Paid Universal Credit that wasn't owed to me

System

This discussion was created from comments split from: Universal credits over payments.

hels101

Hello everyone, I’m relatively new and cannot start a new forum. Just looking for some urgent assistance really.

Apologies in advance, this is my first post and grammar etc might not be perfect/ up to standard. It’s a rather long explanation so thank you also for taking the time to read the below. I’ll firstly explain I was given some wrong advice and told to apply for universal credit by a friend, even though I’m not eligible as it could help me in the future with financial difficulties. I will hold my hands up, I was completely naive and should have sought legal advice before going down this route. Admittedly, I’ve been going through financial hardship for a very long time and I was quite desperate and not in a good place at the time of submitting the claim. (Thought I would provide some context to my incompetence).

I applied and completed the assessment towards the end of November 2025 for universal credit. I didn’t think anything of it as I knew I wouldn’t be eligible and left it there. However I was informed by a friend that it wouldn’t be any love lost if I wasn’t eligible, just that my case would be closed and nothing would come of it. As previously mentioned above, I’m happy to hold my hands up on all of my own prior faults. Below is an explanation of what’s happened. 

I was shocked to receive a first universal credit payment of £755 into my account on the 2nd of January 2026 by the DWP and a message received to my journey to attend a mandatory in person appointment. I assumed I was eligible and attended the appointment (didn’t think to question a government body who would be assessing my claim in finite detail). During the appointment I was informed by the work coach that I had to ‘redeclare my case’. It was a bit ominous and I wasn’t informed as to why. I did challenge this and completed the redeclaration during my appointment and was informed I no longer needed to attend future appointments. Again I asked why and what this meant and whether this meant that I was no longer eligible for UC. They replied very nonchalant and said oh yes, no you’re not eligible due to my employer delaying informing the HMRC that I was paid in December 2025. I accepted this explanation and walked out, didn’t think any more of it. Until I was in the car on the way home wondering If I needed to pay the money back and kicking myself for not asking the question in person. 

I called universal credit helpline and was informed that the DWP would need to recover the money even though it wasn’t my fault that it had been paid to me. It was explained to me then that it was an overpayment due to the delay in my employer informing HMRC that I had been paid. Thus resulting in the DWP assuming I was unemployed even though I had fully declared my **current and full time employment and made a log of how much I’d been paid per month since December 2024 to date (Jan 2026)

The solutions I’ve been given are: 

• First option: The payment is paid back in full to the DWP. (I cannot afford to pay this back, it will put me into more financial hardship.) I have spoken to my bank and they can provide support should the DWP attempt to take the money back in full. I do understand however that this outcome is extremely unlikely.
• Second option: I’m put on a debt management plan, which will be on my credit file for 6 years and could potentially affect me getting a mortgage.
• Third option: I pursue a legal claim in small court to make a case against the money being unrecoverable due to the overpayment being made as a fault of my employer delaying important information to the HMRC. 

To be honest, I fail to see why I should be put through hardship to pay this money back when it was not due to my own error that the overpayment was paid to me. 

I sought advice through the citizens advice bureau, and went through my assessment with them in detail to ensure I hadn’t made a mistake within my claim. They assured me that no mistakes had been made and that it was correct. They discussed with me that I did have a case to fight this with a small court. They provided me with some guidance to the following in relation to universal credit overpayments. I’ve copied and pasted from an email they sent me: The below is taken from our guidance on overpayments that had been recorded by the previous adviser: If someone other than the claimant failed to disclose a material fact and this caused an overpayment, a client can argue that it is not recoverable.  This is because a Court of Appeal decision (endnote 12) and a commissioner's decision (endnote 14) may mean the duty to disclose a material fact only applies to the claimant.  It would follow from this that overpayments caused by a claimant's failure to disclose a material fact are recoverable, but overpayments caused by someone else's failure are not. In the case the commissioner decided, an overpayment caused by the failure of an income support claimant's partner to disclose a material fact was not recoverable because the partner did not have a duty to disclose the material fact. 
They did provide a link to where the information is from -  but no one can access this as its through their advisers site. They did inform me that the local office should be able to provide support in helping me challenge the decision re the overpayment.

I’ve not been able to obtain contact with my local citizens advice office unfortunately as they are extremely busy. I am waiting on a call back. I just want to know if I can pursue this in small court and that I have a case. As I believe this is extremely unjustified that I should be liable to recover costs even though it was employers fault for delaying informing the HMRC that I had been paid. I still don’t fully understand why DWP made the overpayment based on an assumption that I hadn’t been paid even though it clearly stated on my claim that I’m currently employed, how much money I received during December 2025, and that I’m paid monthly by my employer. I’m just perplexed as to why the DWP didn’t just contact me to confirm if I had been paid?

If someone can explain this to me I’d be very grateful. 

I hope that someone can provide some reassurance and guidance as to what my next steps should be and what is a realistic course of action to take. Thank you so much in advance.

born_again

https://forums.moneysavingexpert.com/discussion/comment/81882777#Comment_81882777

Asked for this to be split to it's own thread.

Sadly, no matter who is at fault the funds will need to be repaid.

What happened to the £755?

hels101

Hi thank you.

Okay at least this answers a question whether I should even pursue.

I spent the £755 on various credit card debts I had. I split it over 3 cards. So it has all been spent unfortunately.

I’ll have to figure something out to pay the DWP.

MSE_ForumTeam5

Hi @hels101 we've split this into its own thread (anyone can start their own thread; you don't need to have been a member for a certain time)

hels101

thank you. Sorry me being stupid, how do I access the thread?

freesha

What did you spend it on? How can it be all gone? It is the public's money - you wont be able to get out of paying it back.

MissFlossy222

All overpayments to UC are recoverable no matter whose fault it was. But a repayment plan won't affect your credit score so the best thing would be to come to an arrangement with the DWP Debt Management team.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81882777#Comment_81882777

If I understand your comment correctly, you applied for UC but believed you were not eligible and that was confirmed by a "nil award".

You are employed and receive your normal salary monthly and did so in December 2025 as per usual. However, there was an admin delay so the RTI (real time information) data transfer from your employer was later than usual for that month. That meant that the (still open) UC claim saw a low income marker and paid you £775 of UC.

That means you received your December pay as usual and also received £775.

The RTI data has now been corrected and you are now required to pay back the £775 UC received. Yet, you state, that repaying the extra £775 received will put you in financial hardship.

Why do you not have the extra £775 to repay as it was extra money you never expected to receive and you had received your normal salary in the normal way in any case?

HillStreetBlues

Sadly the person you delt with CAB was usless. Income Support has different rules for overpayment, what you have quoted doesn't apply to UC making option 3 a non-starter.

Option 2 is the best, as stated above it isn't put on your credit file and you can try and arrange with debt managment a suitable figure that you can reply.

Grumpy_chap

Not all of the responses moved from the other thread:

https://forums.moneysavingexpert.com/discussion/6605460/universal-credits-over-payments#latest