DWP Debt Management Frequently Asked Questions

Are you puzzled by a letter from a debt collector? Do you have questions about DWP Debt Management?

The good news is that you’re in the right place. Every month, over 170,000 people visit our website for help with debt problems. 

In this article, we’ll help you understand:

•  Who DWP Debt Management is, and what they do.
•  How to respond if you receive a letter from them.
•  What to do if you can’t afford to pay the debt.
•  How to know if a debt can be written off or not.
•  Your rights when dealing with DWP and other debt collectors.

Some of our team have been there too, so we know it can be scary dealing with debt collectors. But don’t worry, we’re here to help.

Let’s explore your questions about DWP Debt Management together.

What should I do if I get a DWP Debt Management letter?

Handling DWP letters can feel scary, but it’s important that you do it properly!

The first thing to do is not to panic. Although it can be unpleasant, you’ll need to remain calm and organised to deal with the situation. Don’t ignore the letter. Instead, check all of the details to see whether the information is correct.

You’ll need to contact the DWP whether you think you owe the money or not. If you ignore their letters, they’ll keep trying to get hold of you to recover the money. By speaking with them, you can organise clearing the debt and getting back onto an even keel.

What should I do about DWP debt collection?

When dealing with DWP debt collection letters, it’s important that you are organised and know where you stand from a legal point of view. Dealing with them can be challenging, even though they have several rules and regulations in place to make the process easier.

The first thing to do is understand what they’re telling you. It could be that they’ve overpaid your benefit and need to reclaim it. Alternatively, you could a Social Fund loan that you’ve not repaid in full. In either case, you need to gather as much paperwork as you can that’s related to the matter. So, check for letters they’ve sent you and bank statements from the relevant period.

You’ll have to confirm your identity when you phone them and answer security questions too. If there’s been a change in your personal circumstances, you’ll need to let them know, as this could affect your repayment.

What if I can’t pay my debt?

It can certainly be surprising if you receive a letter from DWP Debt Management saying you owe a certain amount. If you’re not planning for it, it can be hard to find the lump sum to repay what you owe. If you find you can’t repay it, make sure you don’t ignore it. It won’t go away, and they won’t stop contacting you about it.

Unlike many debt collection agencies, the DWP has to be more flexible and accommodating when it comes to repayment options and penalties. This generally means that there are more repayment options for DWP debt. Per their benefit overpayment recovery guide, they can’t cause undue hardship to people who owe money.

If you can’t repay the lump sum and are still in receipt of benefit, they will automatically deduct the money from that. However, they have to ensure you still have enough to live on, so repayments are often as little as £11.10 per week.

If you’re not in receipt of benefit, they will arrange a repayment plan with. This is usually affordable monthly payments. In some rare cases, if you can’t pay, they may arrange a temporary suspension of recovery. In exceptional cases, they may write-off the debt.

What rights do I have when dealing with Debt Collectors?

As they’re a branch of the government, the Department of Work and Pensions Debt Management is held to a high standard. As such, you’re guaranteed certain rights when dealing with them. They have to follow a Customer Charter when dealing with all customers.

This charter is based around four key principles, ensuring you get the right treatment, the right result, in a timely manner, and with easy access. There are several parts to these principles, and some of the important ones are:

• They treat you fairly and with respect. This applies to all customers equally.
• They will protect your personal information, and make sure the information they give you is accurate.
• Provide a high standard of service, and one that you can clearly understand.
• They have to explain why you were paid too much money, whether you have to pay it back, and if so, why. Additionally, they will also put things right if they go wrong.
• They also have specific service standards, meaning you are entitled to a timely response to your query. Anyone you deal with has to be transparent and accommodate any access requirements you have.

How long can they chase debt?

This question is one that’s often asked, and the exact details around it can appear confusing. In reality, the answer has several aspects to it.

In the UK, a piece of legislation called the Limitation Act 1980 outlined how debts can be recovered. Essentially, for unsecured debts, the creditor has six years since the last payment or contact to recover the debt. After this time, the debt is statute-barred, meaning they can’t take you to court to recover it.

