Six unexpected DWP payments worth up to £20,000 that could land in your bank account before Christmas
THERE’S nothing better than getting an unexpected windfall, and there are plenty of reasons you might get see a boost in your DWP benefits payments in the next few months.
For instance, you could be owed arrears, have got the Christmas bonus, or even be getting money because the benefits office is correcting a historical underpayments error.
But before you spend the cash, it’s worth checking exactly where the money has come from and why, in case you shouldn’t be receiving it.
If it’s an accidental overpayment and you’re not entitled to the full amount you get, you will likely have to pay it back, even if it’s due to a DWP mistake.
That means it’s better to know up front, rather than being landed with an unexpected bill you can’t afford later down the track.
Also – it might be for a legitimate reason, which means you’ve got extra cash in your pocket to get through the winter months and Christmas.
In which case, it’s best to find out straight away so you know you can safely spend it.
Here are some of the main reasons you might see your benefits payments increase unexpectedly.
You were underpaid benefits
If your benefits have been underpaid, you might receive a back payment from the DWP, which is normally paid as a lump sum.
This is more common than you might expect.
For instance, around 70,000 people have received less money than they should from Employment and Support Allowance after switching from older benefits like Incapacity Benefit.
About 20,000 of these people were supposed to receive an extra payment called the ‘severe disability premium’ but didn’t.
Some might be owed as much as £20,000.
The DWP is now sending back payments to those affected, so anyone in this position could see large sums dropping into their bank accounts.
People switching to Universal Credit might also receive lump sums due to arrears from legacy benefits.
The good news for both these groups is that the DWP has put measures in place to make sure that the cash doesn’t impact means-tested benefits awards such as Universal Credit.
For lumps under £5,000, the money won’t be counted towards the savings limits for 52 weeks.
If you received more than that, the amount is disregarded until your
benefit stops.
If you’ve received a back payment for any other underpaid benefits, you should check the rules around whether it’s counted towards your savings limits for other benefits.
Your circumstances changed and you now get more
When your circumstances change, your benefits payments often change too. This could mean more or less money depending on what’s happened.
For instance, if you have another child, you should see child benefit payments increase.
Equally, if you move in with a partner, some benefits are worked out on couples rates, which tend to be higher than an individual claim, but lower than what you’d get if two people claimed individually whilst living separately.
You’re usually expected to alert the DWP to any changes in circumstances that might impact your benefits, and you can be fined or prosecuted for knowingly giving the wrong information when you claim.
How do I apply for Universal Credit?
HERE'S all you need to know about applying for Universal Credit.
You’ll need to apply to the new welfare system via the Gov.UK website, starting by setting up an online account.
To make an account, you’ll need an email address and a phone number.
After that, you’ll need to answer a set of questions about your current circumstances, known as your “to do list”.
These include things like when you last received payment for a job, what your household income is and how many people depend on you financially.
If you’ve lost your job, Citizens Advice recommends that you don’t apply until you’ve received your final wages or any final holiday pay.
This is because any money you receive after you’ve applied for Universal Credit will count as income and mean that you’re entitled to less in your first payment.
You will then need to confirm your identity online.
In certain circumstances, you’ll be able to apply over the phone, such as those who don’t have regular access to the internet, are visually impaired, or have a physical condition that stops you from using a computer or smartphone.
To do this, you will need to contact the Universal Credit helpline to ask if you can apply by phone or arrange a home visit.
In this case, someone can call them on your behalf if you can’t do it yourself.
You’ve been paid early due to a bank holiday
If your usual payment day falls on a bank holiday, then you’ll typically be paid early.
Normally, the money will come in on the last working day before it was expected.
The next bank holiday in the UK is Christmas day, and you could get your cash sooner if your normal benefit payment day is a Wednesday.
While it’s nice to get the money early, you’ll need to be cautious as it will have to stretch a day or two more before your next payment.
You get the DWP Xmas bonus
The DWP’s Christmas Bonus is a one-off, tax-free £10 payment made before December 25.
It’s paid to people who get certain benefits in the qualifying week, which is usually the first full week of December.
The money should go into your usual account, and might show up as ‘DWP XB’ on your statement.
However, the government has not confirmed exactly when people can expect to see the cash appear.
LEAP State Pension error
The Legal Entitlements and Administrative Practice (LEAP) exercise is a Department for Work and Pensions (DWP) investigation into state pension underpayments.
The DWP became aware in 2020 that some individuals’ state pensions had not been increased automatically when they should have.
HMRC started writing to potential victims last Autumn, but a report in July revealed that by the end of March 2024 DWP had assessed just 419 cases out of an expected 194,000.
As more cases are assessed, more people can expect to see arrears payments appearing in their accounts.
You can read more about the underpayments errors and
what to do if you think you might be affected here.
The LEAP PIP error
Another government error relates to how Personal Independence Payments (PIP) are calculated.
From 28 November 2016, there was a change relating to how overwhelming psychological distress affects people’s ability to plan and follow a journey.
However, this wasn’t factored in for lots of claims, so the DWP is checking to see if people are entitled to more support.
It is also re-examining all claims that were rejected since the date the changes came into force, to see if those people should have been awarded money under the new rules.
Anyone who has been underpaid or had their claim wrongly rejected will have the money backdated to the date the change came in, or the date they applied, whichever is later.
You’ve finished paying off a debt/deductions and payments have returned to normal.
If you owe money (for example court fines, rent, Council Tax, energy payments, or Universal Credit advance loans), the repayments might be taken directly out of your benefits.
But once the debt is repaid, you’ll usually go back to getting your full award. That means you could suddenly have extra cash each week or month, depending on how often you’re usually paid.