Help for benefit claimants as DWP changes tune on hardship payment clawback

Benefit claimants facing poverty because the DWP is threatening to claw back hardship payments they claimed – after being sanctioned – have a ray of hope after a recent court case.

The Department for Work and Pensions has now admitted that any action to take back these payments is discretional and it may waive its right to do so.

The DWP has written an open letter to explaining how Universal Credit (UC) claimants can apply for recoverable hardship payments after a sanction, and the process by which claimants can request that hardship payments are waived.

The change follows a successful judicial review by a client of the Public Law Project (PLP).

The organisation explains the main points of the new process, with important points from DWP’s letter in bold, and PLP’s additions in italics:

  1. When a sanction is imposed the DWP should inform the individual of the details of the sanction(s) in a letter uploaded to the UC journal, along with the option to claim hardship payments. If the individual thinks the sanction is wrong, they can request a mandatory reconsideration from the DWP. If that is unsuccessful, the claimant can appeal the DWP’s sanction decision to the tribunal. There is guidance on challenging a sanction from Citizens Advice and Mental Health & Money Advice
  2. A claimant that receives a sanction can apply for hardship payments by calling the UC helpline. On the call, the DWP official will ask about the individuals’ living costs, so the individual should make a note of these in advance. The individual will need to explain why the sanction has made it hard for them to meet their basic needs (such as food or utilities costs) and what they have done to find other sources of financial support. Citizens Advice have published useful guidance on getting a hardship payment.
  3. Hardship payments are recoverable (meaning the DWP can ask for them to be repaid), and when a claimant applies for a hardship payment the DWP official will ask them to agree a ‘declaration’ that they will repay it once their sanctions are lifted. If  a claimant’s application for hardship payments is refused, this decision can be challenged by making a mandatory reconsideration request to the DWP. 
  4. Once the claimant’s sanction has ended the DWP will take steps to recover the hardship payment by making deductions from the individual’s UC. However, importantly, DWP does have a choice not to recover hardship payments. This choice applies in all cases, including where the individual’s sanction has been subsequently overturned, for example following mandatory reconsideration or a tribunal appeal.
  5. If the claimant cannot afford to repay the hardship payment they can ask DWP for the deductions to be reduced and / or request that the hardship payment be waived in full. This is not affected by the fact that the claimant has agreed a declaration that they will repay the hardship payment.

Getting hardship payment debt waived

PLP has produced a note on how to request a waiver of hardship payment debt and what to do if the DWP refuses.

Source: DWP publishes letter on Universal Credit hardship payments – Public Law Project

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