Huge cost of benefit mistakes in Preston

Charity Turn2Us, which helps people in financial hardship, warned that recovering funds paid in error could have a "snowball effect", putting people at risk of serious poverty and impacting their mental health.

The Department for Work and Pensions data shows the amount of money recovered by Preston City Council which was accidentally paid to people who are not entitled to benefits or who got paid more benefit than they should. Cases of fraud are excluded.

The latest figures show that, in the nine months to September, housing benefit claimants had to pay back £1.02m to Preston from overpayments.

Matthew Geer, campaigns manager at Turn2Us said: "A benefit overpayment can happen for many reasons. It’s often something as simple as a DWP error or a small unreported change in circumstances.

"However, we are seeing that overpayments can have a real snowball effect on some claimants which often results in people falling into more severe debt and being harassed by bailiffs.

"The impact this can have one someone’s well-being is often overlooked and we speak to people every week struggling with their mental health as a result."

Housing charity Shelter says the rates at which "housing benefit overpayments are clawed back can be be incredibly high", which can push people into debt and homelessness.

In Preston, the bulk of the money reclaimed, £1m, was to housing associations or private tenants. A further £6,000 was repaid from rent reductions for council tenants.

Additonally, Preston City Council wrote off £165,000 of housing benefit overpayments.

In September 2018, the council still had £3m of housing benefit overpayments outstanding.

Mr Geer added: "We encourage local authorities to take a holistic and sensitive approach to recovering accidental overpayments. It is vital that a benefit overpayment doesn’t become a trigger for falling into serious poverty."

Across Great Britain, overpayments during the period totalled £588m, a 15 per cent drop compared with two years earlier.

During that nine month period, local authorities recovered £506m of housing benefit overpayments, while £74m was written off.

A total of £2.1bn remained outstanding across the country in September.