One in five people on Income Support are returning overpayments, according to a scrutiny panel review.
A review into benefits was launched in June to investigate the extent and causes of overpayments, and the effect they have on households.
The main reasons for claimants being paid too much are them not disclosing a change in circumstances, and errors by Customer and Local Services.
The panel found that a fifth of people on Income Support are repaying money that they were not entitled to.
It says if CLS makes a mistake it should apologise not try to get that money back.
In cases where it must be returned, claimants should be supported and guidelines reviewed to make sure repayment plans are not pushing households into financial hardship.
Those are among the panel's 26 recommendations.
Deputy Rob Ward, Chair of the Panel, says recouping overpaid sums can cause a huge financial strain.
"The extent of this impact on people's lives and health cannot be underestimated, and as such I hope that all of the panel’s findings and recommendations are seen as constructive comments on how to improve a system that so many rely upon for support."
Claimants also reported a lack of empathy among Income Support staff.
The panel has suggested the Social Security Minister introduces mandatory training on learning difficulties, trauma-informed practice and unconscious bias.
Deputy Elaine Millar says she will consider the findings:
"Income Support payments are made in advance, so low-income families are supported quickly when their circumstances require it. Making payments in advance will often lead to temporary overpayments. I will review these findings and recommendations carefully and publish my formal response in the coming weeks.”
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