Can I include benefit overpayments in a trust deed?

It is possible to include benefit overpayments within a Trust Deed in Scotland. Benefit overpayments would be treated as a debt just like any other qualifying debt and can be included within the Trust Deed proposals.

While entering into a Trust Deed purely for benefit overpayments is unlikely to be the best way of dealing with the debt, if you have other problem debts which you are struggling to manage in addition, a Trust Deed could allow you to bring them all together under one affordable repayment plan.

Understanding how benefit overpayments in a Trust Deed work

A Trust Deed is a formal repayment plan which typically lasts for four years. You can add a number of different debts into a Trust Deed – such as credit cards, overdrafts, and benefit overpayments – and make just one monthly repayment towards them all during the four years.

Your Trustee - the professional who manages your Trust Deed - will then divide this payment amongst your creditors to help repay the money you owe them. As benefits are administered by the DWP government office, they will receive an amount of money each month from your Trust Deed repayment.

After the four years, so long as you have made each monthly payment on time and in full, the debt which remains outstanding will be written off. This means that any money still owed to the DWP in respect of your benefit overpayment will be cleared following the completion of the Trust Deed and you will have no more to pay towards it.