Published On: Fri, May 26th, 2023
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Universal Credit warning as thousands of claimants may have to pay back £650 payment | Personal Finance | Finance

Tens of thousands of people in the previous financial year were incorrectly paid a £650 cost of living payment, new data suggests.

More than eight million households received the £650 payment last year, which went out to people on certain means-tested benefits, including Universal Credit, Jobseekers’ Allowance, and Pension Credit.

The funds went out in two instalments, with the first payment for £326 and the second instalment for £324.

New Government figures indicate £330 million of payments went out to people who were incorrectly receiving Universal Credit at the time.

The report relates solely to the payments made by the DWP – some people on tax credits also received the payment but these were administered by HMRC.


Individuals who received these payments in error may be required to repay the funds. The report states that the estimates for the amount of overpayments were produced by “assuming that fraud and error could only occur when claimants were incorrectly receiving the qualifying benefit”.

The study also said: “In this situation, the claimant does not have entitlement to the qualifying benefit, and they are overpaid the full amount of the cost of living payments.”

The report found some £60million in overpayments were due to claimant error while some £40million were due to a DWP error.

The report states: “Overpayments relating to incorrectly paid low-income benefits accounted for around £9 in every £10 overpaid on cost of living payments, at 4.6 percent (£380million) in the financial year ending 2023.

‌”This was mostly due to 3.9 percent (£330million) of cost of living payments expenditure being overpaid to claimants incorrectly receiving Universal Credit.”

is going out this tax year to people on certain means-tested benefits, including Universal Credit and Pension Credit.

This will be paid in three instalments, with the first £301 payment sent out in recent weeks. The second £300 instalment will go out in autumn 2023 with the final £299 instalment in spring 2024.

People on disability benefits are to get a £150 payment which will go out to eligible people next month.

Pensioners who receive the Winter Fuel Payment this coming winter are also to get an additional cost of living payment of between £150 and £300.

The funds will be paid automatically to people who are eligible but as with the previous payments, if a person is paid in error they may have to repay the amount.

Britons face rising costs for everyday needs with overall inflation at 8.7 percent while food inflation is at 19.1 percent.

Energy bills went up in April when the instalments from the £400 energy bills discount finished in March.

There was some relief this week as Ofgem announced the price cap will fall meaning .

Britons are currently protected from the market price of energy by the energy price guarantee which caps average bills for a typical household at £2,500 a year.

When the Ofgem price cap is falling to £2,074 a year for a typical household from the start of July meaning many people will see their bills go down.

A person can find out what benefits they are entitled to using a benefit calculator, such as the tool available on the Turn2us website.

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