More than £700,000 reclaimed from East Devon’s poorest residents
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More than £700,000 of overpaid housing benefits has been reclaimed from residents from East Devon in just seven months.
Charities shave said the move, made by East Devon District Council (EDDC), could push the district’s poorest residents dangerously into debt.
The Department for Work and Pensions data shows the amount of money recovered by the EDDC which was accidentally paid to people who were not entitled to benefits or who were paid more benefit than they should. Cases of fraud are excluded.
The latest figures show that, in the nine months - from January 2018 to September 2018, housing benefit claimants had to pay back £735,000 to EDDC.
The bulk of the money reclaimed, £570,000, was to housing associations or private tenants. A further £165,000 was repaid from rent reductions for council tenants.
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EDDC also wrote off £77,000 of housing benefit overpayments and in September 2018, the council still had £2million of housing benefit overpayments outstanding.
Across Great Britain, £588million was overpaid during the period, a 15 per cent drop compared with two years earlier.
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During that nine month period, local authorities recovered £506million of housing benefit overpayments, while £74million was written off. A total of £2.1billion remained outstanding across the country in September.
Turn2Us, which helps people in financial hardship, warned that recovering funds paid in error could have a ‘snowball effect’, putting people at risk of serious poverty and impacting their mental health.
Matthew Geer, campaigns manager at Turn2Us said: “A benefit overpayment can happen for many reasons. It’s often something as simple as a DWP error or a small unreported change in circumstances.
“However, we are seeing that overpayments can have a real snowball effect on some claimants which often results in people falling into more severe debt and being harassed by bailiffs.
“The impact this can have one someone’s well-being is often overlooked and we speak to people every week struggling with their mental health as a result.”
Housing charity Shelter said the rates at which ‘housing benefit overpayments are clawed back can be incredibly high’, which could push people into debt and homelessness.
An EDDC spokesman said: “Housing Benefit is a means tested benefit for households on a low income to help them pay their rent. If changes in circumstances are not promptly notified, overpayments can occur. Of the £735,000 raised in the nine months up to September 2018, just 0.3 per cent was local authority error.
“Debts can be written off for a variety of reasons, this could be because a local authority error had occurred resulting in an overpayment, which a claimant could not reasonably have been expected to be aware of. Other reasons could be due to the death of a claimant or when a claimant enters into a debt relief order or IVA.
“Recovery of overpaid benefit is initiated in line with national recovery rates, however for anyone not able to afford the amount proposed, they do have the option to complete an income and expenditure form so an alternative amount can be agreed. We fully understand owing money can be stressful, so we work with our residents to negotiate manageable repayment plans, minimising hardship.”
EDDC will soon be introducing a new online reporting tool to help claimants report changes more promptly.
They added: “The majority of overpayments are due to either non-reported or late reported changes, we believe this positive step will encourage claimants to be more responsible for maintaining their claim and reporting changes as and when they occur.”