In order to appeal- you need to have the actual decision. So first of all, request for a decision about the January o/payment to be issued to you in writing.
Secondly, it seems to me that the your local authority made a mistake by not amending your claim despite the fact that you have informed them about your change of circumstances.
If such mistake is made by the agency/organisation that is responsible for paying your benefit, it is caled an "official error". The overpayment caused by an official error can still be recovered IF it was reasonable for the authority to expect that you knew that you were being overpaid.
Now, this is very important, as if you can show that it would be unreasonable for them to expect that you'd understand that you are being paid more then your entitlement, then the overpayment cannot be recovered.
How can you show that? Well, in quite a few ways, for example if the change of circumstances was small, not very significant; or if you reported few changes of circs and your benefits were going up and down all the time, or that you were unwell etc.
Have a look at this link:
Coventry Law Centre : Welfare benefits advice : Information leaflets : Income support for pensioners (don't worry about the title of the link, lol)
and call
Community Legal Advice to get help with the appeal.