Newham Council is said to have reclaimed more than £5million in overpaid housing benefit from claimants, which charities say could push them dangerously into debt.

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 the local authority 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 £5.29m to Newham Council 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 Newham, the bulk of the money reclaimed, £3.7m, was to housing associations or private tenants.

A further £1.6m was repaid from rent reductions for council tenants.

Additonally, Newham Council wrote off £108,000 of housing benefit overpayments.

In September 2018, the council still had £34m 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 15per 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 £2.1billion remained outstanding across the country in September.

A council spokeswoman said: “The vast majority of overpayments are made as a result of residents failing to notify a change in their circumstances for example, a partner moving in or a change in employment status. It is absolutely vital that residents keep the council up to date with any change to avoid overpayments, this can be done online on the council website.

“Where claimants have been overpaid the council has a statutory duty to reclaim the funds. These debts are debts to the council and so non-collection impacts the council’s financial position and it’s ability to deliver the services which are important to residents.

“The council will always consider the vulnerability of residents when pursuing debt and has a comprehensive and ethical protocol in place for dealing with such cases.

“Where residents have been overpaid we would always encourage them to contact the council, as we can offer a variety of ways to repay the money, including by manageable instalments.”