diff --git a/lnwire/onion_error.go b/lnwire/onion_error.go
index bf75b63f..961373b9 100644
--- a/lnwire/onion_error.go
+++ b/lnwire/onion_error.go
@@ -11,6 +11,7 @@ import (
 
 	"github.com/davecgh/go-spew/spew"
 	"github.com/go-errors/errors"
+	"github.com/lightningnetwork/lnd/tlv"
 )
 
 // FailureMessage represents the onion failure object identified by its unique
@@ -78,6 +79,7 @@ const (
 	CodeFinalIncorrectCltvExpiry         FailCode = 18
 	CodeFinalIncorrectHtlcAmount         FailCode = 19
 	CodeExpiryTooFar                     FailCode = 21
+	CodeInvalidOnionPayload                       = FlagPerm | 22
 )
 
 // String returns the string representation of the failure code.
@@ -149,6 +151,9 @@ func (c FailCode) String() string {
 	case CodeExpiryTooFar:
 		return "ExpiryTooFar"
 
+	case CodeInvalidOnionPayload:
+		return "InvalidOnionPayload"
+
 	default:
 		return "<unknown>"
 	}
@@ -1117,6 +1122,66 @@ func (f *FailExpiryTooFar) Error() string {
 	return f.Code().String()
 }
 
+// InvalidOnionPayload is returned if the hop could not process the TLV payload
+// enclosed in the onion.
+type InvalidOnionPayload struct {
+	// Type is the TLV type that caused the specific failure.
+	Type uint64
+
+	// Offset is the byte offset within the payload where the failure
+	// occurred.
+	Offset uint16
+}
+
+// NewInvalidOnionPayload initializes a new InvalidOnionPayload failure.
+func NewInvalidOnionPayload(typ uint64, offset uint16) *InvalidOnionPayload {
+	return &InvalidOnionPayload{
+		Type:   typ,
+		Offset: offset,
+	}
+}
+
+// Code returns the failure unique code.
+//
+// NOTE: Part of the FailureMessage interface.
+func (f *InvalidOnionPayload) Code() FailCode {
+	return CodeInvalidOnionPayload
+}
+
+// Returns a human readable string describing the target FailureMessage.
+//
+// NOTE: Implements the error interface.
+func (f *InvalidOnionPayload) Error() string {
+	return fmt.Sprintf("%v(type=%v, offset=%d)",
+		f.Code(), f.Type, f.Offset)
+}
+
+// Decode decodes the failure from bytes stream.
+//
+// NOTE: Part of the Serializable interface.
+func (f *InvalidOnionPayload) Decode(r io.Reader, pver uint32) error {
+	var buf [8]byte
+	typ, err := tlv.ReadVarInt(r, &buf)
+	if err != nil {
+		return err
+	}
+	f.Type = typ
+
+	return ReadElements(r, &f.Offset)
+}
+
+// Encode writes the failure in bytes stream.
+//
+// NOTE: Part of the Serializable interface.
+func (f *InvalidOnionPayload) Encode(w io.Writer, pver uint32) error {
+	var buf [8]byte
+	if err := tlv.WriteVarInt(w, f.Type, &buf); err != nil {
+		return err
+	}
+
+	return WriteElements(w, f.Offset)
+}
+
 // DecodeFailure decodes, validates, and parses the lnwire onion failure, for
 // the provided protocol version.
 func DecodeFailure(r io.Reader, pver uint32) (FailureMessage, error) {
@@ -1298,6 +1363,9 @@ func makeEmptyOnionError(code FailCode) (FailureMessage, error) {
 	case CodeExpiryTooFar:
 		return &FailExpiryTooFar{}, nil
 
+	case CodeInvalidOnionPayload:
+		return &InvalidOnionPayload{}, nil
+
 	default:
 		return nil, errors.Errorf("unknown error code: %v", code)
 	}
diff --git a/lnwire/onion_error_test.go b/lnwire/onion_error_test.go
index 8420be1f..5dafcedd 100644
--- a/lnwire/onion_error_test.go
+++ b/lnwire/onion_error_test.go
@@ -16,6 +16,8 @@ var (
 	testAmount        = MilliSatoshi(1)
 	testCtlvExpiry    = uint32(2)
 	testFlags         = uint16(2)
+	testType          = uint64(3)
+	testOffset        = uint16(24)
 	sig, _            = NewSigFromSignature(testSig)
 	testChannelUpdate = ChannelUpdate{
 		Signature:      sig,
@@ -50,6 +52,7 @@ var onionFailures = []FailureMessage{
 	NewChannelDisabled(testFlags, testChannelUpdate),
 	NewFinalIncorrectCltvExpiry(testCtlvExpiry),
 	NewFinalIncorrectHtlcAmount(testAmount),
+	NewInvalidOnionPayload(testType, testOffset),
 }
 
 // TestEncodeDecodeCode tests the ability of onion errors to be properly encoded