Falkirk Council owed more than £3 million in housing benefit overpayment before pandemic

Falkirk Council was owed more than £3 million in housing benefit paid to claimants in error before the coronavirus crisis brought debt collections to a halt, new figures show.

By Katie Williams
Friday, 11th September 2020, 7:30 am
Updated Friday, 11th September 2020, 9:07 am
The Council owed more than £3m in housing benefit overpayments
The Council owed more than £3m in housing benefit overpayments

Charity Turn2us, which helps people in financial hardship, warned recovery of benefit overpayments could be "the straw that breaks the camel's back" amid the pandemic, pushing those already struggling into financial turmoil.

People who are not entitled to benefits, or who are paid more benefit than they should get, are required to pay the money back to their local authority.

But Department for Work and Pensions data shows housing benefit claimants owed £3.2 million to Falkirk Council from overpayments at the start of the year. The figures exclude fraud cases.

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This debt formed part of the £2 billion sum still owed to councils across Great Britain in January, before the Covid-19 pandemic hit.

In April, the DWP announced it would pause debt collections for three months to shift staff to frontline roles, with recoveries resuming in July.

Sara Wilcox, head of external affairs at Turn2us said claimants often have no idea they have been overpaid housing benefit, and can suddenly find themselves in debt.

She said: "It risks being the straw that breaks the camel's back. It can push those who are just about managing into a financial crisis and all the mental struggles that go hand in hand."

In the year to March, Falkirk Council collected £651,000 from claimants who had been overpaid, the figures show.

But it also wrote off £431,000 during that time.

"The coronavirus pandemic has left so many people's financial resilience in tatters," Ms Wilcox continued.

"We urge the DWP to perform affordability checks before making deductions and consider another debt collection holiday to avoid pushing any more households into poverty."

A DWP spokesman said: “We have provided £9.3 billion extra welfare support to help those most in need during the pandemic, including increasing Universal Credit by up to £20 a week, as well as introducing income protection schemes, mortgage holidays and additional support for renters.

“We remain committed to helping the most vulnerable in society.”

He added claimants experiencing financial hardship can request deferral of repayments by contacting the DWP’s debt management line.