Dacorum Borough Council reclaimed more than £1 million in housing benefit overpayments before pandemic

Charity Turn2us, which helps people in financial hardship, warned recovery of money paid in error could be "the straw that breaks the camel's back" amid the coronavirus pandemic, pushing those already struggling into financial turmoil.

People who are not entitled to benefits, or who are paid more benefit than they should get, are required to pay the money back to their local authority.

Department for Work and Pensions data shows in the year to March housing benefit claimants paid back £1.3 million to Dacorum Borough Council from overpayments in the year to March. The figure excludes fraud cases.

​The bulk of the money reclaimed (£668,000) was for housing association or private tenants. A further £614,000 was repaid from council tenants who had received rent reductions.

Across Great Britain, overpayments recovered during the year totalled £573 million.

Sara Wilcox, head of external affairs at Turn2us said the pandemic has left many people's financial resilience "in tatters", and the charity has seen a surge in people turning to it for help

She added: "Housing benefit overpayments can come as a real surprise to people, who often have no idea that they have been overpaid and suddenly find themselves in debt to the DWP.

"Money is usually deducted from future benefit payments, which leaves people struggling to pay rent and put food on the table."

In April, the DWP announced it would pause overpayment recovery for three months to shift staff to frontline roles as the coronavirus crisis took hold, with recoveries resuming in July.

Ms Wilcox added: "Since debt collection has resumed, it risks being the straw that breaks the camel's back. It can push those who are just about managing into a financial crisis and all the mental struggles that go hand in hand."

The DWP should consider a further debt collection holiday, and perform affordability checks before making deductions, she said.

Dacorum Borough Council wrote off £197,000 of housing benefit overpayments in 2019-20, the data shows. Nationally, the figure hit £80 million, an 11 per cent drop compared to a year earlier.

A DWP spokesman said: “We have provided £9.3 billion extra welfare support to help those most in need during the pandemic, including increasing Universal Credit by up to £20 a week, as well as introducing income protection schemes, mortgage holidays and additional support for renters.

“We remain committed to helping the most vulnerable in society.”

He added claimants experiencing financial hardship can request deferral of repayments by contacting the DWP’s debt management line.