includes the key point that:

Overpayments arising solely from official error — where the claimant could not reasonably have known they were being overpaid — are generally not recoverable under social security legislation. Benefit overpayment recovery guide - GOV.UK

2010 Supreme Court decision in Child Poverty Action Group v Secretary of State for Work and Pensions that official‑error overpayments aren’t recoverable at common law because recovery powers must come from statute  Child Poverty Action Group (Respondent) v Secretary of State for Work and Pensions (Appellant) - UK Supreme Court

------------------------------------------------------------------------

Please note: that towards the end of the example letter i mention "Tribunal Service for an independent review" and "the Secretary of State"  ----->  you have a right to escalate your case if they insist that you must pay the money back ----> i personally have never escalated any of my Mandatory Reconsideration letters. 

huckster

What about this part of the overpayments guide.

1.29. For Universal Credit and New Style JSA and ESA claims, any overprovision, including Official Error overpayments, can be recovered under Social Security Legislation.

itsthelittlethings

singhini said:

CFELH said:

My partner had a period of illness in early 2024 and claimed new style ESA for 5 months. They returned to work in late March and notified the DWP. The DWP replied and confirmed the ESA payments would cease the day before they returned to work (copies of all letters sent and received from the DWP including RD slips have been kept).

 

Fast forward to December 2025 and they received a letter from the DWP saying they had been overpaid (amounts to a few weeks). Nothing struck us at the time as we didn’t really understand the system and assumed it was a few weeks back pay.

 

Can this be challenged, or is this case that the DWP can recover even if it’s their error?

I would at least try to challenge it — there’s nothing to lose and potentially everything to gain.

Please note: I am not legally qualified, and I have never claimed ESA myself (i have claimed JSA and i have challenged various decisions DWP have made in the past with regards to my personal claims)

Therefore the below is just my opinion and what i would do  ----->  you are free to completely ignore it (others may well say you SHOULD  IGNORE  IT)

What’s important is to understand the legislation and framework that the DWP follows:

The rules that allow them to recover overpayments

The rules that allow them not to recover overpayments

In your case [and in my humble opinion] the key references i would look at are:

Social Security Administration Act 1992

Social Security (Overpayments and Recovery) Regulations 2013

DWP Benefit Overpayment Recovery Guide

In my opinion:

No misrepresentation, or failure to disclose a material fact from you so you have done nothing wrong IMHO

The change (return to work) was reported, and DWP acknowledged and confirmed the correct end date. Then payments continuing (if they did) would be entirely due to DWP error. 

The DWP explicitly told you payments would stop, and you did everything correctly. 

You can write a "Mandatory Reconsideration" letter which must be sent to them within 1 month of their letter to you (their overpayment letter you received in Dec)

Something perhaps like this:


----------------------------------------------------------------------------------------

To:

Mandatory Reconsideration Department

Department for Work and Pensions

From:

[Your Partner’s Full Name]

[National Insurance Number]

[Address]

Date: [Insert date]

Subject: Request for Mandatory Reconsideration – ESA Overpayment

Dear Sir/Madam,

I am writing to formally request a Mandatory Reconsideration of the ESA overpayment decision dated [insert DWP letter date], reference number [insert reference number], which states that I have been overpaid ESA for a few weeks.

I dispute this decision on the grounds that the alleged overpayment was caused solely by official error on the part of the Department for Work and Pensions and that I could not reasonably have known that the payments were incorrect.

Background

(1) I claimed new-style ESA for a period in early 2024.

(2) I returned to work in late March 2024 and notified the DWP immediately.

(3) The DWP confirmed in writing that my ESA payments would cease the day before I returned to work.

(4) I have retained copies of all correspondence, including letters from the DWP and RD slips confirming receipt.

Reason for Dispute

The alleged overpayment could only have occurred due to official error, as I reported my return to work promptly and relied on written confirmation from the DWP regarding the cessation of ESA payments. I took all reasonable steps to ensure compliance with ESA reporting requirements.

Under the DWP Benefit Overpayment Recovery Guide (paragraphs 1.25–1.26), official error overpayments of new-style ESA are not recoverable under social security legislation. Furthermore, the UK Supreme Court in Child Poverty Action Group v Secretary of State for Work and Pensions [2010] UKSC 54 confirmed that statutory powers to recover benefit overpayments do not apply where the overpayment arises solely from official error and the claimant could not reasonably have known.

Therefore, the alleged overpayment should be written off and the recovery action withdrawn.

Evidence Included

(1) Copies of the notification to the DWP regarding my return to work

(2) DWP letter confirming ESA cessation

(3) Proof of posting / RD slips

If you disagree with this request, please provide a full written explanation, setting out the legal basis for your decision and how the evidence I have provided has been considered. If your decision is not changed, I will consider taking the matter to the Tribunal Service for an independent review, and if appropriate, raise the matter further with senior DWP officials or the Secretary of State.

Please confirm receipt of this Mandatory Reconsideration request and advise me of the next steps.

