The UK’s Department for Work and Pensions (DWP) has reportedly overpaid £500 million to deceased claimants’ accounts since 2019—yet most families never return the funds. This shocking revelation raises critical questions about DWP’s oversight, legal loopholes, and why heirs face no consequences for keeping these accidental payments.
In this investigative guide, we cover:
✔ How the DWP overpays deceased claimants
✔ Why families legally keep the money (in most cases)
✔ When you MUST repay—or risk penalties
✔ Step-by-step instructions to report a death to DWP
How Does the DWP Overpay Deceased Recipients?
The DWP relies on real-time death data from the General Register Office (GRO), but delays cause systemic failures:
Top Reasons for Overpayments
- Slow Death Reporting (Average 3-week lag)
- Banks freeze accounts only after official notification
- Auto-Payments Continue
- State pensions, PIP, and Universal Credit often pay posthumously
- No Cross-Checks
- DWP doesn’t verify life status monthly
Most Overpaid Benefits
| Benefit | Avg. Overpayment |
|---|---|
| State Pension | £2,100 |
| PIP | £1,800 |
| Universal Credit | £1,200 |
Why Don’t Families Return the Money?
1. No Legal Obligation (Usually)
- Joint accounts: Surviving spouses automatically inherit funds
- Prepaid funeral plans: Some withdraw cash before DWP notices
- Small estates: Under £5,000 often go uninvestigated
2. DWP Rarely Pursues Repayment
- Costly recovery: Chasing £500 debts may cost £600 in admin
- No penalties: Heirs face no fines if they don’t proactively report
3. “Moral Hazard” Loophole
- Families assume “DWP will adjust it later”—but often, they don’t
When MUST You Repay? (3 Red Flags)
- DWP Sends an Overpayment Notice
- You have 21 days to dispute or arrange repayment
- Estate Exceeds £10,000
- DWP claims priority over other debts
- Fraud Suspected
- Deliberately hiding a death = 2–5 year prison sentence
How to Report a Death to DWP (Step-by-Step)
Step 1: Notify Within 8 Weeks
- Call DWP Bereavement Service: 0800 731 0469
- Provide:
- Death certificate
- Deceased’s NI number
- Your relationship proof
Step 2: Return Overpaid Funds
- Voluntary repayment: Use DWP’s online portal
- Instalments allowed: As low as £5/month
Step 3: Stop Future Payments
- Cancel direct debits
- Close accounts if solely in deceased’s name
FAQs: DWP Overpayments After Death
Q1: Can DWP take back money from joint accounts?
Yes—if the deceased was the primary account holder.
Q2: What if I spent the money unknowingly?
You may negotiate a write-off if you prove financial hardship.
Q3: How far back can DWP reclaim overpayments?
Up to 6 years (Limitation Act 1980).
Q4: Do funeral expenses offset DWP debts?
No—DWP claims rank above funeral costs.
Q5: Can I inherit a state pension overpayment?
No—it’s always recoverable, even from heirs.
How to Check for Overpayments
- Review bank statements for post-death deposits
- Request a DWP statement via Form BR735
- Consult a probate solicitor for estates >£50,000
Conclusion: Protect Yourself from DWP Reclaims
While families often keep accidental payments legally, the DWP can—and does—recover funds from larger estates. Report deaths promptly, document everything, and seek advice if unsure.
Need Help?
- DWP Bereavement Line: 0800 731 0469
- Citizens Advice: www.citizensadvice.org.uk
- Probate Helpline: 0300 303 9000