With DWP debt, the rules are different. This usually means that any DWP debt can be chased pretty much indefinitely, even after it would have otherwise become statute-barred. This can make it difficult to get any answers or argue your defence!

This person will benefit from speaking to a debt charity. They will be able to suggest the next steps and provide any legal advice that they need.

Can my debt be statute-barred?

We covered this point in another question, but it bears repeating. After six years without contact or payment regarding the DWP debt, the amount can be statute-barred. This means that the courts can’t take action against you for the money. However, the debt isn’t written off. DWP can still take money from your benefit payments to recover the debt.

What if I think my DWP overpayment decision is wrong?

If you receive contact saying you’ve been overpaid benefits and now need to repay it, you may want to dispute their claim. DWP should provide the reasons why you’ve overpaid. However, if they don’t provide full written details, you can ask for them.

You should also contact DWP to ask them to explain the matter fully on the phone. If you have evidence that contradicts their decisions (showing you haven’t been overpaid), you should inform them of this. They may overturn their decision based on this information.

If you’re unsure whether you’ve overpaid or not, you can contact Citizens Advice. They can help determine whether you’ve been paid too much and now owe DWP money. Alternatively, they can help you with appealing DWP decisions.

» TAKE ACTION NOW: Fill out the short debt form

What deductions can they take from my Universal Credit?

If you have DWP debt, they may take deductions from your Universal Credit payment. This money comes out of your UC before it’s paid to you. In some cases, they’ll also change your Tax Code so that you pay back more of the debt.

Usually, the most that can be taken from your Universal Credit payment is 25% of your Standard Allowance. This is your basic entitlement before your personal circumstances are taken into account.

Keep in mind that you can pay more than 25% if you have a ‘last resort deduction.’ These are deductions that help you in dire circumstances – for example, you needed the payment to prevent eviction or having your utilities cut off.

How will DWP handle my situation?

There are several ways that the DWP will contact you about your situation. Again, in these instances, they have certain service level commitments:

• Writing to you. They will write to you in English unless you ask to be contacted in Welsh. They will use clear language that’s easy to understand, as well as helpful and accurate.
• Phoning you. In some instances, they will call rather than write to you. If they do, they will clearly explain who they are and why they’re calling. They will ask you to confirm your details. If you ask them to call you back, they will agree upon a more convenient time.
• Visiting you. Very occasionally, they will need to visit your home. If this is the case, they’ll give you a clear date and time, and tell you any documents you’ll need to have. They will identify themselves when they arrive, with their name and ID card.

If you have any specific needs when dealing with DWP, you can let them know. They will do what they can to accommodate your requests.

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What if I’m not happy with the service?

The Debt Management Department of the DWP has a complaints procedure. So, if you’re not happy with their service, you can let them know. First, you can contact them on the phone to discuss the matter. If the original advisor can’t resolve the problem, they’ll escalate it to a Team Leader.

If, after you’ve spoken to the Team Leader, you’re still not happy, you will be referred to a customer service specialist. This then means that it’s a formal complaint, and it will be reviewed by the Independent Case Examiner (ICE). They provide an impartial mediation service.

Keep in mind that the DWP complaints process can take a bit longer than a credit company!

Other Debt Collectors 

You should check for more outstanding debts that you may have with other companies or debt collectors. Here are four steps you could take: 

1. Check your credit report for other defaults 
2. Check your email and post for reminders or overdue notices
3. Check the court records for CCJs against you
4. Check your bank statements for the names of other debt collectors 

There are hundreds of debt collectors in the UK and each works with different companies to collect debts.

For example, Cabot Financial have been known to collect for the DVLA while Lowell Financial and PRA Group buy debts from various credit card companies like Barclaycard.

If you see a name on your bank statement that you don’t recognise then you can search MoneyNerd to see if they’re a debt collector. 

DWP Debt Management Contact Details