Department for Work and Pensions

3. Mr V complains about DWP’s decision to request refund of a Universal Credit (UC) Advance payment. He explains he needed the loan due to DWP’s error to migrate him to UC, before agreeing he could return to Employment and Support Allowance (ESA). This was after he made a Mandatory Reconsideration (MR) request. He states he found out about the continuing overpayment deduction in August 2022 as he had previously thought it would be cancelled when DWP agreed to migrate him back to ESA.

4. Mr V also complains about DWP’s customer service as it promised him callbacks it did not make and caused delays in responding to his complaint.

5. Mr V explains this issue has been traumatising for him, and when the original DWP error occurred, he was unwell and seeking medical support for depression, PTSD, and chronic neck and back pain. He says it is overwhelming for him to check how much he is having to pay back out of his benefits. He explains the overpayment loan is affecting his credit score. He says the delays caused by DWP have caused him anxiety, and he feels the remedy offered to him is insufficient.

6. Mr V would like a reimbursement of the overpayment that has been deducted from him and a financial remedy for his emotional distress.

7. UC Advances are paid to benefits claimants who experience gaps in their benefit payments whilst migrating from one benefit to another. UC Advances are a loan, and terms of repayment are agreed with the claimant before payment is made. Where a claimant moves from UC to another benefit, deductions normally continue from their payment until the advance has been paid off.

8. Mr V claimed two UC Advance loans in June 2019 totalling £652.82. DWP then referred Mr V to Debt Management for recovery of the advances and a deduction of £54.41 was made from his first UC payment in July 2019.

9. Mr V called DWP in November 2022 and told it he should not be repaying the UC Advances because the decision to close his ESA claim had been changed after a Mandatory Reconsideration (MR). A Mandatory Reconsideration is where a benefits claimant asks DWP to review its decision about a benefit or child maintenance agreement.

10. Mr V complained he wanted the remaining balance written off. Mr V complained again in writing in December 2022 to repeat his complaint has he had not heard back from DWP. He also told it he wanted £2,500 in compensation for the service failures.

11. Mr V made numerous calls to DWP between December 2022 and February 2023, but DWP did not call him back. A manager contacted Mr V in February 2023 apologising for the delays in responding to him. The manager provided incorrect information on the phone about Mr V’s ESA entitlement indicating he was owed £1,720.94 in ESA for the period from May - July 2019, and £692.53 of this amount had already been paid to him.

12. Mr V made nearly thirty calls to DWP requesting an update on his complaint between February and June 2023.

13. DWP contacted Mr V in June 2023 and explained the outstanding balance on the UC Advance loans needed to be repaid, and the case had been referred to DWP’s National Special Payments Team (NSPT).

14. Mr V called DWP a further twenty-eight times between June and October 2023 asking for an update on his complaint. In November 2023 the NSPT awarded Mr V a discretionary payment of £100 to recognise DWP’s poor customer service.

15. After Mr V escalated his complaint to the Independent Case Examiner (ICE), it requested DWP increase this payment by another £100 and wrote to Mr V in December 2024 to explain this. The ICE report detailed to Mr V that it was unable to uphold his complaint about the UC Advance Loan as these loans are recoverable by law and there are no processes to appeal the recoverability. It detailed that by changing Mr V back to ESA in July 2019, although it accepts this decision was incorrect, Mr V has been in receipt of ESA at a higher rate than UC, meaning he is financially better off than he would have been had DWP not made the error. It also explained that DWP paid Mr V arrears totalling £2,131.26 in 2023, despite him not being owed this money. DWP has decided not to recover the payment.

DWP’s decision to request refund of a Universal Credit (UC) Advance payment.

17. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the organisation has got something wrong. We do this by comparing what should have happened with what did happen. We have done this and have not found any indications that something has gone wrong. In this case, we have looked at whether we can evidence DWP did something wrong by requesting Mr V repay his UC Advance Loan.

