PhD student hit with £ 17,000 bill by DWP after universal credit error | Consumer affairs
The Department for Work and Pensions (DWP) informed a doctoral student that she owed more than Â£ 17,000 in overpaid benefits due to mistakes made in assessing her application for universal credit.
Vikki Reid, around 35 and widowed with an eight-year-old child, applied for the allowance when she began her research in 2019. She provided full details of her course and the allowance she had received. been granted by the university. , and had no reason to believe anything was wrong when told she was entitled to Â£ 1,316 per month. She lives in Cornwall where rents are high, so her application included help with housing costs.
Two years later, however, she was told she had been overpaid and presented with a bill for Â£ 17,233. Her entitlement to universal credit was to be reduced by 50% per month, and the amount she was receiving was to be further reduced as the DWP began to recover the money it admits to having paid her as a result of its own mistakes.
âThe mistakes that were made were all on their side,â she says. âWe will be below the poverty line. I don’t think I can justify the stress and emotional effort of doing the PhD if it does.
Universal credit was introduced in 2013 and rolled out to replace a number of other payments, including income support and other employment-related benefits. Currently the payments include a Â£ 20 markup which is expected to end in the fall.
The standard allowance for a single person over 25 is currently Â£ 411 per month, and additional payments of up to Â£ 282 per month each are available for the first two children in a family. In addition to this, there is a housing component available to cover the cost of rent or mortgage interest. Other income and savings are factored into the claim and monthly payments can be adjusted accordingly.
Reid’s PhD working on renewable energy at the University of Exeter provides a stipend to cover the expenses of the Engineering and Physical Sciences Research Council, which, based on his hours, is worth Â£ 11,500 per year. When her claim for benefits was processed, the entire payment appeared to have been ignored.
No one noticed until last fall Reid informed the DWP that she was wasting her hours because she couldn’t get enough child care to work normally. This led to a review of her claim and a letter stating that between January and December of last year she was overpaid by just under Â£ 1,600.
At this point, she was told that 30% of her allowance should have been taken into account and that she owed several months overpayments of Â£ 145 at a time.
With the help of his father, Reid appealed. But there was worse to come. The new assessor decided that the second assessment was also incorrect. In a lengthy document explaining his decision, the evaluator said “there appears to be a misunderstanding” and that “your allowance should be treated as a grant for UC purposes”. According to the rules, this means that the full payment must be accounted for, after tuition fees and a stipend of Â£ 110 per month for books and travel.
The assessor wrote: “I acknowledge that you provided evidence regarding your student income within an appropriate time frame, but due to an administrative error your student income was not calculated and included in your UC scholarship. “
Reid isn’t the only one facing an overpayment bill. Between July 2020 and the end of June this year, advisers for the Citizens Advice charity heard from more than 3,500 people who needed help with overpayments. During the same period, there were more than 50,000 views of its website pages devoted to the subject.
Unlike previous benefits, the DWP can recover overpaid Universal Credit even if it is to blame for the error, although Treasury guidelines allow it to choose not to do so in exceptional circumstances. The clawback occurs through reductions in monthly benefits, direct deductions from an employee’s salary, or a court order.
Citizens Advice says it has seen cases of universal credit overpayments where the notification came completely out of the blue. In one case, a single parent already in debt and using food stamps was told he owed Â£ 500 but not why, and struggled to contact the DWP.
Rachel Ingleby, benefits expert at Citizens Advice, says in most cases the DWP will try to recover the money for a universal credit overpayment through a deduction. âThis means they will reduce the amount of benefits you receive each month until the debt is paid off,â she says.
âOf course, when deductions happen out of the blue, it can make it very difficult for people to manage their money. “
For Reid, who is not entitled to Widowed Parents’ Allowance because her husband did not accumulate enough National Insurance contributions before his death, the impact of the new ruling is devastating.
She believes her total monthly income will drop by 35% but, although she was told on June 9 that her rights would be urgently reviewed, she was not told what she was going to receive. âI’m still in limbo, waiting to find out what’s going to happen,â she said.
She is already struggling to find daycare as Covid has limited her options and has travel costs to face to complete her research. “I would ride a bike [to university]She said, “but it would take longer and mean more child care costs.”
âI will definitely have to quit my doctorate if my income is reduced to the basic universal credit for a person with a child. I am so devastated by this I did absolutely nothing wrong but me and my child will have to pay. We are already paying the burden of being a family of widowed parents.
After Guardian Money got in touch, DWP said it would look into Reid’s situation again.
A spokesperson said: âWe have suspended the refund activity and are reviewing this claim again. We are in contact with Ms. Reid and will advise and support her throughout this process. “
The DWP says the overwhelming majority of benefits are paid correctly and on time, and that there are official errors in less than 1% of cases.
He says seeks to recover any overpayment without creating financial hardship, and that those in difficulty can contact his debt management unit. He says if the reimbursement rate he is offering is too high, a lower rate can be discussed.
Reid says she will pursue court action to get the decision overturned, but she is relieved that her case is being reconsidered.
“I don’t think a single person with Universal Credit or the DWP is out to cause poverty and inflict misery, but politics don’t consider individuals, or treat us as people with life,” says -it. âThe system is a poverty trap, and it is now enshrined in law that people poor enough to need benefits must pay when the DWP makes a mistake, big or small. “
How does the DWP recover overpayments on benefits?
Citizens Advice can help if you’ve been hit with an overpayment bill. This is how the system works:
The DWP has the discretion to determine how and how much to recover overpayments.
Universal credit overpayments are often recovered through deductions from future universal credit payments.
The maximum amount that can be deducted is 25% of the standard universal credit allowance, the DWP says.
Citizens Advice says that, in practice, deductions tend to be taken at 30%, 25% or 15% of the standard allowance, with normally 30% the rate if a person is found guilty of an offense or has agreed. a sanction related to the overpayment.
The DWP can reduce the amount of debt it collects each month if someone experiences financial hardship as a result. Citizens Advice says it can help people with this process.