The Department for Work and Pensions (DWP) has confirmed when you do not need to give back an overpayment. The benefit and pensions department has confirmed that it has no legal right to reclaim overpaid state pension payments when someone dies. However, it does so to "protect public funds." According to official data, the DWP has mistakenly paid more than £500million in state pensions and pension credits to people who have died over the last five years. Overall, it has managed to recoup around half of this from bereaved relatives.
Often, the payments happen after a delay in reporting the death or if there is a delay in processing by the DWP. As a result, part of that payment may cover a period after the person has died. In England and Wales, when someone dies, their death must be registered within five days unless the death is reported to a coroner, or within eight days in Scotland. In most cases, the Government should be informed, which is usually done through its "Tell Us Once" service, run by the DWP. The various government departments can also be contacted individually.
When overpayments occur, the DWP writes to individuals to request repayments. However, former Pensions Minister Sir Steve Webb - who is now a partner at pensions consultancy LCP - says the department does not make it clear in these letters that the repayments are voluntary after using a Freedom of Information (FOI) request to get one. The former minister said he was "shocked" to discover this and argues that it turns pension repayments into a "lottery" where some people send the money back while others don't.
He added that the system disproportionately affects the most vulnerable, who may be grieving and unable to question the letter, and he called for a "consistent approach" from the department. Either to secure a legal basis for recovering overpayments or stop benefiting from "people who don't know how this system works". Over the last year, the DWP overpaid £ 144million in state pension payments due to delayed death reporting. At the same time, it recovered £ 67.3million of it, leaving £ 76.7million in unrecovered overpayments.
A DWP spokesperson said: "It is not our intention to cause distress, however, we have a responsibility to taxpayers to recover overpayments. We acknowledge this is not always possible. Whilst there is no legal obligation to repay a debt of this type, we recognise some people will be willing to repay money to which there was no entitlement. We provide full contact details and encourage anyone with concerns to call us.".