18. Mr V told us he should not be liable to repay the UC Advance Loans. He explained this is because DWP made an error in migrating him to UC and then agreed after a Mandatory Reconsideration that he could return to claiming ESA. He feels for this reason that DWP caused him to need the loans, so it is unfair he should have to repay them.

19. We are very sorry to hear of the impact Mr V told us about in relation to the UC Advance Loans he is paying back to DWP. We appreciate Mr V feels very strongly about this issue and has expressed to us the emotional distress and financial hardship he has experienced as a result.

20. We are unable to consider Mr V’s concerns about DWP’s migration decisions, as we have had to close these as out of time in line with the Parliamentary Commissioner Act 1967. We already discussed the reasons for this with Mr V. We are therefore only able to consider if Mr V is still liable to pay back the UC Advance Loans in line with the relevant DWP guidance.

21. In consideration of this complaint, we have looked at DWP’s New Claim Advances Guidance (April 2025). This guidance sets out that payment of a UC Advance Loan must be made within a 24-month period. It states that postponing a payment may be possible where there are exceptional circumstances. It sets out that if circumstances push a claimant into genuine hardship a decision to postpone a payment can made for a maximum of three months. The guidance is clear that full recovery of the loan must be made within 27 months. We have used this guidance from April 2025 as this relates to an ongoing situation for Mr V. We have also cross-checked this with earlier guidance from June 2019 which states the loan will normally need to be re-paid within two years.

22. The guidance sets out one circumstance where repayment of the UC Advance Loan must be suspended. That is where the claimant becomes insolvent. As that is not applicable in Mr V’s case, and there are no other circumstances where repayments can be suspended, we cannot see that DWP has done something wrong by requesting full repayment of the UC Advance Loan.

23. We will therefore be taking no further action on this element of Mr V’s complaint. We are sorry for any distress this decision may cause to Mr V and appreciate this is not the decision he will have wanted from bringing his complaint to our office.

DWP’s customer service

24. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the events complained about had a negative effect which the organisation has not put right. Having done so we have found DWP has already done enough to put right the impact of these events for Mr V.

25. For the delays DWP caused in responding to Mr V, and failures to call him back on numerous occasions between February and October 2023, it has awarded him a £100 non-consolatory payment. ICE then increased this amount by a further £100, bringing the total of financial remedy offered to Mr V to £200.

26. DWP’s guidance ‘financial redress for maladministration: staff guide’ is what DWP should use to determine how much, if any, financial remedy to pay to put right the impact of its failings. It provides three payment categories into which an individual can fall when being awarded an ex-gratia special payment because of maladministration.

27. Mr V has been offered a category 3 consolatory payment of £200. The staff guide states a special payment may be considered under this category where the customer has suffered injustice or hardship arising from maladministration. Consolatory payments usually range between £50 and £500, although lower or higher payments may be appropriate having considered the individual circumstances of a case, in the context of the guiding principles. Under this category the guidance indicates that ‘consolatory payments usually range between £25 and £500’. This range is similar to level 2 of our Severity of Injustice scale.

28. By agreeing to pay the redress ICE recommended, we consider DWP has recognised the impact of its mistakes, and we are glad to see it has done so. We will therefore be taking no further action on this element of Mr V’s complaint.

29. We appreciate this will not be the decision Mr V was hoping for when bringing this complaint to us. We understand he has been through a difficult period and wish to emphasise that we do not seek to minimise this in making this decision. We wish Mr V all the best for the future.

1. We have carefully considered Mr V’s complaint about DWP. We are sorry to hear of Mr V’s concerns that he has been held liable for repayment of a Universal Credit (UC) Advance Loan, and that he is dissatisfied with the customer service provided to him by DWP. We appreciate this matter has been very stressful for Mr V, and that he finds the debt he owes overwhelming.

2. Having reviewed all the evidence available to us, we have found no indication that anything went wrong with DWP’s decision to reclaim the UC Advance Loan from Mr V. This is because Mr V received the UC Advance Loan, and the legislation and guidance we have seen states this must be paid back. We have also looked at Mr V’s concerns about the customer service DWP provided him and consider it has already done enough to put right the impact of these events for him.