Yours faithfully,

[Your Partner’s Signature]

[Your Partner’s Name]

----------------------------------------------------------------------------------------------


Summary of the legislation here (if you want to read more)

1. Social Security Administration Act 1992

The main statutory basis for DWP’s power to recover overpayments of ESA (including new‑style ESA) is section 71ZB of the Social Security Administration Act 1992. This section gives the Secretary of State the power to recover amounts of ESA, JSA or Universal Credit paid in excess of entitlement. Social Security Administration Act 1992

However, this section does not itself set a specific test about official error — it simply allows recovery of overpaid benefit. Legal and policy interpretation about what counts as recoverable overpayment and official error comes from statutory instruments and published DWP guides.

2. Social Security (Overpayments and Recovery) Regulations (2013)

The SS (Overpayments & Recovery) Regulations 2013 implement much of the detail about how overpayments are treated and recovered. These regulations work together with the Social Security Administration Act to define when and how overpayments can be recovered. The Social Security (Overpayments and Recovery) Regulations 2013

3. DWP Benefit Overpayment Recovery Guide (Departmental guidance)

While not itself legislation, the DWP’s own Benefit Overpayment Recovery Guide explains how the statutory rules are applied in practice. That guide includes the key point that:

Overpayments arising solely from official error — where the claimant could not reasonably have known they were being overpaid — are generally not recoverable under social security legislation. Benefit overpayment recovery guide - GOV.UK

2010 Supreme Court decision in Child Poverty Action Group v Secretary of State for Work and Pensions that official‑error overpayments aren’t recoverable at common law because recovery powers must come from statute  Child Poverty Action Group (Respondent) v Secretary of State for Work and Pensions (Appellant) - UK Supreme Court

------------------------------------------------------------------------

Please note: that towards the end of the example letter i mention "Tribunal Service for an independent review" and "the Secretary of State"  ----->  you have a right to escalate your case if they insist that you must pay the money back ----> i personally have never escalated any of my Mandatory Reconsideration letters. 

Not sure if that letter was written by AI but one of the links quoted in support said that all overpayments from ESA are recoverable.

huckster

That is the danger of using AI. It just picks up information and is often not quite right.

TELLIT01

It used to be the case that 'Official Error' could not be recovered.  That changed quite a few years ago, presumably because DWP was losing so much money due to their own mistakes.  All overpayments can now be recovered.

CFELH

Whilst I'm grateful for all and any advice. Turn2us have an excellent guide on 'Official Error' overpayments.

I'm assuming once the overpayment has been paid back, the DWP will provide a revised statement of payments so a tax refund can be claimed from HMRC for that tax year?

singhini

@huckster
"1.29. For Universal Credit and New Style JSA and ESA claims, any overprovision, including Official Error overpayments, can be recovered under Social Security Legislation"

@itsthelittlethings
"one of the links quoted in support said that all overpayments from ESA are recoverable"

You are both right....... Ive made the mistake that under "legacy benefits" they were not recoverable but under "new-style" they are. -----> So they DO have the legal power.  -----> which is what i think  @TELLIT01 refers to. 

However whether recovery is appropriate, fair, or reasonable still stands IMHO because DWP must still consider:

Whether the claimant could reasonably have known they were being overpaid. Whether the claimant acted promptly and correctly. Whether recovery would be unfair or unreasonable.

The DWP’s own guidance still says recovery should not normally be pursued where:

The claimant reported the change immediately, and

Relied on written confirmation from the DWP

Therefore I would modify the letter by taking out "official error overpayments of new-style ESA are not recoverable under social security legislation” and replacing it with
"While I understand that the Department has a discretionary power to recover overpayments of new-style ESA, including those arising from official error, DWP guidance makes clear that recovery should not normally be pursued where the overpayment arose solely due to official error and the claimant could not reasonably have known that the payments were incorrect.

In this case, I notified the Department immediately of my return to work and relied on written confirmation that my ESA would end before I resumed employment. I therefore could not reasonably have known that any further payments were incorrect, and it would be unreasonable to pursue recovery in these circumstances".

I’d also add another sentence to the letter mentioning the tax implications the OP referred to. Something like
"It is unclear why I should be required to navigate a complex tax system with HMRC to sort this mess out as recovery of the overpayment would create unnecessary and avoidable tax complications, especially when the overpayment arose entirely from DWP's own errors".


IMHO for the sake of writing a letter [the OP] has nothing to lose and potentially everything to gain. -----> however i fully accept OP is referring to guidance from Turn2Us

In the words of Wolfie Smith............... "POWER  TO  THE  PEOPLE!"  

singhini

On a separate note, what happened to the first reply on this thread ----> the one that said something like "if it was an underpayment you [the OP] would expect to get the money ...... so why not DWP"

That’s why I posted what I did. It’s not about whether the OP should or shouldn’t, it’s about the best way to deal with this situation. After all, this is a money saving site.