I was ‘devastated’ after DWP claimed I owed £12k in Universal Credit payments – I had actually been underpaid by £2k

A “DEVASTATED” single mum has won her fight with the Department for Work and Pensions (DWP) after being told she owed £12,000.

Penny Davis was told she would have to repay the eye-watering sum after the government department said she had been paid too much in Universal Credit.

1

Universal Credit is a welfare scheme which was designed to combine several of the old “legacy benefits” into a single monthly payment.

Whether you are eligible will depend on your specific circumstances, but you can claim if you’re on a low income or out of work.

Penny, who has three children, was told she would have to pay back all the money that she apparently owed, or it would be taken from her wages.

But after launching a successful appeal, it was found that she was owed £2,000 and missed out on the government’s cost of living payments.

During the pandemic, Penny took a nine-month break from her PhD studies at Loughborough University so she could prioritise her family.

She was granted a studentship to cover the cost of tuition and living costs but this funding was paused when she stepped back from her studies.

To fill the gap, she started claiming Universal Credit while working part-time as an art and design teacher.

You can work when claiming Universal Credit because payments are designed to decrease the more you earn.

That’s because it is supposed to help prop up those who want to get back to work but might not be able to for any number of reasons.

In Spring last year, the DWP got in touch with Penny to tell her she would have to pay back all of the Universal Credit she had received, totalling £12,382.45.

She said the letter left her “devastated” and she launched an appeal against the decision.

Penny was due to be taken to court, but just days before the hearing, she received a letter stating that she hadn’t been overpaid and was instead owed £2,000 in arrears.

She said: “I’m absolutely devastated because it changed everything for me.

“I’m now in a situation where I have to work four days a week and I still haven’t finished my PhD.

“Getting that letter and thinking that I’d have to pay that back made me very fearful of ever claiming again.”

Overpayment errors – like Penny’s – can occur because PhD funding isn’t treated as income in the same way that other earnings are, according to charity Single Parents Rights.

But in Penny’s case, her funding had been paused meaning she was eligible to claim Universal Credit.

Ruth Talbot, the founder of Single Parent Rights, said that often the first time parents hear about these debts is when a letter lands on their doorstep.

She said: “People simply don’t have the money to pay these back and facing years of deductions from their benefits means families are left struggling indefinitely. 

“Many of the cases we hear about are single mums studying PhDs.

“Instead of being able to improve their families’ lives by bettering their career prospects, official errors by the DWP are pushing families into turmoil.”

She is calling for urgent change to the appeal and debt cancellation system so that households aren’t left struggling.

Ruth said: “Single parents trying to make ends meet in a cost of living crisis can’t suddenly be expected to repay thousands of pounds.

“The debt cancellation process for people who cannot afford the repayments needs to be made simple, with clear instructions on the repayment demand letters.

“It is unfair that families have to carry the financial and emotional burden.”

A DWP spokesperson said: “We carefully balance our duty to the taxpayer to recover overpayments and safeguards are in place to help people manage repayments.

“The rate of Universal Credit overpayments due to official error is currently at 0.6% – its lowest ever.”

What if I’m asked to repay money and it wasn’t my fault?

If the DWP believes you have been overpaid a benefit, it will write to you detailing what happened and how much you owe.

You can ask it to reassess your case if you don’t agree with its decision.

In your response, ask how it made its decision, as well as for a “mandatory reconsideration”.

You should then get another letter with the outcome of the reconsideration.

If you still don’t agree, you can appeal the decision at a tribunal.

You can also make a complaint about the customer service you receive from the department.

Say you’re making a formal complaint and ask to initiate its complaints procedure, either in writing or over the phone.

A complaint resolution manager should look at your case and issue a final response.

It’s a good idea to keep hold of any correspondence when you make a benefit claim in case you have any issues down the track.

For example, if there is an error and you spot it, make sure to raise it with the relevant department and keep a record of this correspondence.

Do you have a money problem that needs sorting? Get in touch by emailing [email protected].

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories.

This post first appeared on thesun.co.uk