A court case just forced the DWP to change Universal Credit rules

A court case has forced the Department for Work and Pensions (DWP) to changes its rules. It surrounds the department issuing sanctions and taking money off people. But in reality – it was the DWP not following its own rules in the first place.

Hardship payments

The DWP offers hardship payments to some claimants. As the website Turn2Us noted:

Hardship payments are reduced-rate payments of jobseeker’s allowance (JSA), employment and support allowance (ESA) and universal credit (UC) that are made in limited circumstances, including if you have been sanctioned.

In short, hardship payments are what the DWP gives you if it sanctions but you’re too poor to live without money. For Universal Credit claimants, the DWP calculates a daily rate for hardship payments. In the case of sanctions, Turn2Us noted this as 60% of the sanction amount and that:

Important: Hardship payments… are recoverable so you must pay them back.

But now, a court case led to the DWP admitting this is not necessarily always the case.

The DWP: rogue sanctions

The Public Law Project (PLP) took on the case of a Universal Credit claimant who the DWP had sanctioned six times. As it noted, its client was:

a vulnerable care-leaver with physical and mental health problems and experience of domestic abuse.

The PLP said the DWP “unfairly sanctioned” her. It left her to live “on reduced benefits for over a year and a half”. Some of the DWP’s actions included sanctioning her for:

• Not attending an appointment when she was at a funeral.
• Missing appointments because she couldn’t afford the bus fare. This was due to Universal Credit’s built-in five week wait for a first payment.

So, the PLP supported the claimant with an appeal in 2020. She won this and the DWP had to pay her back the money. But then, there was another issue.

Waiving debt

During the time the DWP sanctioned her, the claimant applied for and received hardship payments. As the PLP said:

she was left in debt which included [hardship payments] that were taken on to cover her basic needs during the period of sanctioning.

So, the PLP started judicial review proceedings over this. At first, the DWP refused to waive its client’s debt. But after the PLP threatened to take the judicial review further, the DWP caved in. It wrote off the hardship payment debt.

Because of the case, the DWP changed its guidance. And this is the crucial part for countless claimants.

An important move for claimants

The DWP has admitted that its recovery of hardship payments due to sanctions was always discretionary. That is, claimants can ask it to waive the debt caused by them. This is even if a claimant has signed a declaration saying they will pay the DWP back the hardship payments. As the PLP noted:

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.

But the DWP’s own guidance did not previously say this. So, it was giving out the wrong information to both claimants and staff.

Thanks to both the PLP and the claimant in its case – everyone claiming Universal Credit should now be aware that the DWP’s recovery of hardship payments is discretionary. And if the DWP still refuses to waive them? Then the PLP said it may be able to help. You can email them via enquiries(at)publiclawproject.org.uk

Featured image via Dan Perry – Flickr and Wikimedia